Q2 2024 Emerson Electric Co Earnings Call Transcript
Key Points
- Strong operating performance with underlying sales growth of 8% and operations leverage at 54%, leading to a 140 basis point expansion in EBITDA to 26%.
- Achieved 25% EPS growth and 32% free cash flow growth, with raised outlook for the year based on robust first half performance.
- Successful integration and accelerated cost-out activities in the NI team, leading to $100 million of synergies in 2024, up from the initial $80 million expectation.
- Appointment of experienced CFO for AspenTech and the election of a new board member, enhancing leadership and governance.
- Continued strength in process and hybrid markets, with favorable demand environment and significant project wins in energy transition and decarbonization.
- Softness in transportation and semiconductor demand due to constrained CapEx environment, impacting discrete automation orders.
- Delayed recovery in Test & Measurement orders, now expected in the first half of 2025, indicating ongoing challenges in this segment.
- AspenTech's latest guidance revision slightly impacted Emerson's financial projections, necessitating adjustments to the full year guidance.
- Potential risks associated with the integration of large acquisitions and achieving the projected synergies.
- Uncertainties in global economic conditions that could affect customer spending and investment in Emerson's key markets.
Good day, and welcome to the Emerson Second Quarter 2024 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to our host, Colleen Mettler, Vice President of Investor Relations at Emerson. Please go ahead.
Good morning, and thank you for joining us for Emerson's Second Quarter 2024 Earnings Conference Call. This morning, I am joined by: President and Chief Executive Officer, Lal Karsanbhai; Chief Financial Officer, Mike Baughman; and Chief Operating Officer, Ram Krishnan. As always, I encourage everyone to follow along with the slide presentation, which is available on our website.
Please join me on Slide 2. This presentation may include forward-looking statements, which contain a degree of business risk and uncertainty. Please take time to read the safe harbor statement and note on the non-GAAP measures.
I will now pass the call over to Emerson's President and CEO, Lal Karsanbhai, for his opening
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