Net Profit Margin
since 2005
Calculation
Emerson Electric Co., net profit margin, long-term trends, calculation
| Net profit margin | = | 100 | × | Net earnings common stockholders1 | ÷ | Net sales1 | |
|---|---|---|---|---|---|---|---|
| Sep 30, 2019 | 12.55% | = | 100 | × | 2,306) | ÷ | 18,372) |
| Sep 30, 2018 | 12.66% | = | 100 | × | 2,203) | ÷ | 17,408) |
| Sep 30, 2017 | 9.94% | = | 100 | × | 1,518) | ÷ | 15,264) |
| Sep 30, 2016 | 11.26% | = | 100 | × | 1,635) | ÷ | 14,522) |
| Sep 30, 2015 | 12.15% | = | 100 | × | 2,710) | ÷ | 22,304) |
| Sep 30, 2014 | 8.75% | = | 100 | × | 2,147) | ÷ | 24,537) |
| Sep 30, 2013 | 8.12% | = | 100 | × | 2,004) | ÷ | 24,669) |
| Sep 30, 2012 | 8.06% | = | 100 | × | 1,968) | ÷ | 24,412) |
| Sep 30, 2011 | 10.24% | = | 100 | × | 2,480) | ÷ | 24,222) |
| Sep 30, 2010 | 10.29% | = | 100 | × | 2,164) | ÷ | 21,039) |
| Sep 30, 2009 | 8.24% | = | 100 | × | 1,724) | ÷ | 20,915) |
| Sep 30, 2008 | 9.72% | = | 100 | × | 2,412) | ÷ | 24,807) |
| Sep 30, 2007 | 9.46% | = | 100 | × | 2,136) | ÷ | 22,572) |
| Sep 30, 2006 | 9.16% | = | 100 | × | 1,845) | ÷ | 20,133) |
| Sep 30, 2005 | 8.22% | = | 100 | × | 1,422) | ÷ | 17,305) |
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), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
1 US$ in millions
The financial performance from 2005 to 2019 is characterized by a significant transition in the relationship between revenue scale and profitability. While the initial decade was marked by steady revenue growth and moderate margin fluctuations, the latter period shows a strategic shift toward higher margin efficiency despite a contraction in total net sales.
- Net Profit Margin Trajectory
- The net profit margin exhibited a general upward trend over the fifteen-year period, rising from 8.22% in 2005 to 12.55% in 2019. This progression occurred in three distinct phases: a period of gradual growth and volatility between 2005 and 2011, a phase of relative stability around the 8% to 9% range from 2012 to 2014, and a sharp elevation to double-digit margins starting in 2015.
- Revenue and Earnings Correlation
- Between 2005 and 2013, net sales grew from 17.3 billion US$ to a peak of 24.7 billion US$, with net earnings generally following this growth. However, a decoupling of these metrics is observed after 2015. Net sales experienced a substantial decline, dropping to a low of 14.5 billion US$ in 2016. Despite this reduction in top-line revenue, the net profit margin increased significantly, reaching a peak of 12.66% in 2018.
- Profitability Efficiency Analysis
- The increase in net profit margin during periods of declining sales suggests a shift in the business mix or an aggressive optimization of the cost structure. The transition from a high-revenue, lower-margin model (approximately 24 billion US$ sales at 8-9% margin) to a lower-revenue, higher-margin model (approximately 18 billion US$ sales at 12% margin) indicates an improvement in the quality of earnings and operational efficiency.
