Emerson Electric Co. (NYSE:EMR)

Earnings

Earnings demonstrate a fluctuating pattern over the observed periods. Starting without data in 2014, earnings reached 1,846 million USD in 2015 but declined to 1,456 million USD in 2016. A moderate recovery occurred in 2017 with earnings increasing slightly to 1,522 million USD. This positive trend continued more notably through 2018 and 2019, with earnings rising to 1,886 million USD and 1,947 million USD respectively, indicating overall growth in recent years.

Sales

Sales figures show variability but an overall upward trajectory during the period. Beginning with no value in 2014, sales decreased from 10,153 million USD in 2015 to 8,977 million USD in 2016. Subsequently, sales recovered progressively, increasing to 9,418 million USD in 2017, 11,441 million USD in 2018, and reaching 12,202 million USD in 2019. The latter years illustrate a substantial growth trend in sales volume.

Segment Profit Margin

Segment profit margin percentages exhibit a generally declining trend over the time frame. The margin started at 18.18% in 2015 but decreased to 16.22% in 2016, followed by a slight dip to 16.16% in 2017. A minor upward adjustment to 16.48% was observed in 2018; however, it again decreased to 15.96% in 2019. This pattern suggests some pressure on profitability relative to sales, despite increasing absolute earnings.

The analysis of the Climate Technologies segment over the observed periods reveals several trends in earnings, sales, and segment profit margin. The data spans six fiscal years from 2014 to 2019, with partial information starting from 2015.

Earnings

Earnings demonstrate a general upward trajectory from 2015 through 2017, increasing from 835 million US dollars in 2015 to 975 million in 2017. Following this peak, earnings modestly decline to 972 million in 2018 and further to 883 million in 2019, indicating some volatility or challenges in maintaining peak profitability levels.

Sales

Sales exhibit relative stability with fluctuations over the years. Starting at 4006 million US dollars in 2015, sales slightly decreased to 3944 million in 2016. Subsequently, sales rose to a high of 4454 million in 2018 before declining to 4313 million in 2019. This pattern suggests moderate growth with some variability in demand or pricing during the period.

Segment Profit Margin

The segment profit margin shows improvement from 2015 to 2017, rising from 20.84% to a peak of 23.15% in 2017. Thereafter, margins decrease to 21.82% in 2018 and further to 20.47% in 2019. This decline correlates with the reduced earnings despite relatively high sales, pointing to potential cost pressures or increased expenses affecting profitability.

In summary, the segment experienced growth in earnings and profitability until 2017, after which both metrics showed a downward trend through 2019. Sales remained fairly stable but did not consistently increase, indicating possible market saturation or competitive pressures. The declining profit margin toward the end of the period suggests challenges in cost management or pricing strategies.

The analysis of the financial performance of the Tools & Home Products segment over the periods from September 30, 2014, to September 30, 2019, reveals several noteworthy trends across earnings, sales, and segment profit margin.

Earnings (US$ in millions)

Earnings demonstrate a generally positive trend starting from 2015, with values increasing from 364 million US dollars in 2015 to 388 million US dollars in 2019. The earnings experienced a slight rise from 364 million to 384 million US dollars between 2015 and 2016. Subsequently, earnings remained relatively stable around 380 million to 388 million US dollars from 2017 through 2019, reflecting moderate growth and overall stability in profitability.

Sales (US$ in millions)

Sales figures exhibit some fluctuations throughout the observed period. Following a slight decrease from 1625 million US dollars in 2015 to 1611 million US dollars in 2016, sales increased modestly to 1645 million US dollars in 2017. However, sales declined to 1528 million US dollars in 2018 before experiencing a significant rebound to 1856 million US dollars in 2019. This surge in 2019 marks the highest sales level in the period under review, suggesting renewed demand or successful sales initiatives during that year.

Segment Profit Margin (%)

The segment profit margin shows variability over the years, starting at 22.4% in 2015, rising to a peak of 24.87% in 2018, indicative of improved operational efficiency or cost management. However, the margin declined notably to 20.91% in 2019 despite the increase in sales and earnings that year. This decline in profit margin could imply higher costs or pricing pressures affecting profitability even as top-line growth occurred.

