Emerson Electric Co. (NYSE:EMR)

Gross profit margin

The gross profit margin showed some fluctuation over the analyzed period. It started at 41.4% in 2014 and decreased slightly to 40.57% in 2015, before increasing to a peak of 43.12% in 2016. Afterwards, it experienced a minor decline but remained relatively stable, ending at 42.54% in 2019. This indicates a generally consistent ability to manage production costs relative to revenue.

Operating profit margin

Operating profit margin displayed notable variation between 2014 and 2019. It increased significantly from 14.44% in 2014 to a high of 19.42% in 2015, suggesting improved operational efficiency or cost management. However, it then declined to below 17% during the subsequent years and stabilized around 16.5% by 2019. This pattern may reflect volatile operating conditions or strategic shifts impacting operating earnings.

Net profit margin

The net profit margin showed an overall upward trend despite some fluctuations. It rose from 8.75% in 2014 to 12.15% in 2015, experiencing a slight decrease to 9.94% in 2017 before recovering to approximately 12.5% in the final years. The data suggest sustained profitability with occasional variability possibly due to factors such as tax, interest expenses, or one-off events influencing net results.

Return on equity (ROE)

The return on equity exhibited significant volatility throughout the periods. Starting at 21.22% in 2014, it peaked at 33.54% in 2015, then dipped sharply to 17.41% in 2017, followed by a recovery to 28.01% in 2019. These fluctuations indicate varying effectiveness in generating profits from shareholders' equity, possibly related to changes in profit levels, leverage, or equity structure.

Return on assets (ROA)

Return on assets experienced notable fluctuations as well. It increased from 8.88% in 2014 to 12.27% in 2015, then declined to around 7.5% in the 2016-2017 period, before rising again to reach 11.25% in 2019. This pattern suggests changes in asset utilization efficiency impacting the company’s ability to generate earnings from its asset base over time.

The financial data indicates notable variations in both gross profit and net sales over the six-year period ending September 30, 2019.

Net Sales Trends

Net sales showed a declining trajectory from 2014 to 2016, falling from approximately 24,537 million USD in 2014 to 14,522 million USD in 2016. Following this decline, sales began to recover modestly in 2017 and continued an upward trend through 2019, reaching 18,372 million USD. Despite this recovery, the 2019 net sales figure remained below the 2014 level, indicating the company did not fully regain its earlier sales volume.

Gross Profit Trends

Gross profit followed a similar pattern to net sales, declining sharply from 10,158 million USD in 2014 to 6,262 million USD in 2016, then gradually increasing to 7,815 million USD by 2019. The recovery in gross profit after 2016 was less pronounced than the decrease seen in the earlier years.

Gross Profit Margin Analysis

The gross profit margin demonstrated relative stability throughout the period, fluctuating between approximately 40.57% and 43.12%. It declined slightly from 41.4% in 2014 to 40.57% in 2015, then rose to a peak of 43.12% in 2016 despite the fall in absolute gross profit and net sales during that year. Thereafter, margins experienced minor fluctuations, settling at around 42.54% in 2019. This indicates some efficiency or pricing improvements offsetting the drop in sales volume during the mid-period.

In summary, the company experienced a significant reduction in both net sales and gross profit from 2014 through 2016, followed by a steady but incomplete recovery through 2019. The gross profit margin remained relatively consistent, suggesting maintained cost controls and pricing strategies despite fluctuations in sales and profit levels.

Earnings from continuing operations before interest and income taxes

The earnings experienced fluctuations over the analyzed periods. Beginning at 3,542 million USD in 2014, there was a notable increase to 4,332 million USD in 2015, indicating a strong growth phase. However, this was followed by a sharp decline to 2,504 million USD in 2016, after which the earnings stabilized somewhat, remaining near the 2,500 to 3,000 million USD range through 2019. The values showed a slight upward trend from 2017 onwards, reaching 3,033 million USD by 2019.

Net sales

Net sales showed a declining trend initially, dropping significantly from 24,537 million USD in 2014 to 14,522 million USD in 2016. Starting from 2017, net sales demonstrated a recovery with steady growth, rising from 15,264 million USD to 18,372 million USD by 2019. Despite this rebound, the sales figures in 2019 had not returned to the initial levels observed in 2014.

Operating profit margin

The operating profit margin exhibited volatility during the period. It increased from 14.44% in 2014 to a peak of 19.42% in 2015, signaling enhanced operational efficiency amidst higher earnings. This was followed by a decrease to 17.24% in 2016, and a continued moderate decline to 16.23% in 2018. In 2019, there was a slight improvement to 16.51%. Overall, the margin fluctuated but remained above the 14% mark throughout the period, implying a relatively stable profitability profile despite sales and earnings variations.

The financial data reveals various trends in earnings, sales, and profitability over the six-year period analyzed.

