Stock Analysis on Net
Stock Analysis on Net

Emerson Electric Co. (NYSE:EMR)

This company has been moved to the archive! The financial data has not been updated since April 24, 2020.

Common-Size Income Statement 

Emerson Electric Co., common-size consolidated income statement

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12 months ended: Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
Net sales 100.00 100.00 100.00 100.00 100.00 100.00
Cost of sales -57.46 -57.15 -58.05 -56.88 -59.43 -58.60
Gross profit 42.54% 42.85% 41.95% 43.12% 40.57% 41.40%
Selling, general and administrative expenses -24.26 -24.46 -23.70 -23.85 -23.24 -23.29
Gains on divestitures of businesses 0.00 0.00 0.00 0.00 4.66 0.00
Goodwill impairment 0.00 0.00 0.00 0.00 0.00 -2.07
Amortization of intangibles (intellectual property and customer relationships) -1.30 -1.21 -0.89 -0.58 -0.96 -0.92
Restructuring costs -0.52 -0.37 -0.51 -0.66 -0.95 -0.22
Other 0.04 -0.57 -0.47 -0.79 -0.65 -0.46
Other deductions, net -1.77% -2.16% -1.87% -2.02% -2.56% -1.60%
Earnings from continuing operations before interest and income taxes 16.51% 16.23% 16.38% 17.24% 19.42% 14.44%
Interest income 0.15 0.25 0.24 0.19 0.13 0.10
Interest expense -1.09 -1.16 -1.32 -1.48 -0.90 -0.89
Interest expense, net of interest income -0.95% -0.91% -1.08% -1.29% -0.77% -0.79%
Earnings from continuing operations before income taxes 15.56% 15.32% 15.30% 15.95% 18.66% 13.64%
Income taxes -2.89 -2.54 -4.32 -4.80 -6.40 -4.74
Earnings from continuing operations 12.67% 12.78% 10.97% 11.15% 12.25% 8.90%
Discontinued operations, net of tax 0.00 0.00 -0.82 0.31 0.00 0.00
Net earnings 12.67% 12.78% 10.15% 11.46% 12.25% 8.90%
Noncontrolling interests in earnings of subsidiaries -0.12 -0.12 -0.21 -0.20 -0.10 -0.15
Net earnings common stockholders 12.55% 12.66% 9.94% 11.26% 12.15% 8.75%

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

Gross profit and cost of sales trends
Gross profit as a percentage of net sales remained relatively stable, fluctuating between 40.57% and 43.12% from 2014 to 2019. Correspondingly, the cost of sales hovered between approximately 56.88% and 59.43% of net sales. The slight improvements in gross profit margin, particularly in 2016, suggest moderate efficiency gains in production or sourcing.
Selling, general and administrative expenses
These expenses consistently represented roughly 23% to 24.5% of net sales over the period, with a gentle upward trend peaking at 24.46% in 2018 before a minor decline to 24.26% in 2019. This indicates a relatively steady but slightly increasing overhead burden relative to sales.
One-time and non-recurring items
Goodwill impairment was notable only in 2014 at -2.07%, with no subsequent charges. Gains on divestitures were significant in 2015 at 4.66%, enhancing profitability that year. Other items such as amortization of intangibles decreased initially then marginally increased towards 2019, while restructuring costs exhibited no clear trend but remained below 1% of net sales.
Operating earnings and income before taxes
Earnings from continuing operations before interest and income taxes stayed within a range of 14.44% to 19.42% of net sales, peaking in 2015. Income before taxes showed a parallel pattern, peaking at 18.66% in 2015 and stabilizing around 15% thereafter, indicating consistent operating profitability post-2015.
Interest income and expense
Interest income was low but slightly improved from 0.10% to a peak of 0.25% before declining to 0.15%. Interest expense rose sharply in 2016 to -1.48% but declined gradually afterward, leading to net interest expense reductions post-2016, reflecting possible debt restructuring or improved financial management.
Income taxes
The tax burden showed a declining trend from -6.4% in 2015 to a low of about -2.54% in 2018, before a slight increase in 2019. This may suggest tax planning efforts or changes in tax regulations that positively impacted net earnings.
Net earnings and earnings attributable to common stockholders
Net earnings and earnings attributable to common stockholders generally improved from 2014 to 2015, with net earnings rising from 8.9% to 12.25% of net sales. After a slight dip in 2017, earnings rebounded to approximately 12.6% by 2018 and remained stable in 2019, indicating sustained profitability. Discontinued operations had minimal effect on net earnings beyond the transient positive and negative impacts in 2016 and 2017, respectively.
Other deductions and miscellaneous items
Other deductions and net items varied without a clear trend, ranging between -0.47% and -2.56%, with the exception of 2019 where other items showed a slight positive figure. This variability suggests occasional non-operating impacts on profitability.