In summary, the Tools & Home Products segment displayed steady earnings and fluctuating sales with a notable increase in 2019. Profitability in terms of margin improved initially but faced downward pressure in the last reported period, suggesting a need to investigate cost structures or market conditions that may have impacted profitability despite increased revenue.

Earnings

Earnings for the segment displayed variability over the reported years. Starting from 2015, earnings reached a high of 1,846 million US dollars, then experienced a decline to 1,456 million in 2016. This was followed by a moderate recovery to 1,522 million in 2017. Subsequent years saw a stronger growth trend, with earnings increasing to 1,886 million in 2018 and further to 1,947 million in 2019. Overall, earnings showed resilience with a positive trend in the latter part of the period.

Total Assets

Total assets for the segment exhibited a consistent upward trajectory throughout the period. From 2015 to 2019, total assets grew from 8,817 million to 13,996 million US dollars, reflecting a significant increase. The most notable growth occurred between 2016 and 2017, where assets surged from 8,759 million to 12,581 million. This continued increase indicates an expansion in the segment's asset base over the years.

Segment Return on Assets (ROA)

The segment ROA demonstrated a declining trend starting from 2015, where it was 20.94%. It then decreased to 16.62% in 2016 and dropped further to 12.1% in 2017. After this decline, ROA showed a slight recovery, reaching 13.75% in 2018 and slightly improving to 13.91% in 2019. Despite the recovery, the overall trend suggests a reduction in asset profitability compared to the earlier years.

The financial performance and asset base of the Climate Technologies segment demonstrate various trends over the six-year period ending September 30, 2019.

Earnings

Earnings exhibited growth from 2015 through 2017, increasing from 835 million to a peak of 975 million. Subsequent years saw a slight decline, with earnings falling to 972 million in 2018 and further to 883 million in 2019. This indicates a peak in profitability around 2017 followed by a moderate downturn.

Total Assets

Total assets showed a general upward trend from 2015 to 2018, rising from 2,455 million to 2,936 million. In 2019, there was a slight decrease to 2,885 million. The steady increase until 2018 reflects continued investment or asset accumulation, while the minor decline in 2019 may suggest asset disposals or revaluations.

Segment Return on Assets (ROA)

Segment ROA improved consistently from 34.01% in 2015 to a high of 38.28% in 2017, indicating increased efficiency in using assets to generate earnings. However, in 2018 and 2019, the ROA declined to 33.11% and 30.61% respectively. The reduction aligns with earnings decline and the asset base plateau, implying decreased profitability relative to asset size toward the end of the period.

Overall, the Climate Technologies segment experienced growth in earnings and asset base through the mid-point of the period analyzed, accompanied by rising ROA. The trend reversed moderately in the latter years, showing decreases in both earnings and asset utilization efficiency despite relatively stable total assets. These patterns suggest a phase of expansion followed by a period of consolidation or challenges affecting profitability.

The analysis of the financial data for the “Tools & Home Products” segment over the six-year period reveals several notable trends in earnings, total assets, and the segment's return on assets (ROA).

Earnings:

Earnings demonstrate a generally stable performance with slight fluctuations. Starting from a reported value in 2015 at 364 million USD, earnings increased gradually to 384 million USD in 2016 and remained almost constant through 2017 and 2018, followed by a minor uptick to 388 million USD in 2019. This stability suggests consistent profitability within the segment over these years.

Total Assets:

Total assets exhibited more variability compared to earnings. There was a modest decrease from 817 million USD in 2015 to 809 million USD in 2016, followed by a small increase to 830 million USD in 2017. Subsequently, total assets surged significantly to 1,560 million USD in 2018, before reducing to 1,462 million USD in 2019. This considerable increase in 2018 may indicate asset acquisitions, expansions, or revaluations, while the slight decrease in 2019 suggests some divestitures or adjustments.

Segment Return on Assets (ROA):

The segment ROA reflects efficiency in asset utilization to generate earnings and shows a declining trend over the analyzed years. Starting from a high 44.55% in 2015, it peaked at 47.47% in 2016, then slightly decreased to 46.14% in 2017. However, ROA dropped sharply to 24.36% in 2018 and increased marginally to 26.54% in 2019. The downturn in 2018 coincides with the surge in total assets, indicating that additional assets acquired may have not translated proportionately into earnings during that period, reducing overall asset efficiency.

