Emerson Electric has raised its dividend for the last 67 years.
Emerson Electric is on track for long-term growth
Lee Samaha (Emerson Electric): Management’s plans to transform the company and refocus on automation and associated markets appear to be progressing well. The integration of automated test & measurement company NI (closed in October) is ahead of plan. Moreover, management raised its full-year 2024 sales and earnings guidance on its first quarter earnings call in February.
After completing a deal to contribute its industrial software business and $6 billion in cash, Emerson Electric now owns a majority 55% stake in industrial software company AspenTech. The deal was completed in 2022, as was the agreement to sell a majority stake in its climate technologies business in 2022. nt These moves were part of management’s aim to focus on its core automation business (industrial software powers automation) and the next step was taken by the $8.2 billion acquisition of NI. The acquired company’s automated test & measurement solutions help customers (notably in semiconductors, consumer electronics, and automotives) to reduce development times for new electronics and also cut costs.
The good news from the first quarter earnings is management believes it will achieve $185 million in cost synergies from NI by the end of the third year, compared to the original estimation of $165 million by the fifth year. Moreover, there are signs of improvement in the semiconductor and consumer electronics markets.
Meanwhile, while there are signs of weakness in automation spending in China, Emerson Electric’s exposure to markets like LNG,life sciences, metals, energy, and mining stands it in good stead in 2024.
