Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Emerson Electric Co., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
The analysis of the financial performance over the reported quarters reveals notable trends and fluctuations across profitability and efficiency ratios.
- Gross Profit Margin
- The gross profit margin exhibits a generally stable and slightly increasing trend over the periods. Starting at 41.61% at the end of 2014, it remained in the low 40% range initially but experienced gradual improvement from 2016 onwards, peaking around 43.26% in early 2017. It sustained levels slightly above 42% thereafter until the first quarter of 2020, suggesting maintained efficiency in production and cost control relative to revenue.
- Operating Profit Margin
- The operating profit margin showed greater volatility. Initially rising from 14.91% at the end of 2014 to nearly 20% by the end of 2015, it then declined and fluctuated mostly between 15.5% and 18% in subsequent quarters. This indicates some operational challenges or variations in operating expenses, although the margin remained reasonably healthy without substantial long-term deterioration.
- Net Profit Margin
- Net profit margins follow a trajectory similar to the operating margin but at lower absolute levels, reflecting the impact of taxes and non-operating items. After starting near 9% at the end of 2014, the margin improved significantly to around 12% by 2015’s end. It then fluctuated mostly between 10% and 13%, with a slight upward bias, reaching around 12% by early 2020. This reflects overall solid profitability after all expenses and obligations.
- Return on Equity (ROE)
- ROE exhibited considerable variability, with a strong peak at 33.99% at the end of 2015, followed by a declining trend reaching a low near 17.41% in late 2017. Subsequently, ROE rebounded robustly, reaching close to 28.79% by the first quarter of 2020. This performance suggests periods of both enhanced and diminished shareholder value generation, possibly influenced by changes in leverage, earnings, or equity base.
- Return on Assets (ROA)
- ROA also showed shifts, starting around 9.32% and peaking at 12.27% mid-2015 before declining below 7.5% in late 2016 and early 2017. It then recovered steadily, reaching approximately 11.25% in late 2019 before slight decline to near 9.97% by early 2020. Despite some weakness in 2016-2017, the overall return on assets remained at a relatively strong level indicating effective asset utilization.
In summary, the company sustained a generally strong gross margin with stable cost management. Operating and net margins showed some volatility but remained healthy overall. The return metrics indicated periods of both contraction and growth in profitability and asset utilization, with a notable recovery trend in recent years toward early 2020. Observed fluctuations in ROE relative to ROA suggest changes in financial leverage or equity structure over the evaluated periods.
Return on Sales
Return on Investment
Gross Profit Margin
Emerson Electric Co., gross profit margin calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Gross profit | 1,750) | 1,759) | 2,128) | 2,001) | 1,925) | 1,761) | 2,065) | 1,949) | 1,825) | 1,621) | 1,804) | 1,678) | 1,557) | 1,365) | 1,713) | 1,593) | 1,542) | 1,414) | 2,368) | 2,234) | 2,166) | 2,280) | |||||||
| Net sales | 4,162) | 4,151) | 4,971) | 4,684) | 4,570) | 4,147) | 4,888) | 4,456) | 4,248) | 3,816) | 4,435) | 4,039) | 3,574) | 3,216) | 3,932) | 3,674) | 3,579) | 3,337) | 5,814) | 5,503) | 5,400) | 5,587) | |||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| Gross profit margin1 | 42.51% | 42.52% | 42.54% | 42.39% | 42.63% | 42.84% | 42.85% | 42.46% | 41.89% | 41.98% | 41.95% | 42.77% | 43.26% | 43.14% | 43.12% | 42.17% | 41.45% | 40.80% | 40.57% | 41.07% | 41.37% | 41.61% | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Gross Profit Margin, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
1 Q2 2020 Calculation
Gross profit margin = 100
× (Gross profitQ2 2020
+ Gross profitQ1 2020
+ Gross profitQ4 2019
+ Gross profitQ3 2019)
÷ (Net salesQ2 2020
+ Net salesQ1 2020
+ Net salesQ4 2019
+ Net salesQ3 2019)
= 100 × (1,750 + 1,759 + 2,128 + 2,001)
÷ (4,162 + 4,151 + 4,971 + 4,684)
