EMR - Emerson -4% after cutting guidance for full-year sales growth

Emerson Electric ( NYSE: EMR ) -3.9% in Tuesday's trading after beating expectations for FQ3 adjusted earnings but lowering guidance for full-year net sales growth.

Q3 net income rose to $921M, or $1.54/share, from $627M, or $1.04/share, in the year-earlier quarter, while net sales rose 7% Y/Y to $5B.

Q3 operating cash flow fell 33% Y/Y to $740M, and free cash flow fell 36% to $630M.

The company cut its FY 2022 net sales growth guidance to 7%-8% from 8%-10% previously, and narrowed its outlook for underlying sales growth to 9%-10% from 9%-11%, to reflect the impacts of the recent AspenTech and Therm-O-Disc deals and writeoffs related to the Russia exit, and continued macroeconomic and geopolitical uncertainty.

At the same time, Emerson ( EMR ) raised its full-year guidance for adjusted earnings of $5.05-$5.15/share from its previous view of $4.95-$5.10.

The company also expects full-year operating cash flow of $3B and free cash flow of $2.5B.

Emerson's ( EMR ) sale of the InSinkErator business to Whirlpool for $3B was well received by analysts; according to Bloomberg, Barclays analyst Julian Mitchell said the transaction price was favorable, with the unit exchanging hands for ~18x EBITDA.

Emerson's ( EMR ) stock price return shows a 6% YTD loss and a 14% decline during the past year .

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