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Emerson Reports Second Quarter 2019 Results

Net sales of $4.6 billion increased 8%, or 4% on an underlying basis with operating cash flow up 7% to $533 million.

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By: DAVID SAVASTANO

Contributing Editor, Coatings World and Ink World, Coatings World and Ink World Magazine

Emerson reported results for the second quarter ended March 31, 2019.
 
Net sales of $4.6 billion increased 8%, or 4% on an underlying basis excluding unfavorable currency of 2% and a positive impact from acquisitions of 6%. Underlying growth reflected broad-based global demand in process and hybrid end markets and continued strength in North American air conditioning and global professional tools markets.
 
Emerson expects growth to improve modestly through the second half of the year with underlying orders returning to the 5% to 10% range, supported by a strong macroeconomic backdrop for energy investment and continued improvement in the Commercial & Residential Solutions Asia, Middle East & Africa business.
 
Second quarter gross profit margin of 42.1% was down 70 basis points, reflecting unfavorable mix, modest dilution from recent acquisitions and $7 million of first year acquisition accounting charges related to the GE Intelligent Platforms business.
 
Second quarter operating cash flow was up 7% to $533 million, and free cash flow was up 3% to $414 million.
 
“Demand in the second quarter was healthy across the world areas. Automation Solutions continued to drive healthy mix across its three kinds of business – maintenance and repair spending, brownfield projects and greenfield investments,” said David N. Farr, chairman and CEO. “Trends in our Commercial & Residential Solutions end markets improved overall, and we are optimistic about returning to solid growth in the second half. We remain confident in the cycle and the mid-term and long-term growth outlook we discussed at our February investor conference.”
 

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