= 42.51%
2 Click competitor name to see calculations.
- Gross Profit
- The gross profit shows fluctuations over the analyzed quarters, with a notable decline observed in the quarters ending December 31, 2015, and December 31, 2016, compared to previous quarters. Despite some recovery periods following these drops, the gross profit does not return to the earlier peak levels seen in late 2014. From March 31, 2017, onward, gross profit generally trends upward until a slight dip occurs towards the end of the period around March 31, 2020, where the value is close to that of December 31, 2018, indicating moderate volatility but relative stability in the later periods.
- Net Sales
- Net sales exhibit a pattern of considerable variation with marked decreases at the end of 2015 and 2016, mirroring the declines seen in gross profit. Subsequent quarters show a recovery trend with progressive increases in sales figures from early 2017 through 2019. However, sales appear to plateau and slightly decrease towards early 2020. The fluctuations suggest that the company experienced periods of contraction followed by recovery, but the overall growth trajectory stabilizes in the later quarters.
- Gross Profit Margin
- The gross profit margin percentage remains relatively stable throughout the entire period, consistently hovering around the 40-43% range. A slight upward trend is noticeable from the middle of 2015 through 2018, peaking in 2016 and maintaining a level just above 42% in subsequent years. This stability in margin, despite fluctuations in absolute gross profit and net sales, indicates effective cost management or pricing strategies that maintained profitability ratios even when sales volumes varied.
- Summary Insights
- While absolute gross profit and net sales values demonstrate notable volatility with periods of decline and recovery, the gross profit margin percentage maintains consistency. This suggests the company managed to control cost of goods sold effectively relative to sales across the quarters. The observed dips in sales and gross profit in 2015 and 2016 indicate possible external or internal challenges during those times, but subsequent recovery signifies resilience. Toward the end of the period, the stabilization of both sales and profitability margins suggests a mature phase in the financial cycle, with limited growth but maintained profitability.
Operating Profit Margin
Emerson Electric Co., operating profit margin calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Earnings from continuing operations before interest and income taxes | 725) | 458) | 866) | 810) | 723) | 634) | 784) | 807) | 694) | 541) | 724) | 660) | 606) | 510) | 723) | 702) | 598) | 481) | 1,041) | 836) | 1,644) | 811) | |||||||
| Net sales | 4,162) | 4,151) | 4,971) | 4,684) | 4,570) | 4,147) | 4,888) | 4,456) | 4,248) | 3,816) | 4,435) | 4,039) | 3,574) | 3,216) | 3,932) | 3,674) | 3,579) | 3,337) | 5,814) | 5,503) | 5,400) | 5,587) | |||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| Operating profit margin1 | 15.91% | 15.55% | 16.51% | 16.14% | 16.32% | 16.46% | 16.23% | 16.31% | 15.84% | 15.95% | 16.38% | 16.93% | 17.65% | 17.59% | 17.24% | 17.20% | 16.21% | 19.96% | 19.42% | 17.83% | 18.40% | 14.91% | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Operating Profit Margin, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
1 Q2 2020 Calculation
Operating profit margin = 100
× (Earnings from continuing operations before interest and income taxesQ2 2020
+ Earnings from continuing operations before interest and income taxesQ1 2020
+ Earnings from continuing operations before interest and income taxesQ4 2019
+ Earnings from continuing operations before interest and income taxesQ3 2019)
÷ (Net salesQ2 2020
+ Net salesQ1 2020
+ Net salesQ4 2019
+ Net salesQ3 2019)
= 100 × (725 + 458 + 866 + 810)
÷ (4,162 + 4,151 + 4,971 + 4,684)
= 15.91%
2 Click competitor name to see calculations.
- Earnings from continuing operations before interest and income taxes
- The earnings demonstrate notable variability over the observed periods. The figure peaked in the first quarter of 2015 at 1,644 million US dollars but experienced sharp fluctuations afterwards, notably dropping to 481 million in the fourth quarter of 2015. Subsequent quarters show some recovery and stabilization, with earnings generally ranging between approximately 500 to 800 million US dollars. There is a marked decline in the first quarter of 2020 to 458 million, indicating a recent downward shift.
