Name: Emerson Electric Co. (NYSE:EMR) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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Emerson Electric Co., consolidated income statement

US$ in millions

12 months ended:	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016	Sep 30, 2015	Sep 30, 2014
Net sales	18,372)	17,408)	15,264)	14,522)	22,304)	24,537)
Cost of sales	(10,557)	(9,948)	(8,860)	(8,260)	(13,256)	(14,379)
Gross profit	7,815)	7,460)	6,404)	6,262)	9,048)	10,158)
Selling, general and administrative expenses	(4,457)	(4,258)	(3,618)	(3,464)	(5,184)	(5,715)
Gains on divestitures of businesses	—)	—)	—)	—)	1,039)	—)
Goodwill impairment	—)	—)	—)	—)	—)	(508)
Amortization of intangibles (intellectual property and customer relationships)	(238)	(211)	(136)	(84)	(214)	(225)
Restructuring costs	(95)	(65)	(78)	(96)	(211)	(55)
Other	8)	(100)	(72)	(114)	(146)	(113)
Other deductions, net	(325)	(376)	(286)	(294)	(571)	(393)
Earnings from continuing operations before interest and income taxes	3,033)	2,826)	2,500)	2,504)	4,332)	3,542)
Interest income	27)	43)	36)	27)	29)	24)
Interest expense	(201)	(202)	(201)	(215)	(200)	(218)
Interest expense, net of interest income	(174)	(159)	(165)	(188)	(171)	(194)
Earnings from continuing operations before income taxes	2,859)	2,667)	2,335)	2,316)	4,161)	3,348)
Income taxes	(531)	(443)	(660)	(697)	(1,428)	(1,164)
Earnings from continuing operations	2,328)	2,224)	1,675)	1,619)	2,733)	2,184)
Discontinued operations, net of tax	—)	—)	(125)	45)	—)	—)
Net earnings	2,328)	2,224)	1,550)	1,664)	2,733)	2,184)
Noncontrolling interests in earnings of subsidiaries	(22)	(21)	(32)	(29)	(23)	(37)
Net earnings common stockholders	2,306)	2,203)	1,518)	1,635)	2,710)	2,147)

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).

The financial performance between 2014 and 2019 is characterized by a significant contraction in scale followed by a period of steady recovery. A sharp decline in net sales occurred between 2014 and 2016, with revenues falling from 24,537 million US$ to 14,522 million US$. This reduction suggests a major structural change or divestiture of business segments. Following this trough in 2016, net sales exhibited a consistent upward trend, reaching 18,372 million US$ by September 30, 2019.

Profitability and Margin Analysis: Gross profit margins remained remarkably resilient despite the volatility in total sales. The gross margin shifted from 41.4% in 2014 to 42.4% in 2019, with a peak of 43.3% observed in 2016. This stability indicates a strong ability to maintain pricing power and manage the direct cost of sales relative to revenue, even as the company's overall size decreased.
Operating Expense Management: Selling, general and administrative (SG&A) expenses were adjusted in correlation with the revenue decline. Expenses dropped from 5,715 million US$ in 2014 to a low of 3,464 million US$ in 2016. As revenue grew from 2017 onward, SG&A expenses rose proportionally, ending at 4,457 million US$ in 2019. Restructuring costs remained present throughout the period, though they peaked in 2015 at 211 million US$, reflecting the costs associated with organizational transitions.
Earnings and Net Income Trends: Earnings from continuing operations before interest and taxes peaked in 2015 at 4,332 million US$, largely bolstered by 1,039 million US$ in gains from divestitures. After a decline in 2016 and 2017, these earnings grew steadily to 3,033 million US$ by 2019. Net earnings common to stockholders followed a similar trajectory, recovering from a low of 1,518 million US$ in 2017 to 2,306 million US$ in 2019, effectively returning to 2014 levels.
Non-Operating Items and Fiscal Stability: Interest expenses remained highly stable throughout the six-year period, fluctuating narrowly between 165 million US$ and 218 million US$ (net of interest income). This stability suggests a consistent debt service requirement. The impact of non-recurring items was notable, specifically the 508 million US$ goodwill impairment in 2014 and the significant divestiture gains in 2015, which created temporary variances in the net earnings trend.

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