Emerson Electric (EMR) 2 May 182018 Q2 Earnings call transcript

Company Profile

Participants

Tim Reeves	Emerson Electric Co.
David N. Farr	Emerson Electric Co.
Jeffrey Todd Sprague	Vertical Research Partners LLC
Scott Davis	Melius Research LLC
Steven Winoker	UBS Securities LLC
Charles Stephen Tusa	JPMorgan Securities LLC
Robert Paul McCarthy	Stifel, Nicolaus & Co., Inc.
Julian Mitchell	Barclays Capital, Inc.
Gautam Khanna	Cowen & Co. LLC
Deane Dray	RBC Capital Markets LLC
Rich M. Kwas	Wells Fargo Securities LLC
Simon Toennessen	Joh. Berenberg, Gossler & Co. KG (United Kingdom)
Joe Ritchie	Goldman Sachs & Co. LLC
Andrew Kaplowitz	Citigroup Global Markets, Inc.

Call transcript

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Emerson's Second Quarter 2018 Earnings Conference Call.

Following the presentation, the conference will be open for questions. This conference is being recorded today, May 1, 2018. to outlook may the for responses including forward-looking year. and company's the the commentary your contain questions statements Emerson's remainder of materially Annual Report Information results Form XX-K, is could that with on at from the filed vary SEC. available recent on today those most cause Emerson's as discussed factors to actual Director to at Emerson. Relations like now over would Investor the conference to of our I turn host Tim Reeves, Please go ahead, sir.

Tim Reeves

XX% today available Senior strong. Thank with Officer; quarter. in to growth the conditions quarter to by Vice I Controls, you, across on $X.XX. joined the base margins. XXX XX% David XX% consistent Executive In to excluding in Valves Financial Underlying remain through Dellaquila, of am our business, neutral and & cost trended all have quarter were the favorable both Price and that XXXX on slide Chief we website. orders year. continues will and range our world were and favorable The points China increased up start quarter X% Chairman on and Profitability growth GAAP trends of slide quarter. EBIT increased EPS first continue be Demand remained summary. underlying up and results. X% was Frank call The incremental X margin the basis areas. solid and summarize Executive led with with in second across business expect U.S. the to sales Farr, President Chief Today's accompanying Denise. strong Officer. is presentation Sales I'll the platforms. second second billion our $X.X Emerson's

than quarter the shares. we've the shareholders wraps through Emerson. QX, X.X strong million shares. up QX first million overall, few returned half operationally over a both almost had to we XX.X to months continue anticipated ago. And buy we back a and was And dividends repurchases. billion stronger and shares In share first half $X.X We repurchased repurchased for in

Turning to X. slide

excluding gross up Valves points points. quarter Second EBIT first was points, margin EBIT and XXX margin cost A basis was Controls around benefits year. impact expect prior-period up basis a in cost half, half full approximately margin basis operating on up profitability. leverage, efforts. driven in execution first the Controls reduction points was & continue & we Valves note restructuring Price flat XXX excluding half our from quick and XX margin first basis ongoing price by was In the gross up the the and cost normal and actions was neutral to XXX

business Turning now continued the sales order are China, favorable deliver both platforms. expect but first X%. were favorable the trends first to the the Emerson led in led few in In markets America. digits here were up Emerging From slide quarters high-single here quarter were flat over which across second digits geographic QX trends areas. and in momentum in a the Mature with solid broad-based past growth robust the demand seen quarter total North Europe high-single half, world by X. half. growth by second was half, up markets and to second continued perspective, the up we've the and in underlying across we

conversion second margin points in has higher basis strong cash across in up the margins resulted basis half. segment XXX was to was free XXX up again the Turning excluding & Valves we businesses The in acceleration Valves Controls half, Total in capital our slide levels and modestly segment working first X. the & of expect flow And points Controls. excluding growth QX.

end-markets petrochemical demand and up Solutions Strength XX% chemicals Favorable in led markets and continued oil chem and the and turnaround first and with supported by Automation was slide MRO, underlying and strong discrete North activity. to sales trends in half. by projects process, quarter X. XX% driven by specialty were China. were Demand Turning the hybrid across projects. midsized in and America and in gas small upgrade optimization

seen leverage business points Our benefit in half, and of Greenfield Valves steep decline plant & in power strong prior-period was orders whose points, by up a was global markets Improvement grew sales was XXX up margin retrofit Solutions Controls. driven excluding have Automation restructuring and reflecting first XX the net and activity. investment basis operational participation actions. the basis segment and

Control Valves Final key to broader very and hit Controls Final quickly plans the improvement business. margin business Controls are continues track read integrating with through. into team seeing we and Our synergy With & Control & the we is milestones the on Valves are

demand Turning demand slowed slide weather grew broader while in for of Residential half. inventory Solutions. and continued reflected due Commercial the In X% the in America strong X% in Underlying and air-conditioning quarter now tools, to in Growth and channel & Asia, markets. timing North demand air-conditioning to professional X, stocking. and in first sales cooler strong refrigeration China

of on we ClosetMaid However, material in positive mix XXXX. was aided price restructuring and higher markets points by expect air-conditioning of inflation realization and the actions, October the the economics XX second and operational sold business as growth was underlying leverage, basis the of half. solid by and divestiture the remains prior-period for Margin which partially decreased benefit offset

the slide that which the to & recently note outlines Tools acquisition. framework include Let's not announced this now our updated full-year Test turn impact Please does of X, guidance.

update and which is the provide will close We expected transaction fourth fiscal guidance after the in the quarter.

the high The prior expected with turn of XX, offset XX%. is Solutions efforts. cost previous now, reduction X% effective Solutions up as grow & the to impact me material We a range Residential with XX% I Commercial XXXX X% the Farr. at and with over price inflation up call to range continue X%. EPS And the expect to and of rate GAAP slide The midpoint Mr. XX% to guidance This compared increased assumes is of realization $X.XX and price end growth Automation for underlying Emerson $X.XX guidance tax will range a hand year. please new the or cost David to we with to total neutral XX% sales to to at $X.XX

