ST. LOUIS, Aug. 7, 2024 /PRNewswire/ -- Emerson (NYSE: EMR) today reported results1 for its third quarter ended June 30, 2024 and updated its full year outlook for fiscal 2024. Emerson also declared a quarterly cash dividend of $0.525 per share of common stock payable September 10, 2024 to stockholders of record on August 16, 2024. (dollars in millions, except per share) 2023 Q3 2024 Q3 Change Underlying Orders2 3 % Net Sales $3,946 $4,380 11 % Underlying Sales3 3 % Pretax Earnings $822 $455 Margin 20.8 % 10.4 % (1040) bps Adjusted Segment EBITA4 $1,060 $1,189 Margin 26.9 % 27.1 % 20 bps GAAP Earnings Per Share $1.12 $0.60 (46) % Adjusted Earnings Per Share5 $1.29 $1.43 11 % Operating Cash Flow $842 $1,067 27 % Free Cash Flow $769 $975 27 % Management Commentary "Emerson delivered another strong quarter, with solid underlying orders growth and with profitability and cash flow both exceeding expectations," said Emerson President and Chief Executive Officer Lal Karsanbhai. "Demand in process and hybrid markets, led by a constructive capex cycle, continues to meet expectations. Our operating leverage performance demonstrates the benefits of our highly differentiated technology and world-class Emerson Management System, giving us the confidence to execute on our plan for 2024." Karsanbhai continued, "In the quarter, we also took another important step to simplify our portfolio and enhance our focus as a global leader in automation with the definitive agreement to completely exit the Copeland business. Emerson is creating value for our shareholders as we execute with our higher growth and higher margin automation portfolio." 2024 Outlook The following tables summarize the fiscal year 2024 guidance framework for continuing operations6. The 2024 outlook assumes approximately $300 million returned to shareholders through share repurchases and approximately $1.2 billion of dividend payments. Guidance figures are approximate. 2024 Net Sales Growth ~15% Underlying Sales Growth ~6% Earnings Per Share $2.82 - $2.87 Amortization of Intangibles ~$1.42 Restructuring and Related Costs ~$0.34 Loss on Copeland Note Receivable $0.38 Amortization of Acquisition-related Inventory Step-up $0.38 Acquisition / Divestiture Fees and Related Costs ~$0.24 Divestiture Loss / (Gain), net ($0.03) Discrete Tax Benefits ($0.10) Adjusted Earnings Per Share $5.45 - $5.50 Operating Cash Flow ~$3.2B Free Cash Flow ~$2.8B 1 Results are presented on a continuing operations basis. 2 Underlying orders does not include AspenTech. 3 Underlying sales excludes the impact of currency translation, and significant acquisitions and divestitures. 4 Adjusted segment EBITA represents segment earnings less restructuring and intangibles amortization expense. 5 Adjusted EPS excludes intangibles amortization expense, restructuring and related costs, the amortization of acquisition-related inventory step-up, acquisition/divestiture gains, losses, fees and related costs, discrete tax benefits, an AspenTech Micromine purchase price hedge and write-offs associated with Emerson's Russia exit. 6 With the June 6, 2024 definitive agreement to completely exit its remaining interests in the Copeland joint venture, Emerson will report financial results for the Copeland equity ownership as discontinued operations for all periods presented, beginning in Q3 2024. The earnings from discontinued operations for 2024 are expected to be $0.55 to $0.60 per share, including the after-tax gain on the equity stake in Copeland. The Copeland Note Receivable interest income through June 6, 2024 remains in continuing operations. The pretax loss on the sale of the note receivable, $279M ($217M after-tax), is also reported in continuing operations but excluded from adjusted earnings per share, ($0.38). Copeland Transaction Update As of August 2, 2024, Emerson has completed the previously announced sale of the Copeland Note Receivable to Copeland with pretax cash proceeds of $1.9 billion. The sale of the 40% equity stake to private equity funds managed by Blackstone, with pretax cash proceeds of $1.5 billion, is expected to close by the end of August. Emerson intends to use the approximately $2.9 billion after-tax cash proceeds from both transactions to pay down its existing debt obligations. Both transactions are expected to result in a net pretax gain of approximately $0.2 billion. Conference Call Today, beginning at 8:00 a.m. Central Time / 9:00 a.m. Eastern Time, Emerson management will discuss the third quarter results during an investor conference call. Participants can access a live webcast available at www.emerson.com/investors at the time of the call. A replay of the call will be available for 90 days. Conference call slides will be posted in advance of the call on the company website. About Emerson Emerson (NYSE:EMR) is a global technology and software company providing innovative solutions for the world's essential industries. Through its leading automation portfolio, including its majority stake in AspenTech, Emerson helps hybrid, process and discrete manufacturers optimize operations, protect personnel, reduce emissions and achieve their sustainability goals. For more information, visit Emerson.com. Forward-Looking and Cautionary Statements Statements in this press release that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later developments. These risks and uncertainties include the scope, duration and ultimate impacts of the Russia-Ukraine and other global conflicts, as well as economic and currency conditions, market demand, pricing, protection of intellectual property, cybersecurity, tariffs, competitive and technological factors, inflation, among others, as set forth in the Company's most recent Annual Report on Form 10-K and subsequent reports filed with the SEC. The outlook contained herein represents the Company's expectation for its consolidated results, other than as noted herein. Emerson uses our Investor Relations website, www.Emerson.com/investors, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts and social media. