Emerson Electric (EMR) Reports Trailing Three-Month 2.5% Drop in Orders Growth for August 2016

September 22, 2016 6:55 AM EDT
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Emerson Electric (NYSE: EMR) disclosed the following in a U.S. SEC filing on Thursday:

Emerson 3-Month Orders Growth
(Percentage change versus prior year; trailing 3-month averages, excluding acquisitions and divestitures, including currency translation)
June '16
July '16
August '16
Process Management
-20 to -15
-20 to -15
-15 to -10
Industrial Automation
-10 to -5
-15 to -10
-10 to -5
Network Power
0 to 5
5 to 10
10 to 15
Climate Technologies
-5 to 0
5 to 10
Commercial & Residential Solutions
-5 to 0
-5 to 0
Total Emerson
-10 to -5
-10 to -5
-5 to 0
August 2016 Orders Comments

Trailing three-month orders decreased 2.5 percent as monthly orders continue to reflect difficult conditions in energy and general industrial markets, but trend lines finally appear to be stabilizing. Operational and capital spending levels remain muted as global oil and gas customers continue to seek market stability. Underlying orders were down 4 percent and were in line with the previous two months. Currency translation added approximately 2 percent. A continuation of favorable market conditions for data center and telecommunications infrastructure spending contributed to growth in the Network Power segment. Improving demand in global HVAC and refrigeration markets drove mid-single digit growth in the Climate Technologies segment, while the Process Management and Industrial Automation segments declined as a result of a continuation of difficult market conditions and weak capital spending.

Process Management orders continue to reflect the impact of low oil prices as global oil and gas markets remain in a state of over-supply. Underlying orders were down in all regions, with significant declines in Middle East/Africa, Latin America and North America. Upstream markets continue to be under significant pressure, while midstream markets have been mixed reflecting slightly better opportunities in the oil and gas sector. Downstream activity, particularly in chemical and power markets remains favorable, while hybrid markets such as life sciences and food and beverage continue to provide opportunities. Reduced levels of both operational and capital spending in energy related markets are expected to continue into calendar 2017. Currency translation added 4 percentage points.

Industrial Automation orders were down, reflecting continued weakness in industrial spending and upstream oil and gas markets. Underlying orders were down as strong growth in the materials joining business was more than offset by decreases in all other businesses. The impact from currency translation was negligible.

Network Power orders increased as demand for data center and telecommunications investment remains favorable. Data center growth was solid across most regions driven by co-location, cloud and hyperscale customers. Telecommunications infrastructure spending reflected favorable conditions in North America. Overall, all regions reported underlying orders growth except Asia and Latin America. Currency translation added 1 percentage point.

Climate Technologies orders increased mid-single digits as a result of improved demand conditions in HVAC and refrigeration markets. The air conditioning business was up high-single digits led by strong growth in Asia, including China, and North America. The refrigeration business experienced modest levels of growth. Currency translation deducted 1 percent.

Commercial & Residential Solutions orders decreased slightly as demand within the segment was mixed. Underlying growth in food waste disposers was more than offset by declines in the professional tools, wet/dry vacuums and storage businesses. The impact from currency translation was negligible.

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