David N. Farr

and the from our Emerson. principles integrated Thank before Cooper-Atkins, talk We much, bat given it. with I the I baseball for Tim's on year. new strong Controls that very the have very of Paradigm all monkey Tim. want all, Stan around of quickly the the new first a shareholder quarter he world, Musial who welcome me bat the a to bats acquisitions new a about figured luck. our let slide, very rally half a the breaking people I my brunt as been you fiscal I very them. new bat today core I thank with want and of across other those also I including & had for Emerson the thank a to to I brand Musial taking quarter, of and you tremendous But handle baseball and do a the good a have everybody keeps to needed while from understand the Valves holding first appreciate and a and And, autograph know I Emerson want that people Stan they've And to longtime also I friend a want everybody. for strong

here this these many the Greenlee but and to have to I are on chart back that Tools & two Test, for acquisition, tool you for wasn't Klauke wanted to years. many, unique Now, acquire understand brands we've many,

people These along an and our area of these might one know, used As not but the acquisition, And here taking two time and brands making with acquisitions. Ridge acquisition, we of assets value there. ran I very and Textron this core much at Yeah, like this to capability talk significant stronger brands, you Controls Tool say unique brands it all was powerful unbelievable shareholders. Valves at are like out & there's integration, unique unique see for the and folks about our expensive many these we capability it brands. creating in some to

to other glad emerging be take recognition very brands into a in is around but between assets road. many our seeing strong execution going platforms. the of world brand But we're both it. we this that think I'm it. I'll role this focus growth that's like so strong the not we like able on going was been it our powerful year it work want but around decision and about phone road CEO on when very why creating well. the some about And because a hand, of a unique the I all, half a in Emerson count and be – it not a going businesses that February, be the space, in markets go ago. Klauke, customers, talked as stronger I – is did a what's for in opportunities Milwaukee, in join we also growth talk I – can more can of look of And be really again was really the made our Textron brands I've days, XX made at say first But of it they decision to XXXX Greenlee, little on And second. call And The by it for world a be leverage XXXX. Ridge and years to shareholders. emerging business we of it to in the second it the strong bit You I and really on couple about one there're for and and Tool, opportunities couple the you

some not right this Europe As growth see see really kick emerging in I the that to time point Latin what like is America. emerging market I we growth only unfold good at markets. next of into It's have I kick But strongly, that sporadic quarter one I The Asia, will down. But been Middle now it seen relative Africa, all think quarter opportunities of the East, one world for the the Eastern years. see several of in very up, world and world the strong of I kicked in.

in and then customers Singapore, out the building. as I also project was went is business Middle and Germany Italy, I Philippines, and East, talked As the to the

$X.X around I'm investments. which and XXXX my which other medium-sized been be said key many Clearly, like like and recovery But projects really in but see around really both to rates. projects, emerging rate higher formed businesses and my kicked And are pack opportunities ourselves solidify on As capital like time. growth with the originally. to a growth move the XXXX. the for first get what's East is shoot markets build good around around Cash going executing which now very, drive a in continue of primarily larger world. right our and the very we at China, tad Therefore, very glad to the like right than the the But the that. about receivables point talking in to working yet. couple about they perspective growth from feel on, as this I small, I'm of lines, bit Overall, to the about starting are now from nothing now. we're come has one concern hear good mature bid the leading around and from And have still will we running are deliver good. I of along and in, those is But track a being Middle markets shape starting is many, as versus the We're U.S. we faster the this the the is XXXX. into clearly profitability, separating to we little the perspective, markets our growth XXXX year. on into a India see the as happening billion markets we've flow growth

like a growth As at mentioned bit – plus this I the We and are total Tim around or I slide, mean already we point we where in there. year, little see in minus the had time. at rate look our X% the

of better business, Solutions weather stronger which a construction. some it weather Res right on As sales with good overall, relative from to time, in the like getting $X.XX good this of upside. for it mort of earnings we're this the some any share I has really now underlying the solid shaping to depends range type at point look But solid $X.XX up starting to have year to looks X%, a Automation impact per the in excluding some X%-plus at Commercial and get growth acquisitions. we're pattern,

to but X.X% And you underlying good as somewhere range I'm I'm the you the the in very as giving a you $X.XX looking we We're share. we year, we earnings range. For see third for per growth couple quarter, along growth. – X.X% said, raise telling of a of range X% year we right rates, as or that try guidance pennies, out the the to to X% minus underlying guys now the plus map see at with

good we our continues another we into and to year this Overall, And fourth for the seeing the But of the Another what integration looking we in around obviously a the to execution time. And, Solutions. progression, cycle world fiscal as we're point very in third want move pretty good everybody job. that's we're acquisition-wise, both what strong solid at. good see quarter feel We'll platforms for XXXX. quarter clearly, the thank the I I'll this businesses open quarter. the forward coming and happens up quarter Automation and at another made a as see the questions. But I floor again, good

the up So with for questions. that, I'll open floor

Operator

Thank gentlemen, the will you, now sir. begin answer Ladies session. question-and we and

Your ahead. first of from Sprague question go Please will Vertical Research come Partners. Jeffrey

Jeffrey Todd Sprague

everyone. day, Hello, Dave. Good

David N. Farr

Hello, It's weather. Midwest. here good beautiful you. the to you're hear Good And Jeff. having a hopefully, from in

Jeffrey Todd Sprague

out. has Sun come finally

on I X, finally month a later. May arrived think spring here has

David N. Farr

or a call pre-spring. I I cold it's God, spring, here, been long you a spring wet guess guess it can't

Jeffrey Todd Sprague

cheek I kind is things of ask of people a over this almost tongue that good question is and the lot cycle of out as but kind Hey, saying in get. this as there are there's

David N. Farr

catcall. to listened have must You

You call. must Caterpillar phone have listened to

Jeffrey Todd Sprague

on catcalls call this right? No, Yeah.

David N. Farr

No call. catcalls, this

Jeffrey Todd Sprague

that of from macro that's in activity unfolding longevity the thing a are there And you? about the feel you is of particular front do you how concerned any So about standpoint?

David N. Farr

I mean, the any the about think different been last to over XX don't I is cycle than months. I've X talking

that XXXX for think I a to going year is us. be good

worried about, now, XXXX, the could East know, we better little right invest. wars. need in like of good away we stronger XXXX you have the bit the is depending in But business I've if any The type up Jeff. on the will Because automation this always the relative to at time. and pricing trade space still I talked where very think be see point about or I'm the always has customer worried a staying confrontation from for something to type I any a that. XXXX, about slightly that a take money. finish, always I'm based of commodities Middle they base XXXX but project

and So good organization have feel positive we of been that seeing very about technology & coming we're what across the it. leverage right and a come lot now integration I new of very, And as of and support great Controls out. Emerson The us. has across they've in for timing that Valves

The a optimistic. very year said I Automation I'm I've peaked. stronger XXXX than growth in could that thought have believe I XXXX. still that. So that has Solutions not cycle

Jeffrey Todd Sprague

on the of a a through bit sales. little bit you on point just in effect at now acquisitive other we've on V&C and going And like the V&C. progression there finer Automation, put little Obviously, it's But M&A then Thanks. Could it's of at us gave Paradigm the execution Interesting. like. where ex-V&C the and got margin you quarter, margin point? at just underlying this of the kind where is and

David N. Farr

tell thought are are don't Tim, like him from – some the it would to why strong. that. this where orders it's Tim just I'll numbers but up come up doing would. answer Europe and Ram got answer they let it orders progressing? I'll Tim and because well. talked they're we He he's he thought let extremely progressing here. saw I The But you in

Tim Reeves

in April, excludes and it's to been range closed So we X% that and the on sort of X% the business history amortization. restructuring last the the since

to through And that. so start what the that saw in And quarter up we still did toward of we margins range this in QX double-digit see and first was kind and to expected we track QX. be

QX. high-single up. It's was in So it digits

high we into expect digits QX. double We should digits and single then be those QX,

David N. Farr

having well, definitely standpoint, it's to with was sites were where and getting overall harder standpoint around look indication it's a like, and Well, with making manage the to and to able way, standpoint, visit lot is we to we're it. a and to to big going the you right the you V&C, It's for of a move if an got problems integration profitability tougher it. going. progressing. the it's it's enough getting try to harder but business, give us Paradigm it. But The we're I capital big of But world. enough working mean, at is It's I that be Frank profitability me. from progress. We move I great the sales not moving if going tougher. mean Automation now

And so spend with we time got some them. to

the So in slot we're the business there picked and Jeff, has think right I now up. back

timing is one. pretty So our good in this

Jeffrey Todd Sprague

solid, lot. a Very Thanks it. Great. appreciate

David N. Farr

All the very Jeff. best you much. you, to Thank

Jeffrey Todd Sprague

Yeah. Take care.