In summary, the segment maintained relatively stable earnings despite fluctuations in its asset base. The significant growth in total assets in 2018 was not accompanied by a commensurate increase in earnings, leading to a marked decline in ROA. Although there was a slight recovery in ROA in 2019, it remained substantially lower than the earlier years, implying ongoing challenges in asset utilization efficiency.

Sales

Sales data for the segment shows an initial value missing in 2014, followed by a significant amount of US$10,153 million in 2015. This was followed by a decline in 2016 to US$8,977 million. Sales then experienced a recovery and growth trend, reaching US$9,418 million in 2017, increasing further to US$11,441 million in 2018, and continuing to rise to US$12,202 million in 2019. This pattern indicates a temporary downturn in 2016, succeeded by consistent growth over the following three years.

Total Assets

Total assets in the segment were US$8,817 million in 2015, slightly decreasing to US$8,759 million in 2016. A notable increase occurred in 2017 with assets climbing to US$12,581 million, and this upward trajectory continued through 2018 and 2019, reaching US$13,720 million and US$13,996 million respectively. The asset base thus expanded substantially starting in 2017, reflecting increased investment or asset accumulation within the segment.

Segment Asset Turnover

Segment asset turnover demonstrated a declining trend from 2015 to 2017, starting at a ratio of 1.15 in 2015, dropping to 1.02 in 2016, and further down to 0.75 in 2017. This decline indicates a decreasing efficiency in using assets to generate sales during this period. However, from 2017 onwards, asset turnover ratios improved slightly, rising to 0.83 in 2018 and 0.87 in 2019, showing a partial recovery in asset utilization efficiency, although not reaching earlier levels.

The analysis of the "Climate Technologies" segment from 2015 to 2019 reveals several notable trends in sales, total assets, and asset turnover ratios.

Sales

Sales exhibited a fluctuation pattern during the analyzed period. Starting at $4,006 million in 2015, sales slightly decreased to $3,944 million in 2016. Subsequently, sales increased to $4,212 million in 2017 and peaked at $4,454 million in 2018. However, in 2019, sales declined to $4,313 million. Overall, sales showed a general upward trend with some volatility, reaching the highest point in 2018.

Total Assets

Total assets increased continuously from 2015 through 2018, moving from $2,455 million to $2,936 million. In 2019, total assets slightly decreased to $2,885 million. This pattern indicates investment growth in assets over the period, with a minor contraction at the end of the timeframe.

Segment Asset Turnover

The segment asset turnover ratio, which measures sales generated per unit of assets, demonstrated a declining trend over the five years. It started at 1.63 in 2015, fluctuated slightly with a peak of 1.65 in 2017, then steadily decreased through 2018 and 2019 to reach 1.49. This suggests a gradual reduction in the efficiency of asset utilization in generating sales during the later years.

In summary, while sales and total assets generally increased through most of the period, the asset turnover ratio declined, indicating less efficient use of the assets over time within the segment. The peak sales year of 2018 coincided with the highest total assets, but the efficiency of asset use was already on a downward path by then.

The analysis of the annual data for the Tools & Home Products segment reveals several key trends and developments over the period observed.

Sales Trend

Sales figures indicate a moderate fluctuation with an overall upward trend from 2015 to 2019. After a slight decrease from 1625 million US dollars in 2015 to 1611 million in 2016, sales experienced a minor recovery in 2017, followed by a decline in 2018. Notably, 2019 marked a substantial increase, reaching 1856 million US dollars, the highest value within the period.

Total Assets

Total assets exhibited relative stability in the early years, remaining close to the 800 million US dollars level from 2015 through 2017. This was followed by a significant jump to 1560 million in 2018, more than doubling the prior year's assets, before declining to 1462 million in 2019. This sharp rise and subsequent decrease suggest major asset acquisitions or reclassifications occurred around 2018.

Segment Asset Turnover Ratio

The segment asset turnover ratio remained almost constant around 1.98 to 1.99 during 2015 to 2017, indicating stable efficiency in utilizing assets to generate sales. However, the ratio dropped sharply to 0.98 in 2018, coinciding with the large increase in total assets, implying a temporary decline in asset utilization efficiency. In 2019, the ratio improved to 1.27, suggesting a partial recovery in asset productivity but still below the earlier period's levels.