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Comparison to Competitors
Emerson Electric Co., net profit margin, long-term trends, comparison to competitors
| Emerson Electric Co. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Sep 30, 2019 | 12.55% | -0.83% | 12.00% | 10.34% | -5.69% | 16.73% | 10.42% | 7.19% |
| Sep 30, 2018 | 12.66% | 10.34% | 11.86% | 9.93% | -19.69% | 16.18% | 9.39% | 7.92% |
| Sep 30, 2017 | 9.94% | 8.78% | 1.77% | 14.63% | -5.11% | 4.08% | 3.92% | 7.61% |
| Sep 30, 2016 | 11.26% | 5.18% | -0.19% | 9.73% | 8.00% | 12.24% | 11.22% | 8.83% |
| Sep 30, 2015 | 12.15% | 5.39% | 4.76% | 9.49% | -5.79% | 12.36% | 7.81% | 13.56% |
| Sep 30, 2014 | 8.75% | 6.00% | 7.09% | 7.95% | 14.27% | 10.52% | 7.93% | 9.55% |
| Sep 30, 2013 | 8.12% | 5.29% | 7.19% | 8.44% | 12.99% | 10.05% | 6.57% | 9.14% |
| Sep 30, 2012 | 8.06% | 4.77% | 9.01% | 7.46% | 13.62% | 7.77% | 5.82% | 8.89% |
| Sep 30, 2011 | 10.24% | 5.85% | 8.59% | 8.41% | 14.97% | 5.66% | 5.71% | 8.56% |
| Sep 30, 2010 | 10.29% | 5.14% | 6.77% | 6.77% | 11.59% | 6.06% | 6.39% | 8.05% |
| Sep 30, 2009 | 8.24% | 1.92% | 3.03% | 3.23% | 10.62% | 6.97% | 6.69% | 7.30% |
| Sep 30, 2008 | 9.72% | 4.39% | 7.40% | 6.88% | 15.44% | 7.64% | 7.53% | 8.08% |
| Sep 30, 2007 | 9.46% | 6.14% | 8.44% | 7.63% | 22.31% | 7.07% | 7.25% | 7.83% |
| Sep 30, 2006 | 9.16% | 3.60% | 9.10% | 7.68% | 20.68% | 6.64% | 6.38% | 7.92% |
| Sep 30, 2005 | 8.22% | 4.69% | 8.39% | 7.24% | 17.66% | 5.98% | 4.90% | 7.26% |
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), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
Comparison to Sector (Capital Goods)
Emerson Electric Co., net profit margin, long-term trends, comparison to sector (capital goods)
| Emerson Electric Co. | Capital Goods | |
|---|---|---|
| Sep 30, 2019 | 12.55% | 5.03% |
| Sep 30, 2018 | 12.66% | 2.99% |
| Sep 30, 2017 | 9.94% | 3.41% |
| Sep 30, 2016 | 11.26% | 7.61% |
| Sep 30, 2015 | 12.15% | 4.69% |
| Sep 30, 2014 | 8.75% | 9.51% |
| Sep 30, 2013 | 8.12% | 8.78% |
| Sep 30, 2012 | 8.06% | 8.73% |
| Sep 30, 2011 | 10.24% | 9.04% |
| Sep 30, 2010 | 10.29% | 7.93% |
| Sep 30, 2009 | 8.24% | 6.61% |
| Sep 30, 2008 | 9.72% | 9.45% |
| Sep 30, 2007 | 9.46% | 11.53% |
| Sep 30, 2006 | 9.16% | 10.82% |
| Sep 30, 2005 | 8.22% | 9.72% |
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), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
Comparison to Industry (Industrials)
Emerson Electric Co., net profit margin, long-term trends, comparison to industry (industrials)
| Emerson Electric Co. | Industrials | |
|---|---|---|
| Sep 30, 2019 | 12.55% | 4.11% |
| Sep 30, 2018 | 12.66% | 4.75% |
| Sep 30, 2017 | 9.94% | 5.79% |
| Sep 30, 2016 | 11.26% | 7.43% |
| Sep 30, 2015 | 12.15% | 6.48% |
| Sep 30, 2014 | 8.75% | 8.76% |
| Sep 30, 2013 | 8.12% | 8.23% |
| Sep 30, 2012 | 8.06% | 7.39% |
| Sep 30, 2011 | 10.24% | 8.26% |
| Sep 30, 2010 | 10.29% | 7.48% |
| Sep 30, 2009 | 8.24% | 5.76% |
| Sep 30, 2008 | 9.72% | 7.27% |
| Sep 30, 2007 | 9.46% | 9.56% |
| Sep 30, 2006 | 9.16% | 14.87% |
| Sep 30, 2005 | 8.22% | 3.55% |
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), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).