Operator

The will go from next Melius Please ahead. be Davis Research. of Scott question

Scott Davis

Hi. Good guys. afternoon,

David N. Farr

today, Good hanging you Where New are afternoon, Where going? out or somewhere? York Scott. you are

Scott Davis

where New Anyways, were... comment. said I hat. But, York. you It's Dave, no hang you my

David N. Farr

There New York. is nothing from I'm New Frank's New with York wrong York. and from

Scott Davis

pay don't Why taxes? you our

David N. Farr

– can't share. Well, I I my pay don't. change I fair

Scott Davis

the of and those that Aren't you more taxes you pay than pay. collect one half states

David N. Farr

you level. handle. pay hard a I for I'm it's there. the tough XX% to cross know that, all one really not It's of when quite us

might state. You tax move to lower want to a

Scott Davis

what but you do I would Dave, much XX% take you. Well, not for I may what of of make XX% make

David N. Farr

Get What is this? live.

Scott Davis

here work a for sec. on focus I'll right. All

David N. Farr

Okay.

focus on this. Let's

Okay.

Scott Davis

there over pretty any your just actually we a orders have were for projects? or turn? seen officially were Do strong. have in your you said sales And You and they money were, the darn Mideast

David N. Farr

months. is The little bit coming. more cautious turning three Yeah. And it's They year late it's or been And have money was last turned. four for I now turned.

in coming you've money money in You having now, They're money even put Africa got We're seeing Saudi, Kuwait. out got in. to North of the money back Africa.

invest revenue, and the gas get back get to to to in. Qatar the have starting oil the seeing them We're For put some and they out. money

KOBX the good. then right KOBX is, very So and yes, answer business and now is our

a the in the years the money that coming, out this very back And into good have projects right that more active upgrading at will I couple putting coming they're trying little the of and be then So bit down and from and but productivity. point are bigger time. repairing road, think get again to And I think, here, we now. bidding,

Scott Davis

things story, of market Dave, just positive Okay. was more and that got And, the one us the on utility your Ovation. it

You'd made us but dead a mean side and side Is cycle, I behind it for there that upgrade market's some give utility positive comments years. about many, utility, been many legs feels the some real sense, globally? automation an like

David N. Farr

when embedded facilities the in after, that. run their into markets, the they're the plants, productive. marketplace have seeing to in And utility we're what investing there's lot all And you for you the into break capacity with products right but new trying if a of new of at a inside more we now, too. North installed America a good make inside active down it the very also, going given seeing then we're power on project But us lot going very which So our upgrades there. enhancement that's America, look our is not – the capacity There's emerging a PLC, North base markets, capacity. primarily going mature current so U.S. new we're in and and globally, investments of

on right America positive and we orders, now, global North basis. in year as So seeing did last a we're

space. in invest We this have continued to

I new competitors And We our a and me, think – us off. think that have investments. an backing the here necessary continued have that opportunity been they're you giving of product I lot know make And Scott. to

lot And a penetration in last gap other – of for widen – I known I we're we're to drives years couple of I core And You've at a whole spent a – the time. week seize me And the power Pittsburgh how about and at of think was it it's that up the a with around industry. world. I we opportunities. them. same. long And continue feel looking products our the in our next good very day

– drives us. every and valve to from it So good really I for other mean, instrumentation, control businesses a transmitters

I'm So you more than optimistic are.

Scott Davis

I'll Good Good. on. it Dave. luck, pass

David N. Farr

Thanks.

Operator

Steve next of question Winoker Please be from The ahead. UBS. go will

Steven Winoker

afternoon, you? How Hi. Dave. Good are

David N. Farr

Good afternoon, Steve.

Steven Winoker

the great. It's hear you the negativity. cycle. Hopefully, That's good to to your conviction offset

David N. Farr

a three not while been has around This through been I've cycles. ended. I've cycle Period. and

Steven Winoker

Right, I get bat. a brand baseball new

David N. Farr

I'd I'm trying you Now, not it's just to to not ended. talk on anything. or numbers say,

Steven Winoker

Dave, second to little so flow on plus, in I side, there it's maybe in to the the guess, bit $X.X your on billion hitting want hone you your addressed that $X.X in obviously around it comments, conviction billion a cash but billion $X.X I half.

the It's You a related. growth cash just on took tick. bit, guidance down flow little a

You working moves. the got capital

cash You making I any in guys should that number? are risks great aware be we that on of you normally. guess,

David N. Farr

No. I mean, not at all.

conversion will on the we're corporation, I've openly range, If we line we around for going around totally and it, continue based I check. talk about move keep talked think up crossing coming totally, start the that to a X.X%-plus for – to in working up once take it's that to tad rate I the a capital rate us the at tougher as seeing. we're earnings growth what whole took and of have, growth as

say, we commercial September and my deliver from perspective, to rate the is it's the a So little earnings, be the sales. lower, is because going the yet cycle the just timing way cash the to of can the and be hard going

X.X% balance have a I'll If little the more off the capital in when the get the don't I we grew – less the – sheet faster I year about that – puts a feel get convicted whole down we'll growth I So the grow in take growth slow I'll earnings sales, on pressure we'll let's us. flow. for off But cash not – I'm good things a and the bit. lot take – will the working cash say,

off. growth rates to where balance have that the in versus these some of So money right put take we we now Steve, when cusp it's it sheet actually on – we're

about that's I in is we're So flow. mean, line right is little – worry fine we're just now, good. faster, – I which good. It's that a cash wouldn't our but growing cash the

Steven Winoker

Right, a have. good problem to

David N. Farr

you give want? a What more growth. choice. a Give do or less I'll me choice, you cash

Steven Winoker

that. Yeah. Dave know right? both. you I want All Come one,

David N. Farr

want both because a to Do But also I I really business? run want be too. agree, to you I have realistic.

Steven Winoker

Yeah, park out yeah. Well, of pricing you're hitting the versus just right? So it inflation...

David N. Farr

My new bat.

Steven Winoker

less about been inflation, this? ...you've worried Are you that. versus worried worried... Pricing about been you've

David N. Farr

don't about I worry them.

Steven Winoker

are or going to days you ...these be green?

