EMR - You Can't Control Big Stock Price Declines but You Can Control What You Do About Them
2023-11-11 07:10:00 ET
If you've invested long enough, you've seen at least one of your stocks move its price dramatically over the course of a single day. It can be shocking when it happens, but it actually happens quite often with all kinds of stocks, particularly around earnings season.
Share prices of industrial giant Emerson Electric (NYSE: EMR) , for example, dropped a touch over 7% after the company reported fiscal 2023 fourth-quarter earnings. The reason and the implications for long-term investors, however, may not always match up. When you see a big drop, you need to dig in and understand what's really going on.
At first glance, there was a lot to like in Emerson's Q4 update. For example, sales increased 5% year over year in the quarter. They were up 10% in fiscal 2023 over 2022. Adjusted segment operating earnings before interest, taxes, depreciation, and amortization (EBITDA) margin rose 80 basis points in the quarter and 220 basis points for the year. Adjusted earnings increased 21% year over year in Q4 and 22% over the fiscal year. And Emerson generated 17% more free cash flow in the quarter, with the full-year increase at 35%.
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You Can't Control Big Stock Price Declines, but You Can Control What You Do About Them