- Net sales
- Net sales exhibit a somewhat volatile pattern with a clear seasonal trend. Sales volumes reached a high point in the fourth quarter of 2014 at 5,587 million US dollars, followed by a trough at the end of 2015 with 3,337 million US dollars. Post-2015, sales show a gradual upward trend with peaks occurring towards the latter part of each year, notably increasing to near or above 4,000 million US dollars in many quarters from 2017 onward. The first quarter of 2020 shows a decline to 4,162 million, slightly below the previous quarter's 4,151 million, suggesting potential softness in sales at the start of 2020.
- Operating profit margin
- The operating profit margin is generally stable with minor fluctuations throughout the periods. Margins ranged from approximately 14.9% to just under 20%, peaking near 20% in the fourth quarter of 2015. Post this peak, the margin settled mostly between 15.5% and 17%, demonstrating consistent operational efficiency amid fluctuating sales and earnings. The margin has exhibited a slight declining tendency from late 2018 into early 2020, reaching approximately 15.9% in the first quarter of 2020.
- Overall analysis
- The financial data reveals a company experiencing cyclical fluctuations in earnings and sales, with periods of peak performance followed by contractions, particularly notable around the end of 2015. Since then, the company has seen a gradual recovery and stabilization in sales and earnings, although recent data indicates some softness beginning in early 2020. The operating profit margin’s relative stability suggests disciplined cost management and operational control despite variable revenue and earnings streams. However, the declining margin trend toward the most recent periods may warrant attention to maintain profitability.
Net Profit Margin
Emerson Electric Co., net profit margin calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Net earnings common stockholders | 517) | 326) | 717) | 604) | 520) | 465) | 617) | 712) | 482) | 392) | 504) | 413) | 292) | 309) | 438) | 479) | 369) | 349) | 648) | 564) | 973) | 525) | |||||||
| Net sales | 4,162) | 4,151) | 4,971) | 4,684) | 4,570) | 4,147) | 4,888) | 4,456) | 4,248) | 3,816) | 4,435) | 4,039) | 3,574) | 3,216) | 3,932) | 3,674) | 3,579) | 3,337) | 5,814) | 5,503) | 5,400) | 5,587) | |||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| Net profit margin1 | 12.04% | 11.79% | 12.55% | 12.06% | 12.81% | 12.83% | 12.66% | 12.33% | 10.83% | 10.09% | 9.94% | 9.84% | 10.54% | 11.08% | 11.26% | 11.25% | 10.59% | 12.64% | 12.15% | 10.61% | 10.94% | 9.01% | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Net Profit Margin, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
1 Q2 2020 Calculation
Net profit margin = 100
× (Net earnings common stockholdersQ2 2020
+ Net earnings common stockholdersQ1 2020
+ Net earnings common stockholdersQ4 2019
+ Net earnings common stockholdersQ3 2019)
÷ (Net salesQ2 2020
+ Net salesQ1 2020
+ Net salesQ4 2019
+ Net salesQ3 2019)
= 100 × (517 + 326 + 717 + 604)
÷ (4,162 + 4,151 + 4,971 + 4,684)
= 12.04%
2 Click competitor name to see calculations.
The quarterly financial data reveals notable fluctuations and trends in key performance metrics over the observed periods.
- Net Earnings Common Stockholders
- The net earnings exhibit considerable volatility throughout the quarters. There is a significant peak at March 31, 2015, followed by a general downward trend until the end of 2015. Earnings then rebound intermittently with pronounced increases observed in December 31, 2017, June 30, 2018, and December 31, 2019. The data from March 31, 2020, indicates a sharp decline relative to previous quarters, suggesting potential challenges impacting profitability.