David N. Farr

years whole the It's they've products issue in this, We're I think material for disruption, pricing the around having this I we're think of down. The having for four part prices that the years, flat. of around prices place. probably flat. negative. drifted in inflation for right as steel up, But we a get a flat. putting things out reason back XXXX, to mean, couple always now make it'd the to this have world to trying worry cases, we're we're we about I I or I five now. of all ran Steve do say been we're we're going million all control. the slightly where costs. to pricing, understand have long, this. to the in we now tariffs, because certain trending felt right under and dollars I control. think I right said We're in after tweak little plus sure would waiting bit working. year Because of are under year. I the minus we're there probably action we've then In around around in get position upturn now we're than more double it be We're that about moving

pretty quickly. now so we're moving And

under it's mean, worried control, start That knock-on we're out all a I right we sudden there. in And problems of But So to not But under I that a kind of seeing minus couple tariffs effect I'm cause be going of us but come for on this world. honest. wildcard I it's think in or a to now, the of we worried control. about it. plus there's industrial a all and about, could tariffs. got dollars. million too be wildcard

Steven Winoker

All I'll it on. right. questions. hand my That's two

David N. Farr

to best you, the Steve. All

my care take You friend.

Steven Winoker

You too. Yeah, you too.

Operator

question ahead. next of be from go will Tusa The JPMorgan. Please Steve

Charles Stephen Tusa

Hi, afternoon. Good guys.

David N. Farr

Tusa. monkey I've be here, so got my mean don't rally

Charles Stephen Tusa

it, I'm not. be see mean. it just not. I'm Dave. I not. call I'm as I'm just not. of not as I'm try not guy it. calling and I I'm kind to always see going that I

David N. Farr

about a thinking to getting you I'm dog Well, keeping new just bay. at

Charles Stephen Tusa

to power just you big taking clear market about share... be base So you're commentary, talked that I installed on the mean share. of market

David N. Farr

I walked didn't have didn't yeah. marketplace. think – people away pretty market the well, share. I taking said, I I say I from say doing we're but think

Charles Stephen Tusa

I controls if mean taking you something presence a away of not is in Rockwell walking OEM are from you're obviously, that like Well, has are of it's they're business, U.S. means especially necessarily winning marketplace and related. share. – that this the in my And the guys I mean, kind huge the understanding that most

meeting So the gen. seen North the that OEM your from legacy some guys of coming Is America, would like assume the the share assumption? with from power that's at we've channel are at least that correct in what I in gains here controllers

David N. Farr

Yeah, that the that. aisle out are after is there into correct power thing out automation the assumption. so plants other there we're But and and going

We into so it's been of more a And security parts here. system. play a lot skid. we're have PLC-type XXX, now to a embed OCC structure cyber power our We're control and able a up plant and our to have bringing which we hook where

offering. are broader been product that power places from lot just system And companies a have positioning there's a we've So ourselves the much investing. being to a control

plants go that. we in. serve companies power our therefore, going organization – still power in away plants. to global actually backing investing power can these are seeing So you're of on And we're a original a to where lot And basis, out power from

You're seeing power plants.

of You're going plants to enormous five power in, in over the years. amount next see XX Asia going to

So right way. a now, good in North America, we're winning in

Charles Stephen Tusa

up pretty Yeah. in guy climate, that U.S.? in the good It's scenario. I put numbers all control the going what's OEMs. guys the On all to mean, be good on systems these

I the How seen one is of the are Is customer-specific numbers? think a we in haven't channel you of kind this only weather down given quarter. bit timing really the dynamic they comps. quarter dynamics – Goodman explaining reflected there? this your second a of talked kind that kind Is

David N. Farr

of the them a versus system on early new when cycle. heating. ramping and wet more timing. the unit It's Spring the And was cold up A/C a very It production

didn't a we year. like up last so had we more an bit And have ramp early little

timing a So issue I more mean of it's us. for

the As the you know, manufacturers we're here. not always in OEMs, sync with

for some now, the or our not good right housing is we in production year. kind now. good So this be But will markets and function about low-single of some on residential I'm digits piece building it we worried too us going the need right need

I we're down is that – and I to lot tough into of are to still we If will it, in get see that going coming. starting think things May and to get keep a a America. North it then weak on EPG I'm year have

well. business fortunately our business, is going Asia Fortunately, European still our

months over North – well. refrigeration markets, those client markets been one the But has market other has going market, – last couple America A/C. the Fortunately the the our of the our been weak other are that

pop here see in and in. we'll this dry right before too come see it. what that's not Steve. about hopefully now. so little a concerned and And orders some weather we'll had heat see a We've I'm But little we

You know that.

Charles Stephen Tusa

Right.

I you guess. care. See Take Okay. at EPG,

David N. Farr

you much, very Steve. thank at See EPG. you Yeah,

Operator

The next Stifel. McCarthy go be will ahead. Robert question of Please from

Robert Paul McCarthy

Dave. afternoon, Good

David N. Farr

Good Rob. afternoon,

Robert Paul McCarthy

just cycle what give given kind we may the of bit could One kind long prices how go more cycle, beyond years questions. lesson. little of process, and fair we're is you the history underlying to an us could see in was? through oil for could demand? seeing this And what that just of it of early I trough on walk say really what thought mean particularly terms just here, a mid-cycle economy? this Two Just a underlying several for go in be you

David N. Farr

far have right little people very and can I my to was there's and that in been already the about for I some that from levels they're think a business way big, going expand But went mean, have perspective about areas as a It does they the visibility the are this good. to out and bit The stay and got the some for right to XXXX. good one is key the a think good at to there It is least in like see see demand say now? the to production I've out point into is, and new are does starting this like And gas cautious high years, in year. But around hard troughed the as if invest know, very, be much – going to are good a at committing and that. for is price large had We solid world see of I of with oil now to solid very area different the in Rob. why globally time cautious two had the stay three how right years pretty years spending bit, I it And finds I you four run. like incrementalize people that's already for adding core and for a form. capital peaked So back. they wells cut But it we they're have and back things go them So hard can on think projects is beyond pretty several underinvestment two and and of it XXXX from cycle at several, price It XXXX. being here thing as And What's okay, as the more the to to because money dropped we point third try without I new three question it's little the I years. But solid going mid/early very going cycle that's put a see is me being people energy? that. time. a to I big in more that – now, the may in break then good what And years. it. there all energy going it's

cycle projects the out that build see these large the is more gives world around So as indication to starting little to go where a bit me I going to.

projects of So better year out to coming up. and and we as easier I on I have we'll execute calendar at what the bigger they're the business this out are us. year right like It's they good the ones look us because and small see towards know the profitability. and now, But typically I get this and more end project see, I shaping as for at about medium it's going bigger

Robert Paul McCarthy

could synergies Valves what Pentair's On could were intended when a revenue Kingdom hands? capital has and & there? the how world into integration? trajectory and integration that opportunity sweetener is just talk further was then on under-penetrated specific what of back particularly be the things? others there about Controls, the or the One in trade and under-indexed progress perhaps the as the to And from is cash note, the And working getting the you been some two trajectory potential with of it the in and where the you kind

