Emerson Electric Co. (NYSE:EMR)

The financial data over the six-year period reveals several notable trends in key earnings metrics. There is a general pattern of volatility followed by recovery and growth in earnings figures, with some fluctuations observed in the middle years.

Net Earnings Common Stockholders

Net earnings increased from $2,147 million in 2014 to a peak of $2,710 million in 2015. However, there was a sharp decline in the subsequent two years, dropping to $1,635 million in 2016 and further to $1,518 million in 2017, indicating challenges during this timeframe. After this downturn, net earnings rebounded strongly, rising to $2,203 million in 2018 and continuing up to $2,306 million in 2019, suggesting a recovery and improved profitability.

Earnings Before Tax (EBT)

EBT followed a similar trend to net earnings, increasing from $3,348 million in 2014 to $4,161 million in 2015. The figure then decreased substantially to $2,316 million in 2016, remaining relatively flat at $2,335 million in 2017. From 2017 onward, there was a consistent upward movement to $2,667 million in 2018 and $2,859 million in 2019, reflecting an overall recovery in earnings before tax.

Earnings Before Interest and Tax (EBIT)

EBIT mirrored EBT trends closely, with a growth from $3,566 million in 2014 to $4,361 million in 2015. This was followed by a pronounced decline to $2,531 million in 2016 and a marginal increase to $2,536 million in 2017. EBIT then rose steadily to $2,869 million in 2018 and further to $3,060 million in 2019, indicating operational improvements and better earnings capacity prior to interest and tax deductions.

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)

EBITDA demonstrates similar movement patterns but exhibits less volatility compared to other earnings metrics. Starting at $4,397 million in 2014, EBITDA increased substantially to $5,176 million in 2015. It then dropped to $3,099 million in 2016 but showed stability with a slight increase to $3,172 million in 2017. Afterward, EBITDA grew steadily to $3,627 million in 2018 and $3,882 million in 2019, suggesting improvements in core operational performance and cash-generating ability.

Overall, the data indicates that the company experienced a peak in earnings in 2015, followed by a challenging period with significant decreases through 2016 and 2017. However, from 2018 onward, all earnings metrics showed a clear recovery trend, with consistent growth in net earnings, EBT, EBIT, and EBITDA. The fluctuations in these financial items suggest sensitivity to external or internal factors during the mid-period, but the subsequent recovery demonstrates resilience and strengthening operational performance towards the end of the period analyzed.

Enterprise value (EV)

The enterprise value exhibited significant fluctuations over the observed periods. Initially, there was a notable decline from 47,420 million USD in 2014 to 36,569 million USD in 2015. Following this decrease, the value gradually increased, reaching 48,778 million USD by 2019, surpassing the initial value observed in 2014.

Earnings before interest, tax, depreciation and amortization (EBITDA)

EBITDA displayed considerable variability throughout the period. After starting at 4,397 million USD in 2014, it peaked at 5,176 million USD in 2015 but then sharply declined to 3,099 million USD in 2016. From that low point, EBITDA recovered progressively, achieving 3,882 million USD in 2019, which remains below the peak in 2015.

EV/EBITDA ratio

The EV/EBITDA ratio saw an initial decrease from 10.78 in 2014 to 7.07 in 2015, reflecting the combination of reduced enterprise value and increased EBITDA during that year. However, from 2016 onward, the ratio increased steadily to values above 12, stabilizing around 12.5 by 2019. This upward trend suggests that despite EBITDA's partial recovery, the enterprise value grew at a faster rate, resulting in higher valuation multiples over time.