In summary, the Tools & Home Products segment experienced a phase of stable sales and asset efficiency from 2015 to 2017, followed by significant asset growth in 2018 that temporarily reduced operational efficiency. The recovery in sales and asset turnover in 2019 indicates efforts to better leverage the expanded asset base, although the asset turnover has not fully returned to previous efficiency levels.

Capital Expenditures

Capital expenditures exhibited fluctuations over the reviewed period from 2015 to 2019. The value decreased from 298 million US dollars in 2015 to 234 million in 2017, representing a downward trend during this interval. Subsequently, capital expenditures rose again, reaching 297 million US dollars in 2019, nearly returning to the 2015 level. This pattern indicates variable investment activity within the segment, without a consistent increasing or decreasing trend.

Depreciation and Amortization

Depreciation and amortization expenses showed a continuous upward trajectory across the period from 2015 through 2019. Starting at 311 million US dollars in 2015, these expenses increased each year, culminating at 535 million US dollars in 2019. This progressive rise could reflect ongoing capital asset aging or increased asset bases subject to amortization.

Segment Capital Expenditures to Depreciation Ratio

The ratio of capital expenditures to depreciation declined steadily from 0.96 in 2015 to 0.56 in 2019. This reduction signifies that capital expenditures are growing at a slower pace relative to depreciation and amortization expenses. A ratio below one indicates that the segment’s investment in capital assets is insufficient to fully offset the depreciation, suggesting possible underinvestment in maintaining or expanding the asset base over these years.

Capital Expenditures

The capital expenditures data shows a consistent upward trend from 2015 through 2019. Starting at $154 million in 2015, the investment increased to $222 million by 2019. Despite a decrease observed in 2016 to $133 million, the subsequent years reflect a steady increase, indicating growing capital investment in the segment over the period.

Depreciation and Amortization

Depreciation and amortization expenses show a moderate but steady increase over the analyzed period. Beginning at $149 million in 2015, these expenses rose incrementally to $176 million in 2019. This gradual increase suggests ongoing asset usage and the addition of capital assets over time.

Segment Capital Expenditures to Depreciation Ratio

The ratio of capital expenditures to depreciation exhibits fluctuating yet generally increasing values across the years. It starts at 1.03 in 2015, dips to 0.89 in 2016, and then climbs to 1.26 by 2019. This pattern indicates that capital investments consistently outpaced the depreciation expense, especially after 2016, reflecting expansion or asset upgrades surpassing asset consumption.

The reportable segment "Tools & Home Products" exhibits certain financial trends over the six-year period ending in 2019. The analysis of capital expenditures, depreciation and amortization, and the ratio of capital expenditures to depreciation reveals insights into investment and asset management within the segment.

Capital Expenditures

Capital expenditures show a general upward movement starting from 46 million USD in 2015, fluctuating slightly around the mid-forties for the next two years before peaking at 64 million USD in 2018. Subsequently, there is a slight decline to 59 million USD in 2019. This pattern indicates a period of increased investment in fixed assets peaking in 2018, followed by a minor reduction.

Depreciation and Amortization

Depreciation and amortization costs remained relatively stable from 2015 through 2018, oscillating narrowly between 42 and 45 million USD. A marked increase occurs in 2019, with the figure rising sharply to 71 million USD. This significant jump may suggest accelerated depreciation policies, asset write-downs, or the addition of new, higher-cost assets being expensed.

Segment Capital Expenditures to Depreciation Ratio

The ratio starts above 1 in 2015 at 1.1 and then decreases to approximately 1 for the next two years, indicating capital expenditures were roughly equal to depreciation expense during this time frame. In 2018, the ratio rises noticeably to 1.45, reflecting a surge in capital investments relative to depreciation. However, this ratio retreats sharply in 2019 to 0.83, the lowest in the observed period, indicating that capital expenditures were lower relative to the higher depreciation expense incurred that year.

Overall, the segment experienced a phase of steady capital investment and consistent depreciation until 2018, when capital expenditures substantially increased relative to depreciation. This was followed by a significant spike in depreciation and amortization in 2019, which outpaced capital expenditures and resulted in a lower investment-to-depreciation ratio. These movements could reflect changes in asset base composition, investment cycles, or accounting adjustments within the segment.