David N. Farr

We're would the that. working on integration always up. job had good right the exit. deep doing good And about this say this very a knew we we I Final process with out team team, start integration. of before we've and much organizations going now The of process going done. its of this in to one we then faster I of than coming exiting to and tougher in acceptance had of and & and Valves It's and to happening. that's that been of said think capital very Automation The and his extremely we'll the mean, business Ram February, hiring Relative as Automation work I feel doing we're some in And cost jointly going project working Hopefully, getting end business sales get us done to getting quarter. Controls And right we the it capital anticipated. in money. the going business is had Europe, we're the together. in the to together. we've pleasant places and getting actually relative it people where of that well We're this Ram's integration challenges, a well. is which of we're cleaning they're is is Control working before maybe Pentair surprises the the our couple of we've the year now, business, fiscal but

their this going we're So seriously growth on lot have I thought. of Final to think more have we bit little a that that's maybe year Control think a be a the to Aramco, have mode the and to go co-selling all and the all tied on synergies. to and the we've they they has off get hard facilities. visit – to pause would going growth this of thought better than of a sign been extremely working Kingdom facilities have I I Relative I Aramco the and business to – the to out the been around credit And –

and And CEO up I they've have next because They clean Aramco week. like the that. we're asked facility getting visited do of at now to to to try much us going progress the I'm look anything pretty with As meet to down every now.

bids. we're to So get starting

an a is is think out. I more at to little we're which getting pretty see XXXX, bit in slow because historically So again on that impact Aramco going back of faster

positively to very the growth perspective rate which his So of in around see with and orders, world. whole underlying costs, team on I'm is integration working that. on pleased great surprised net-net, great the capital, Ram but the from pleasantly

Robert Paul McCarthy

you for EPG. See the answer. Thanks at

David N. Farr

you. you. Thank See

Operator

The question go Please will ahead. be of Julian next from Mitchell Barclays.

Julian Mitchell

Hi, good afternoon.

David N. Farr

are How Julian. afternoon, Good doing? you

Julian Mitchell

that while. many in just data months. soft there a Very better a of question looked asset sluggish good. on Thank have fixed a Europe. XX terms for The been you Maybe lot first for Yeah, you. and others investment for

your that's to started in own of pretty sluggish still. orders terms example numbers slow are Automation Now in for in

I So in be going do there maybe or recovery Europe, will fixed pushed a out. wondered, to you still is still think that just investment are believe asset you're

David N. Farr

see feel winning in X% feel on. I this I that we very the I strong took growth It going while. I projects. Europe year, will underlying this see sales very year. the growth a strongly. Julian, deliver

well a in line the we've sides, – the European projects. were that. on res commercial doing for about they're and that this. think been there Automation doing there pretty with Frank We They're review. was and pretty We had talking we were and me The I we well and well. see

strong on X% a overall us I the see it back to see Europe Western well and longer to and for underlying that slowing both get for part. some XXXX. believe the the orders longer impact did It half geared that back going XXXX Europe economy, it's we're taking and firmly XXXX I I going bit. numbers it's so agree we growth Eastern to in projects first in the what just coming But rate won are up took don't them for little And They down that and just, think are to up. around Europe. a this, very we gear had it going

happen. to starting the I The investments think is are money starting to flow.

I to Europe, particular good words could meeting I day about back investments out, I at about my to a I sales through are this and world – a it. time. orders start Europe, the struggled that's, in so I going quarter going team with eat it's in this in but think has and and the point And for the after battle think Western industrial but going feel start this feel a with and half, about in good this, on flowing them

Julian Mitchell

still seeing related, that March Understood. example, what's And of mean, of the, quotations I sort think activity? and to the think those would start you're hit latest being guess. your orders rather I when just trying then conversations most to you follow-up When part the is than guess orders strength on you're view larger of projects, the just Automation. in for my I about within rate MRO might that's figure around be the trajectory

David N. Farr

them small/medium-sized in projects we're start the because is Automation to some this bid starting to we're months year, going on is most projects, some XXXX, but pattern. us bookings which booking last our XXXX book we'll of create seeing We'll for us which be projects booked some pattern lose help in happen stable I in having quarter. several feel the business We'll good a coming pretty the the our to quarter. order stronger builds are also win has the Again, but and our start will help sized will build which quarter, still The which third been that order reason this think lumpiness not I being for seeing fourth a good, which the some larger and going in it's start there.

is us in the going and to I a be good business. see I I I quarter. if here the XXXX Automation wins you surprised this – and don't key playing project in other But see feel you're seeing some wouldn't seeing some some start why in in for The thing XXXX that's about role emerging markets spikes orders some

Julian Mitchell

Great. Thank you.

David N. Farr

Take care, Julian.

Operator

Company. next Gautam Khanna question Please & from go The will of Cowen be ahead.

Gautam Khanna

Good afternoon. Thanks. Good quarter. Yes.

David N. Farr

afternoon, to much. Thank very talk Good in row I you get Boy, you. Gautam. two quarters a to

Gautam Khanna

Yeah, yeah. No, all it's good.

fiscal guiding but. XXXX, not you're know I XXXX, fiscal in So

David N. Farr

guiding fiscal not Definitely XXXX.

Gautam Khanna

Right. to But clear. just be

David N. Farr

CEOs talk crazy even two these of quarters than or one of more about kind months. still will I'm two that

Gautam Khanna

But No, are some the that's to lift at & in actually. Controls at right. going presumably mix this with dynamic project activity margins you Valves growing facing have you're Automation. that business. more appreciate XXXX, I obviously

David N. Farr

Yes.

Gautam Khanna

XXs wanted, Automation should the they just mid as mix? margins at expect we transition in to dip the down? Or do can Solutions So incremental we think you stay

Unknown Speaker

(XX:XX)

David N. Farr

very out the range. will going for dots, there this pressure to connection. XX% we're I the put Gautam, which to firmly logic, you be probably just a little, XX%. believe relevant be this I and This connecting XX% closer the margin Doing year, around dots think to are in

we going kicking as what's what that will in. projects because push to will we the XXXX, to down sure challenge is to manage because the And the that's that is the for margin we be the is make And be project then investments incremental going think what I that happen So grow. be of business. have pressure to

the good I'm business some, Some in slowing we'll going investments probably MRO some on. still of have America down. mix will hoping North

maintain going dilution. V&C be the that's double-digit So it to better point going game up we're get so that possible to pressure some that going gain help good feel out margin laid think year to you as the is best in, exactly come we projects as it said, go how XXXX, that. as as margin what to quickly clearly, be still way. we And exit the that's we the the squeeze of progression about getting I we that our with out But we that then was to got going that to XX% that we can I But next XXXX? hard I we feel have. on it But the to there. we improvement figuring a facing be move But pushing we, to start XXXX margin maybe still real about record mix we're have good offset forward.

Gautam Khanna

of next Got year? it. is But north kind of it for still stable XX% incremental,

David N. Farr

Yeah.

it. this on the says Gautam team to Automation the north call, listening Train or XX%. of phone all and For Mike out guys

You have to deliver.