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document. Investors: Media: Colleen Mettler Joseph Sala / Greg Klassen (314) 553-2197 Joele Frank, Wilkinson Brimmer Katcher (212) 355-4449 (tables attached)   Table 1 EMERSON AND SUBSIDIARIES CONSOLIDATED OPERATING RESULTS (AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) Quarter Ended June 30, Nine Months EndedJune 30, 2023 2024 2023 2024 Net sales $   3,946 $   4,380 $ 11,075 $ 12,873      Cost of sales 1,952 2,066 5,660 6,359      SG&A expenses 1,042 1,254 3,072 3,827      Gain on subordinated interest — — — (79)      Loss on Copeland note receivable — 279 — 279      Other deductions, net 130 294 359 1,075      Interest expense, net 10 56 111 157      Interest income from related party1 (10) (24) (10) (86) Earnings from continuing operations before income taxes 822 455 1,883 1,341 Income taxes 168 88 400 266 Earnings from continuing operations 654 367 1,483 1,075 Discontinued operations, net of tax 8,712 (15) 10,979 (88) Net earnings 9,366 352 12,462 987 Less: Noncontrolling interests in subsidiaries 14 23 (13) 15 Net earnings common stockholders $   9,352 $      329 $ 12,475 $      972 Earnings common stockholders Earnings from continuing operations $      643 $      344 $   1,502 $   1,060 Discontinued operations 8,709 (15) 10,973 (88) Net earnings common stockholders $   9,352 $      329 $ 12,475 $      972 Diluted avg. shares outstanding 574.0 574.8 578.1 574.1 Diluted earnings per share common stockholders Earnings from continuing operations $1.12 $0.60 $2.60 $1.84 Discontinued operations 15.16 (0.03) 18.96 (0.15) Diluted earnings per common share $16.28 $0.57 $21.56 $1.69 Quarter Ended June 30, Nine Months EndedJune 30, 2023 2024 2023 2024 Other deductions, net      Amortization of intangibles $120 $264 $357 $811      Restructuring costs 12 57 41 170      Other (2) (27) (39) 94           Total $130 $294 $359 $1,075 1 Represents interest on the Copeland note receivable through June 6, 2024.   Table 2 EMERSON AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (DOLLARS IN MILLIONS, UNAUDITED) Sept 30, 2023 June 30, 2024 Assets      Cash and equivalents $             8,051 $             2,298      Receivables, net 2,518 2,761      Inventories 2,006 2,303      Other current assets 1,244 1,458 Total current assets 13,819 8,820      Property, plant & equipment, net 2,363 2,688      Goodwill 14,480 17,936      Other intangible assets 6,263 10,627      Copeland note receivable and equity investment held-for-sale 3,255 2,908      Other 2,566 2,606 Total assets $           42,746 $           45,585 Liabilities and equity      Short-term borrowings and current maturities of long-term debt $               547 $             2,991      Accounts payable 1,275 1,251      Accrued expenses 3,210 3,350 Total current liabilities 5,032 7,592      Long-term debt 7,610 7,111      Other liabilities 3,506 4,194 Equity      Common stockholders' equity 20,689 20,799      Noncontrolling interests in subsidiaries 5,909 5,889 Total equity 26,598 26,688 Total liabilities and equity $           42,746 $           45,585   Table 3 EMERSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN MILLIONS, UNAUDITED) Nine Months Ended June 30, 2023 2024 Operating activities Net earnings $          12,462 $              987 Earnings from discontinued operations, net of tax (10,979) 88 Adjustments to reconcile net earnings to net cash provided by operating activities:         Depreciation and amortization 780 1,263         Stock compensation 198 203         Amortization of acquisition-related inventory step-up — 231         Gain on subordinated interest — (79)         Loss on Copeland note receivable — 279         Changes in operating working capital (359) (176)         Other, net (383) (552)             Cash from continuing operations 1,719 2,244             Cash from discontinued operations (439) 4             Cash provided by operating activities 1,280 2,248 Investing activities Capital expenditures (194) (251) Purchases of businesses, net of cash and equivalents acquired — (8,342) Proceeds from subordinated interest 15 79 Proceeds from related party note receivable 918 — Other, net (124) (86)     Cash from continuing operations 615 (8,600)     Cash from discontinued operations 12,485 36     Cash provided by (used in) investing activities 13,100 (8,564) Financing activities Net increase (decrease) in short-term borrowings (1,476) 2,229 Proceeds from short-term borrowings greater than three months