Emerson FY 3Q17 Earnings Call Notes

David N. Farr – Emerson Electric Co.

Global demand conditions strengthened

“Global demand conditions strengthened versus the second quarter. Emerging markets were up low single digits and mature markets grew mid-single digits. Growth was supported by improving end markets in the U.S. and Asia and early signs of improving demand conditions in Canada. Growth in Asia accelerated during the quarter, led by China. Excluding China, the rest of the region also improved, growing at low single digits in the quarter.”

We have a lot of markets going our way

“we’re still seeing a very good performance relative to the fixed investments around the U.S., around Western Europe, around China, Asia. We’re seeing some improvement from Middle East. If you remember the last call, I was somewhat concerned about the Middle East, but that’s turning right now. Investments are starting to happen. And maybe, and I mean maybe, Mexico might actually start growing again, and so that will be good to see if they get some money freed up. So we have a lot of markets going our way at this point in time.”

Steel pricing still very manageable

“Steel pricing has been a little bit more negative from the standpoint, but still very manageable at this point in time. I think it’s going to take us one more quarter to settle it out as we get into fiscal 2018 it will be a little bit better. But as you’ve been hearing on the calls, it’s been a little bit tougher out there this year relative to price cost. But fortunately, we have a pretty good process. We got ahead of it and Bob’s team was able to offset it with incremental margins relative to the price cost this quarter. And it’s just – it’s a little bit more challenging now than what it was, but still very manageable.”