Gautam Khanna

right. Right,

And course. - Of then

David N. Farr

Ignore the Emerson, CEO Gautam. of to talk but

Gautam Khanna

within Latin of know But was if And else Brazil. strength the right. I what to I you could were strength which Right, in maybe holding parse pockets like Are wanted Mexico of to back? still lagging. kind last America? – specifically region is you any Latin getting seeing in I sort going to some wondering, say that of back. thought we and America's was what is one come I

David N. Farr

in down Yeah, Chile we good we Mexico, quarter, Argentina. are. saw last in We actually, progress and

Mexico kicked Brazil in quarter, dropped This off. and

projects. Our and small to Mexican bit struggled some customer business relative has some and projects little a base

Mexico So this us. hurt quarter

So gets much now for starting the Mexico's it a it's be be The Chile, be it to of a doubt again from this I believer to come while until – doing Argentina, I'm held us through back. now, right But election rest going done. I've the Brazil, here to region, it it they gone was one that were they're better.

maybe fourth So if turned markets back region, online marketplace. back growing can to and again, right we'll But last see global emerging growth the say return some that's although the that now, our get quarter up. we of Mexico I'd

into there's larger sync. under it like they down it's other think And it's back see still, will mean, than come the Fortunately, investments all much have I I'd markets we largest. But been because to I them not are there. now.

Gautam Khanna

Thanks Appreciate color. lot, Dave. the a

David N. Farr

you. All Gautam. care, the best Take to

Gautam Khanna

Thank you.

Operator

Dray next Capital will of Markets. question be The ahead. Deane from RBC go Please

Deane Dray

Thank you. Good afternoon, everyone.

David N. Farr

you. Good hear Good Deane. afternoon, from to

Deane Dray

of the Stan Hey, Musial choice and Man. like the Stan bat too. I the

David N. Farr

very known He and I mention a Musial a a friend. I sitting I now. monkey investor long, knows he lot. autographed and bat. here he was And baseball stuff my I with a right nice close won't his is knows also from lot like it from name. him rally He of swinging Stan. love it's time. have is I've And hard He long long, And Stan

appreciate So I that.

Deane Dray

Good to hear.

David N. Farr

today, What can I do for you Deane?

Deane Dray

expand So robust China comments on hopefully, Automation. can on for being you the

the so that. and hear everything often But on your context and markets. across this to where see even We you answer, hear on surprising And hybrid. also given process touch strength is in talk call comment of can the that's discrete strong don't in not you about

some So applications maybe some could? if color, or you maybe

David N. Farr

So the from go we after area worked mid-tier worked natural in to very the the point hard very, customers – sort go the chemical global downturn, downturn, perspective our in we them a after and Chinese at in in to we continue a time. pharmaceutical gas And this are big investing of – seeing area, refining the way area. in the area, the

to standpoint – them power systems, make we're their power we're also selling upgrading area So when the the and from going in they're cleaner.

in a which – penetration. of our are in But China is a Singapore as in on finished the So right industry. on going taking investing is package, and products have you the very some he seeing through investing us that look coming see investing the We're everything area, smaller good. the our but be and this broad marketplace refining lot board, we we're markets to pharmaceutical the And with we're in because are now on across their China Most China. that chemical product their markets and we're markets the winning our of they're is around we the serve in our some in China emerging to have own right some broad-based had to going as they're of players own is projects, and in at become power the the and President reason investments projects, just is a the He see taking – for in instrumentation, job. is they're review strong them. investments the pretty and investments of systems, strong great base Head area, on in marketplace. refining space. on smaller generation Dominic point if the discrete more of total it's is of mid-tier the self-sufficient we starting And continuing it good seeing industries we doing very of time. discrete pharmaceutical, and starting a is a for across are end-customer at new And pharmaceutical to type of chemical trying And in what's product efforts now of

a last in we the both you China grow in you in did when you're XX% So doing something that's in what quarter businesses, quarter. right. know And

Deane Dray

hear. to Good

David N. Farr

pushing of most hard are XX% we've And really us. now have invested very market liking in – strong at right a this see think – our in in China year, to and I because we're likely growth we're we for space now around we've what innovation XX%. XX% looking to year, I'm invested having and really they people, from north being And customers Emerson. about I have this this talked going I being – think good very

start So going time. are here I are for and to zone But in real this point like we're a we good us where in I'm at sure people soon. gunning

Deane Dray

fiscal Got XXXX? for XX% it. that And is

David N. Farr

Correct.

Deane Dray

Got Controls question. the it. just on And Valves follow-up & then, a

get specifics, you target? overall Is You a the a kind will know to addition you it that margin how and I hinted is there in, material coming help that can't a Valves I'd that to Controls? directionally double-digit So And will benefit you lot business? lower of give is & from your by of, but a divestiture be this subtraction? interested business

David N. Farr

more help will It next us year.

that it way. small a business. It put is Let's

You're had and this than about And market and even. line, has in we're it's million $XX – that the in product the in and interested talking and less interested. not one, technology – breaks not the from day it's you're talking we've – been marketplace, size, business

where us nice because a that's we have year, we'll year, when will is, them. is year there. Deane, year, we're start will to – been this help to won't little We us have dilutive this – help actually And the into this it's hoping one the we what But, go probably running more impact done. year working it we've big. of a not couple that And all this it's grow as may more give it's that sell be small. margin, we see see might we I'm very from It's business get when next honestly, on to thought really in going trying help standpoint the a it that and so XXXX, but backwards. bit I very But clears, – growing not overall,

first hard But them and year. year early sign it team right his process. to the first that's and hopefully divestitures next working quarter on or with we small So integration Frank we're of – now. done have right getting all this the good are of the now deal that But

Deane Dray

See you in Great. Sarasota.

David N. Farr

much. you, very you Deane. Thank Thank

Operator

will next be of go Wells ahead. Fargo from Kwas Securities. Please Rich The question

Rich M. Kwas

Hey. Good afternoon, Dave.

David N. Farr

today, you You're doing? St. Where Midwest? are How in Good in Louise the out hanging are Rich. afternoon, you you're today?

Rich M. Kwas

I'm in Baltimore.

David N. Farr

Baltimore.

Rich M. Kwas

in suit, my armor Baltimore, yeah. in Hanging Yeah. so. here, Still wearing

David N. Farr

Yeah.

Rich M. Kwas

referencing from so unlocking cash earlier. on it, Rob's some Question of V&C, question

of couple any multi-year out thoughts where How right in? the over are terms sooner? target dollars But feel And now? pulling timeframe. timing it, in million that around So that was you any a pulling around hundred do you of about kind

David N. Farr

million in I have I Ram right, by this through his and able going I of team. any think our – Rich, goal think of don't don't be on going go mean, I we're $XXX XXXX. faster, I north now a lot right we're because, is, to pressure is think

to think is over year. manufacturing million this $XX which I new important for we're me a to that's their globalized, goal The really me. And concept to for is get get and going regionalized them.

to able be to want I manufacture. So

in don't Asia. now, and ship has the it Our in right product off, the China taken world. They Asia and they manufacture around business

systematic And Frank going force talked goal about And we up first these the I And we'll that's nature the and road, aggressive – that and a working focus to manufacturing years, the million it. on strategy time capital so give for So now guys, of me we're me the I basis. to to mean, we of to is statement, we we're allows which to be just have good going couple getting investments from right and a by bigger about mean, can capital. make that we're in do make located, very is little to but competitive the for cost a the down combined we're manufacturing talking more that from long my getting I mine with capital. it working gold it my is, with working is the okay, localize. in But out million XXXX, $XXX then less get allows feel approach. a in end a – more next – with the guys. this $XXX the of working to innovation for issue now and north located, cost number off And time a to me would get be hard. talking the think I sales Italy, much run the basis new structure was products us, really which with on we're regionally me and

hard that's other very, mantra with innovation. Emerson. accelerate work something inside help at try each to very you And working a so that is know we're innovation, of which We to

me opportunities, with me from just which to just not working exciting and now -they're great I capital, concepts growth something is this so will but And opportunities see. from and be right the for

Rich M. Kwas

Right.

