Yahoo Finance Emerson Electric (EMR) to Post Q2 Earnings: Is a Beat in Store?
Emerson Electric Co. EMR is likely to witness top and bottom-line growth when it reports second-quarter fiscal 2024 (ended Mar 31, 2024) results on May 8, before market open. The Zacks Consensus Estimate for revenues is pegged at $4.3 billion, indicating growth of 14.2% from the prior-year quarter’s reported figure.
The consensus mark for earnings is pinned at $1.26 per share, which has increased by a penny in the past 60 days. The figure indicates a jump of 15.6% from the prior-year reported figure. The company’s bottom line surpassed the Zacks Consensus Estimate by 17.3% in the last reported quarter. In the trailing four quarters, EMR missed estimates once but managed to beat on the other occasions, pulling off an average earnings surprise of 11.8%.
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In the past three months, EMR’s shares have risen 2.4% compared with the industry’s growth of 6.3%.
Let’s see how things might have shaped up for Emerson prior to the announcement.
Factors to Influence Q2 Results
Strength across Emerson’s measurement and analytical, and final control businesses, driven by solid demand in the hybrid and process end markets, is likely to have supplemented the top-line performance of its Intelligent Devices segment in the fiscal second quarter. Demand seen across the energy and power end markets, and the company’s ability for strong backlog conversion are likely to be reflected in the segment’s results.
Underlying sales growth in the Americas and Europe regions is expected to have boosted the performance of the safety & productivity business within the Intelligent Devices unit. However, softness in the discrete automation business owing to sluggish demand in Asia, Middle East & Africa markets might be a drag on the unit’s performance. We expect the Intelligent Devices segment’s revenues to increase 1.4% to $2.96 billion from the year-ago fiscal quarter.
Persistent strength in the control systems and software business, along with the AspenTech buyout, is likely to have augmented the performance of the Software and Control segment. Robust demand in process end markets and strong demand in power end markets are expected to have acted as a tailwind for the segment.
EMR’s acquisition of National Instruments (October 2023), which has expanded its presence in high-growth end markets, including semiconductor and electronics, transportation and electric vehicles, is likely to have augmented its top line. For the fiscal second quarter, we expect the Software and Control segment’s revenues to increase 53.4% from the year-ago reported number to $1.31 billion.
Given the strength across its end markets, Emerson has provided a bullish forecast for the quarter under review. The company expects net sales to increase 12.5-14.5% year over year in the second quarter of fiscal 2024. Underlying sales are expected to increase 3.5-5.5%.
However, escalating operating costs and expenses are likely to have affected EMR’s margin performance in the fiscal second quarter. Also, given the company’s substantial international operations, foreign currency headwinds may have marred EMR’s margins and profitability.
Emerson Electric Co. Price and EPS Surprise
Emerson Electric Co. price-eps-surprise | Emerson Electric Co. Quote
Earnings Whispers
Our proven model suggests that EMR is likely to beat earnings estimates this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: Emerson has an Earnings ESP of +1.99% as the Most Accurate Estimate is pegged at $1.28, which is higher than the Zacks Consensus Estimate of $1.26. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: EMR carries a Zacks Rank of 2 at present.
Other Stocks With a Favorable Combination
Here are three other companies that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this reporting cycle.
Axon Enterprise AXON has an Earnings ESP of +5.97% and a Zacks Rank #2. It is slated to release first-quarter 2024 results on May 6. AXON delivered a trailing four-quarter earnings surprise of 58.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
DNOW Inc. DNOW has an Earnings ESP of +2.13% and carries a Zacks Rank #3. It is slated to release first-quarter results on May 10. DNOW delivered a trailing four-quarter earnings surprise of 15.6%, on average.
Apogee Enterprises, Inc. APOG has an Earnings ESP of +4.04% and a Zacks Rank #3. It is slated to release first-quarter fiscal 2024 results on Jun 28. APOG delivered a trailing four-quarter earnings surprise of 19.4%, on average.
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Emerson Electric Co. (EMR) : Free Stock Analysis Report
Apogee Enterprises, Inc. (APOG) : Free Stock Analysis Report
DNOW Inc. (DNOW) : Free Stock Analysis Report
Axon Enterprise, Inc (AXON) : Free Stock Analysis Report
