Emerson Earnings Analysis: A Sign of China Improvement Overall?

"We're starting to see the improvement relative to orders coming out of China."

Emerson’s FY1Q revenue missed consensus estimates, and Amenity’s NLP analysis scored the overall earnings call at -4, down from +24 last quarter (scale -100 to +100). But looking beyond the numbers tells a different story, including a clear uptick on China, and a positive skew in forward-looking commentary. This also follows Industrial sector resilience (excluding Auto) that has been apparent in the Amenity Forecast Index this earnings season.

Please note: This in no way represents investment advice. All transcript text provided by S&P Global Market Intelligence.

Did the Real Economy Beat the Trade War Reality Show to the Punch?

Amenity’s NLP analysis of Emerson’s FY1Q earnings call highlights the following key themes. To find the relevant China commentary for your universe, log into the Amenity Viewer or join our Beta program for access.

1. The China uptick
  • Emerson (2/5/19):

"We’re starting to see the improvement relative to orders coming out of China. Product is starting to sell-through. The channel is being cleansed, and we’re also starting to see government centers go in around the products that we sell and serve into that China marketplace. The government understands that they pulled back and they understand they probably went too far and now they are going to start investing in certain segments,which are good for us especially around heating, cooling and environmental areas."

"We’re starting to see this trend line move up. You can see the start on the commercial, residential Asia number, see it trending upwards."

Although Emerson made the clearest uptick call on China, the Amenity Analytics Query Insights feature shows more balanced commentary across Industrials over the last week:

Query Insights Results for "China"

2. Forward-looking commentary upbeat

As shown below, Amenity’s NLP analysis showed a significant positive skew in forward-looking commentary on the FY1Q call, compared to a more balanced view last quarter:

Guidance: Quarterly Trend

Lastly, a closer look at our platform's earnings call extractions shows additional detail on the positive commentary:

Guidance Extractions

Join the Amenity Viewer Beta Program today to analyze earnings call transcriptions and enable you to spot outliers, identify critical insights, and understand key drivers.

Transcript text provided by S&P Global Market Intelligence.

Copyright ©2019. All rights reserved.

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