- Net Sales
- Net sales figures show a pattern of fluctuation with periods of growth and contraction. The data indicates a decrease around the end of 2015 and early 2016, followed by a steady increase through 2017 and 2018, reaching higher sales levels in late 2018. Despite some variability, the trend over the entire period leans towards gradual growth, but with a noticeable dip in sales reported by March 31, 2020, which may correlate with the reduction seen in earnings.
- Net Profit Margin
- The net profit margin demonstrates resilience, maintaining a relatively stable range between 9% and 13%. While minor fluctuations are visible quarter to quarter, the margin tends to improve in the latter part of the timeline, peaking in December 31, 2018, and sustaining levels above 12% through 2019. The quarter ending March 31, 2020, sees a slight decrease, though it remains within the historical range observed.
In summary, the data reflects a cyclical nature in earnings and sales, with periods of recovery following downturns. Profit margins maintain consistency, indicating effective cost management or operational efficiency despite fluctuations in revenues and net earnings. The downturn in early 2020 warrants further investigation, potentially linked to external macroeconomic factors affecting the business environment.
Return on Equity (ROE)
Emerson Electric Co., ROE calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Net earnings common stockholders | 517) | 326) | 717) | 604) | 520) | 465) | 617) | 712) | 482) | 392) | 504) | 413) | 292) | 309) | 438) | 479) | 369) | 349) | 648) | 564) | 973) | 525) | |||||||
| Common stockholders’ equity | 7,517) | 8,421) | 8,233) | 8,755) | 8,526) | 8,236) | 8,947) | 8,413) | 8,492) | 8,349) | 8,718) | 7,966) | 8,006) | 7,713) | 7,568) | 7,901) | 7,692) | 7,456) | 8,081) | 8,749) | 8,918) | 9,513) | |||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| ROE1 | 28.79% | 25.73% | 28.01% | 25.20% | 27.14% | 27.63% | 24.62% | 24.84% | 21.09% | 19.18% | 17.41% | 18.23% | 18.96% | 20.68% | 21.60% | 23.35% | 25.09% | 33.99% | 33.54% | 28.25% | 29.56% | 23.23% | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| ROE, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
1 Q2 2020 Calculation
ROE = 100
× (Net earnings common stockholdersQ2 2020
+ Net earnings common stockholdersQ1 2020
+ Net earnings common stockholdersQ4 2019
+ Net earnings common stockholdersQ3 2019)
÷ Common stockholders’ equity
= 100 × (517 + 326 + 717 + 604)
÷ 7,517 = 28.79%
2 Click competitor name to see calculations.
The financial data reveals several notable trends in the company’s quarterly performance over the observed periods. Net earnings attributable to common stockholders have exhibited considerable fluctuation. Initially, earnings reached a peak early in the period, followed by a pronounced decline towards the end of 2015. Subsequently, net earnings experienced periods of recovery and growth through 2017 and 2018, achieving higher amounts relative to earlier lows. However, the earnings again saw some decline in early 2020.
Common stockholders’ equity shows a generally declining trajectory from the end of 2014 through 2018, with some intermittent recoveries, particularly noticeable between late 2017 and early 2018. After reaching approximately 8,947 million US dollars in early 2018, equity declined again toward the last quarters, ending the period significantly lower compared to the beginning.
Return on equity (ROE) percentages reflect the changing relationship between net earnings and equity. ROE was particularly strong during 2014 and 2015, peaking above 30%, indicating efficient use of equity during that time. However, ROE decreased steadily toward the end of 2017, reaching a low around 17%. From 2018 onward, ROE rebounded, showing increased profitability relative to equity, climbing back near 28% by early 2020.
In summary, the analysis indicates that while the company experienced volatile net earnings, it managed to maintain overall strong profitability relative to equity, as evidenced by ROE trends. Declines in equity in certain periods suggest equity reduction or increased liabilities, but improvements in ROE in later periods imply enhanced efficiency in generating profit from the capital base. The fluctuations in quarterly earnings call for attention to operational or market factors influencing profitability stability.
