Analyst Note| Joshua Aguilar |
Nothing in wide-moat-rated Emerson’s fiscal third-quarter results materially alters our long-term view of the firm. Emerson hit sales of $4,697 million (up 20% year over year on a reported basis, or about 15% organic) versus our expectations of $4,666 million. Further, GAAP EPS came in at $1.04 versus our expectations of $1.06. Nonetheless, management had enough confidence to raise guidance based on year-to-date performance, order strength, and projects in the pipeline (with backlog rising to $5.5 billion, up 17% year to date). While were correct in penciling in a full-year adjusted EPS projection above management’s May guidance (we believed there was conservatism due to concerns about supply chain-related headwinds), we still fell short of the midpoint of the increased guidance by about $0.07.