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Emerson (EMR) is scheduled to announce its 2nd quarter 2013 earnings before the market opens on Tuesday, May 7th. Below I have provided an update of the quarter as well as an overview of earnings expectations.

Profile and Estimates

Emerson has a market cap of $41.03 billion and currently trades for $56.82 per share. Shares are up 8.04% YTD and trade 33.38% above their 52-week low of $42.60. Analysts have a mean target price of $61.14 and a median price target of $60.00 on the shares. Twenty five analysts have an average 2nd quarter earnings per share estimate of $0.78 on estimated revenues of $6.03 billion. Emerson has beat the average earnings estimate in two of the last four quarters.

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Fundamentals and Highlights (Sources cited below article)

Positives

  • 2.85% dividend yield.
  • P/E of 20.4 which is below the industry averages 33.9.
  • ROA of 8.7 and ROE of 19.9 are both above the industry averages 7.7 and 13.1 respectively.
  • ROIC has been above 10% over the last 8 years.
  • Has returned close to 80% of free cashflows over the last 8 years.
  • Positive growth from emerging markets.

Negatives

  • Operates in highly cyclical industries.
  • P/B of 3.9 and P/S of 1.7 are both above the industry averages 2.2 and 1.4 respectively.
  • Operating margins of 15.6% and net margins of 8.3% are both below the industry averages 17.8% and 11.5% respectively.
  • Industrial goods have been among the worst performing sectors in the last three months

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Take Away

The short interest for Emerson was at its highest point in the last year on 4/15/13 which indicates that some investors are starting to expecting a pullback, days to cover stood at 4.31. However, long-term, its hard to find a more consistent industrial goods provider. Keep an eye out for earnings on Tuesday!

Sources

In addition to the links above, ratios and financial data was sourced from Morningstar.com, which you can find here.

Other company data was sourced from the 1st quarter report that can be found here.

Source: Emerson's Second Quarter Earnings Preview