- Net Earnings
- Displayed volatility with peaks in early periods, a mid-cycle dip, recovery phases, and a recent decline.
- Highest earnings generally occurred between late 2017 and 2018, followed by a variable pattern.
- Common Stockholders’ Equity
- Demonstrated a downward trend overall, with intermittent increases notably around early 2018.
- Closing value was materially lower than the starting value, pointing to capital base contractions.
- Return on Equity (ROE)
- Initial periods showed strong returns exceeding 30%.
- Subsequent declines led to lows around 17%, indicating reduced profitability related to equity.
- Recovery in later periods brought ROE back to levels near 28%, reflecting improved cost or profit management.
Return on Assets (ROA)
Emerson Electric Co., ROA calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Net earnings common stockholders | 517) | 326) | 717) | 604) | 520) | 465) | 617) | 712) | 482) | 392) | 504) | 413) | 292) | 309) | 438) | 479) | 369) | 349) | 648) | 564) | 973) | 525) | |||||||
| Total assets | 21,711) | 21,101) | 20,497) | 21,317) | 21,071) | 20,429) | 20,390) | 20,487) | 19,785) | 19,858) | 19,589) | 19,402) | 17,277) | 17,471) | 21,743) | 22,082) | 21,764) | 21,552) | 22,088) | 23,464) | 22,968) | 23,724) | |||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| ROA1 | 9.97% | 10.27% | 11.25% | 10.35% | 10.98% | 11.14% | 10.80% | 10.20% | 9.05% | 8.06% | 7.75% | 7.48% | 8.79% | 9.13% | 7.52% | 8.36% | 8.87% | 11.76% | 12.27% | 10.54% | 11.48% | 9.32% | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| ROA, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
1 Q2 2020 Calculation
ROA = 100
× (Net earnings common stockholdersQ2 2020
+ Net earnings common stockholdersQ1 2020
+ Net earnings common stockholdersQ4 2019
+ Net earnings common stockholdersQ3 2019)
÷ Total assets
= 100 × (517 + 326 + 717 + 604)
÷ 21,711 = 9.97%
2 Click competitor name to see calculations.
- Net Earnings for Common Stockholders
- The net earnings demonstrate notable volatility over the observed periods. Starting with a high of $973 million in the first quarter of 2015, earnings dropped sharply to $349 million by the end of that year. A recovery trend is evident in the subsequent quarters, with earnings peaking again at $712 million in mid-2018 before experiencing fluctuations. The most recent quarters show a mixed pattern, with a significant dip in the first quarter of 2020 to $326 million, indicating variability in profitability possibly due to changing market conditions or operational challenges.
- Total Assets
- Total assets show a generally stable but slightly declining pattern from the end of 2014 through 2016, decreasing from $23,724 million to $17,471 million. However, after this period, total assets stabilize and gradually increase again, reaching $21,711 million by the first quarter of 2020. This suggests a phase of consolidation followed by growth or asset reallocation in the latter years.
- Return on Assets (ROA)
- ROA percentages reflect moderate fluctuations without dramatic shifts. Early in the timeline, the ROA peaks at 12.27% but then declines to a range around 7.5% to 8.0% during 2016 and 2017. Subsequently, the ROA recovers to above 10% during 2018 and 2019, indicating improved efficiency in asset utilization. The initial quarter of 2020 shows a slight decline again to just under 10%, aligning with the decrease in net earnings for that period.
- Overall Insights
- The company’s financial performance reveals a cyclical pattern in earnings and efficiency, with phases of decline followed by recovery. Total assets held relatively stable after an initial decline, suggesting controlled asset management. The periodic fluctuations in net earnings and ROA may indicate external economic influences or internal operational adjustments impacting profitability and asset use. The recent decline in the initial quarter of 2020 warrants attention as it could signal emerging challenges.