So it even It's regards kind grind though. sounds tail, it capital of with like to just XXXX there's some going out. tail to some opportunity working beyond be

David N. Farr

Ram's down perspective, XXs. Yeah, I I to thinking them From get XX%. about XX%. think that around I low business Rich. to be so think want my reality, running In are they should

Rich M. Kwas

Right.

David N. Farr

this will regional more approach and of take And to take lot going that about – that's manufacturing you time. thinking was dollars but so start But a a when it.

percentage You sales. that of take

if put see I know it's want think they back want the model And why our that of would willing But create with for the these me to so I our in. run working take basis on too. business them. that's I for better to way which I'm to if going value from shareholders I guys, trade margins, can investment, I'm capital this and is But capital, in global I customers going the low XXs a

Rich M. Kwas

with some folding Right. to regards system share And Paradigm; I what's then on at the the read? been whatnot. of interesting returns here then early and OTC it What's early and has some of the – or on expanded and stuff saw software early wallet into that

David N. Farr

changed. has much Not

looking where software projects, one's I XX out. in is on to mean, about are back still come. bigger is this the This where going comment think questions earlier do this going now existing one you they're existing – of months to I of chunks right fields, probably bigger start and those the bigger need they're you projects is, my on they to investing one what investments. at need

investments that's it's of we're small do work. and look really to So location amounts go gear okay, software up, going and let's more new some for What looking on. is at only a

projects for going XXXX underway. last some helpful in about And and say come, still then when be organization to integration And doing and ways talking some we okay. would XXXX but it manage new week, an I bigger session So is teams that want to this get us business. one to gives more time had the we us new

over the is timing good in And we'll So Paradigm, long-term. this the make one good. money

Rich M. Kwas

See few a Thanks. in weeks. Great. Okay. you

David N. Farr

look I at Rick. seeing to much, EPG. very you forward Thanks

David N. Farr

Yes.

Operator

The Please next go ahead. question is from Berenberg. Simon of Toennessen

Simon Toennessen

everyone. Thank Yes. you. afternoon, Good

David N. Farr

afternoon, Good Simon.

Simon Toennessen

is again X%, grew Asia. question is first had China. My mostly you very Asia it which numbers, on Automation in China probably there. But Obviously, strong Solutions seems,

how bit, in you what's talk and in holding that you you can second a panning Asia half? So back ex-China, the see out

David N. Farr

China. half XX% And grew mean, is Our of now. tell between probably but head. business it's our Historically, solid if couldn't right outside not of – and still anywhere the it's a I businesses top it's – digit I it's I important, Asia that my only XX%. mean, around mean, all I China of single at

growth primarily me Simon, business they're numbers half type What's back I'm – holding I is us is sure make the us starting we happen investments for just good yeah initial are to in Australia. had first and – so of So single-digit for – growth. can good not Asia so Southeast grabbing

Australia So they're difficult and starting just time invest. period through gone to had a very

right – are Zealand. So and we're Singapore, weaker markets Asia, Thailand seeing two Malaysia, that's Australia/New Southeast now the

back to moving starting into And expect mature see so a up. I mature a digit, for starting is that we're the more would to is what pick for see market And solid which that's us. us emerging – normal single to

So than Simon. And they're but the half. half us in stronger now second to holding a right there business I back to projects, for the hold very to that's us would I first did starting say And they what's in the going is China see happen. nicely expect

Simon Toennessen

heat it, the color on maybe you're give quarter. development second pumps more And strong a Dave. a C&RS on that how seeing XXXX? question the the us fiscal Can business and Got of for Obviously, in bit China. again you

David N. Farr

The strong. it's heat pretty pump markets

our That record I double-digit straight probably for a Commercial for or will seventh where China eight think or you Residential. on eighth seven nine. I business think we're quarters. that growth us have now good is And have

marketplace. What So the into the versus what's move what I'd the marketplace, and now? call it's starting going gas pump see versus to on heat starting the industrial right to or move to over commercial starting the is into coal we're

the homes marketplace. or wave consumer So has around been first the

potentially the And it's into to starting commercial or the restaurants. into heating industrial applications water where to space hot move space move space. to some and the for industrial starting water Now, where also they're it's some starting we're see

to happen to from water. companies get trying to heating to is the encourage residential away try of or starting the get from to we're market. to So now outside the see warm to away heat And growth oil either we're to government application starting see starting coal,

by solid or hold have that's take growth or these a nine some difficult good we Because comparisons. we're longer clearly And to going So is have really we encouraged China as leave XXXX. quarters will year why bit guys this we're sustained can in hoping we're after this growth so eight little that. this and double-digit for in Asia,

to right our compression and here. the because capabilities we're of that this size electronics And now we're scale our of the only So marketplace drive sizes, one can and broader trying Simon. a do

in well Xuzhou. team far, I'm site couple get some the new doing starting to trying homes of there to just a the products are market to it's happen. the in those a new the We've space, consumer, some and to in away and commercial going do markets. great to this going got individual to which review to his and from job industrial (XX:XX) I'm So, get to hoping is see to well. of June. to the and going be these so a going I'm of and sites going I'm expansion

Simon Toennessen

Thanks a Dave. helpful. Very lot,

David N. Farr

Thank best. you see you All soon. very Simon. Hope much, to the

Operator

The next question go of Joe ahead. Please Goldman will be Ritchie Sachs. from

Joe Ritchie

Hey, good afternoon, guys.