Net Earnings Common Stockholders

Net earnings exhibited fluctuations from 2014 to 2019. After an increase from 2147 million USD in 2014 to a peak of 2710 million USD in 2015, earnings declined sharply to 1635 million USD in 2016 and further to 1518 million USD in 2017. This was followed by a recovery in subsequent years, reaching 2203 million USD in 2018 and slightly increasing to 2306 million USD in 2019. This pattern indicates an initial growth, a mid-period downturn, and a modest recovery toward the end of the period.

Net Sales

Net sales demonstrated a generally declining trend in the first three years, dropping from 24,537 million USD in 2014 to 14,522 million USD in 2016. After this decline, sales began to recover moderately, increasing to 15,264 million USD in 2017, then more significantly to 17,408 million USD in 2018 and 18,372 million USD in 2019. Despite this recovery, sales in 2019 remained below the initial 2014 level, indicating partial restoration of revenue generation capacity.

Net Profit Margin

The net profit margin showed variability but maintained a generally stable range with some improvements over time. Starting at 8.75% in 2014, the margin increased notably to 12.15% in 2015, then slightly decreased to 11.26% in 2016 and further to 9.94% in 2017. From 2018 onward, the margin improved again, peaking at 12.66% in 2018 and slightly retreating to 12.55% in 2019. This indicates improved profitability relative to sales after the mid-period dip.

Overall, the data suggests that the company faced challenges in both earnings and sales up to 2017 but demonstrated a recovery trend thereafter, with profitability margins remaining relatively stable and improving in the latter years. The fluctuations in net earnings and sales indicate potential operational or market pressures in the middle years, while the recovery phase shows some degree of resilience.

The financial data over the six-year period reveals notable fluctuations in profitability and equity levels. Net earnings attributable to common stockholders experienced variability, with a peak in 2015 followed by a significant drop in 2016 and 2017, before recovering again in the subsequent years.

Net earnings common stockholders (US$ in millions)

The net earnings increased from 2,147 million in 2014 to a high of 2,710 million in 2015, representing strong growth. However, earnings dropped sharply in 2016 to 1,635 million and remained depressed in 2017 at 1,518 million. From 2018 onwards, earnings rebounded to 2,203 million and further increased slightly to 2,306 million in 2019, approaching earlier peak levels.

Common stockholders’ equity (US$ in millions)

Stockholders’ equity displayed a declining trend initially, decreasing from 10,119 million in 2014 to 7,568 million by 2016. A partial recovery was observed in 2017 and 2018, reaching 8,947 million, before another decline in 2019 to 8,233 million. This pattern suggests challenges in sustaining equity growth over the period.

Return on Equity (ROE) %

ROE showed a highly variable pattern, starting at 21.22% in 2014 and peaking dramatically at 33.54% in 2015, reflecting strong profitability relative to equity. However, ROE decreased to 21.6% in 2016 and dropped further to 17.41% in 2017. It improved again sharply in 2018 to 24.62% and rose to 28.01% in 2019, indicating a recovery in operational efficiency and returns.

Overall, the data indicates that profitability and returns on equity were highest around 2015 but were followed by a challenging period until 2017. Subsequent years saw improvements in both earnings and ROE, although equity levels remained somewhat volatile with an overall downward trend from 2014 to 2019. These trends suggest periods of operational or market challenges impacting earnings and equity, with signs of recovery in the later years analyzed.

The financial data reveals several notable trends over the six-year period ending in 2019.

Net Earnings

Net earnings available to common stockholders show volatility throughout the period. Starting at 2,147 million US dollars in 2014, earnings peaked in 2015 at 2,710 million before declining sharply in 2016 and 2017 to 1,635 million and 1,518 million respectively. A recovery is observed in 2018 and 2019, with net earnings rising to 2,203 million and 2,306 million, demonstrating a return to growth after a two-year slump.

Total Assets

Total assets exhibit a downward trend from 2014 to 2017, decreasing from 24,177 million US dollars to 19,589 million. This decline suggests asset reduction or divestment during this timeframe. Slight increases in total assets occur in 2018 and 2019, reaching 20,497 million, possibly indicating stabilization or modest growth in asset base after prior reductions.

Return on Assets (ROA)

The ROA percentage follows a pattern consistent with net earnings trends. Starting at 8.88% in 2014, ROA improves sharply in 2015 to 12.27%, reflecting efficient asset utilization. Subsequently, ROA decreases in 2016 and 2017 to 7.52% and 7.75%, mirroring earnings declines despite decreasing asset base. In 2018 and 2019, ROA rebounds to 10.8% and 11.25%, indicating improved profitability relative to assets and a recovery in operational performance.

Overall, the data indicates an initial period of strong profitability in 2015 followed by a downturn in earnings and efficiency, with a recovery developing in the later years. The reduction in total assets until 2017 may have impacted earnings generation capacity, while improvements in 2018 and 2019 suggest positive strategic adjustments or market conditions enhancing financial performance.