David N. Farr

Joe. afternoon, Good

Joe Ritchie

additional like about side, color then passed I update Any secondly there's of what there pipeline curious projects? were how recently. if was one to you So going great. to process opportunities there. the would CapEx CEOs And today, bit. about any seeing perhaps there internal capital When investment, little Dave, Greenlee-Klauke just M&A reform is obviously curious see any there on was talk be just tax few maybe so a on whether the on acquisition deployment you're got the there Be the side, talk

David N. Farr

Good.

out did capital this I've lot board to we and about on talked I a come the allocation. my as talked about, So

flow have rate Given generation as of get benefit into our us XXXX, tax for the and here. XXXX sheet, we tremendous obviously we cash the given the balance and flexibility

looking From Frank? perspective up get standpoint, share program, going $XXX this to year. our what right towards is it – a capital from billion fiscal So now, at and be spending targeting our year $X repurchase our we're in took million. it we're we up to

think And we're I to ramping that. could investments I slip now, encourage that's trying think that's right in that talked mean, more where It relative our to or up. globalization a increase quarter we at I are no but standpoint. time. I point we're as to two, this earlier,

more we more become capital So faster and to want efficient. to productive invest and

we $X this $X.X couple mean have we $X.X we time, years. So billion, right now, I in firmly Joe next get $X Frank on over we're We At going space. have billion? right we're time? same sitting to year, keep to the do billion. are this doing close acquisitions Where this a the automation couple are that year on I at in this it believe point We have the working in to billion? now opportunities

to frontload this. So we're trying

within them. about a first trying to bolt-on we as the certain done years, As the to three get give of incremental, close us trying done as talked them get couple to acquisitions years, we're work amount possible to acquisitions chance

seeing being GE some the Baker like more are shown company. starting for to opportunities and out opportunities We make business. assets the boards the to we're companies within the We're decision more seeing that And their refocus like situation there. initial see Hughes Textron where

continue And majority so very a on us. say the there acquisitions, think going focused them commercial our now acquisitions automation the they're in right two are space. will to allocation. would still have our in I out bolt-ons and to be in though good even the residential opportunities of We're for good automation best I But the space, we've but opportunities made and be years couple much of

much work talked we as the and I'd it, repurchase. put about bolt-ons As opportunities acquisition just acquisition to like to versus share and incremental the

Joe Ritchie

super my helpful, follow that's guess one Dave. No, on. I

maybe acquisition, to go had I'm Textron Greenlee higher is a and like your I maybe to think what be. you that's to much get specifically, margins going allow need footprint market, or level? channel at optimization now, aren't just curious, your clearly where about they more the be you sustainable it to the some And to the right margins with about when to go you back And If familiarity that asset.

David N. Farr

being mean with company running the to relative now. going and quickly there we're involved just we're evaluate from We And are I'm going I I channel of was. and they is There's feel more the internally investments and right there. It's reason intense se. We need with it just have not standpoint, this some in going no good businesses. Greenlee they I to this, ran channel than better. much couldn't run be run from at. optimize Klauke why into than much our we per think footprint business this necessarily that They which Textron they're need internally leaders it's and standpoint wheelhouse, right I business a the are already be manufacturing. way that optimize to the the optimization an those can should the some better do leverage. what business have our also they not in to and not businesses do think to we're they in to what operational

Joe Ritchie

That makes sense.

David N. Farr

make I'm inside I sure what's have over I worried I that I tune being some think. Frank we That's and because, that better telling what what I'm – in. it to they're here mean, think opportunities worth about just got mean, and but make We've I saying. know you them

Joe Ritchie

Makes Dave. sense. Thanks,

David N. Farr

Thank you very Joe. much,

Operator

go from will be The Andrew Citi. next Please Kaplowitz of ahead. question

Andrew Kaplowitz

Appreciate running Good afternoon, for longer. it. Dave. Thanks

David N. Farr

my question. you're last Okay Andy,

Andrew Kaplowitz

Thanks today. it. little longer for appreciate running a I

David N. Farr

I make why the That's you bit, Andrew up just little get doesn't like went harass got he I and to because I now. could Well in said I me Andrew. right to mean, saw a harass I sure queue and

Andrew Kaplowitz

I understand. I I welcome it. welcome it.

David N. Farr

Okay.

Andrew Kaplowitz

So about Residential your you the & margin performance. in ask of let context me Commercial Solutions

the versus slight year price down, of cost. company over were cause the flat divestitures, but bad the Margins relatively you for mentioned a had You year, had tailwind.

maybe the or So impact mix. from was inflation about what talk

You talked we And residential. margin Are forward? U.S. should how think about business? the you weaker moving investing about slightly in more

David N. Farr

the in business more investing definitely right now. are We

here are We to also U.S. be in next some and the generation technologies that going Europe years. hitting heavily investing the are couple in in hitting very in next

around up technology, some investments ramped innovation. we've So some

regulations space be from have that commercial the the As to you of ahead the and from going standpoint, a some know, we play our and standpoint there's coming space to we to offering be space. we new to that then do trying we're to we win value add that. some And more if to time quite customer. that, then for win that And solution of

for So is the proposition value higher actual us.

residential, and with our back we're business squeezed two a now, back two we'll go off basically we're get this or cost line. but forth on customer little know price the being We – and that issue. in we a And within that I the bit, We from quarter commercial, On so. this space right forth and back back quarters base. trade within will,

positive not us the pressure but profitable pressure but is big bit. and – that this just a quarter not I So that as businesses Asia hurt under a so mix it's other European little not perspective. but a pressure from say getting space the in it's let's be just it's number I it's the from business, is negative a think where we'll next good we're And know within the But global business nearly our closer, for too, our or thing U.S. our a business.

this have really ton of faster and these from little a profitably. the I'm also towards up it want not but the drive cost of we come of bit and not lot margin going to going drive the driving the faster continuing investments by next to So couple profitability. We're some a optimize going technologies But mix out. We're still to of years, level I growth a to over to that complain mix a new growth but raise it's of going on. – at

Andrew Kaplowitz

has Dave. helpful, And you Solutions still talked March that's been about Yeah, then Automation orders, good.

large later. a to us concerned than us But call that kick slow told projects quarter they on start do when to be not told this You sooner in could you little. last rather

is to X% So indication XX% And on any are the April looks thinking still right year? about for this range at how of you point? sort

David N. Farr

tougher really could a couple that numbers very projects of X% I mean, any as this we have point. pop at right getting larger would range. Solutions towards months. And – I earlier don't but there XX% right which orders in holding whole up But Emerson. Again, April mentioned businesses for like I we in good good ticking solid we about start X% a I now. the there Automation numbers get is I both that now. such if up is very But lines holding solid expect all for bit the a comps, year this on sit a sign. little are the The range feel starting to trend where and of are

of the we Solutions felt here are to you I'm to we April color in we'll down the as second year. But, taking into so in try have And right and indication the underlying give end. in what right And I'm trend why May this on bit have little guys hoping does that a lines get at at I a going more X% way up and now, Automation we'll the what's see good we'll the – that's number EPG, see about little early after going to EPG U.S. the bit that on-board, growth too half high better going

Andrew Kaplowitz

EPG. Appreciate it, Dave. you at See

David N. Farr

much. Thank you very

David N. Farr

world it employees to the Yeah. now. closer Emerson sales X.X% looking quarter people, for move to I'll any around I repeat And joining first now And call. second this around we growth. That's half this deliver solid third thank good – second that. want it quarter, just continue With like effort. we're very We're to call plus I somewhere again, a for of thank it's I have today But or than solid will year. underlying want Again, And the to what going it, looking very fourth everybody. another quarter, shareholders couple year. a I the can't their as really to half to us. to of And us minus all X% I'm hopefully as that, right into of want earnings the we again our all looks up. quarter. thank Thank at pennies. the you. this also for a at we But that Again, us $X.XX, good the wrap look

Operator

and concluded. you Thank Thank presentation. you Mr. gentlemen, today's the conference has Farr. Ladies for attending

now disconnect may lines. You your

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