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Emerson (EMR) Introduces ProAct Connect+ Software Suite

Zacks Equity Research

Emerson Electric Co. EMR recently introduced an enterprise software suite — ProAct Connect+. It helps supermarket and convenience store operators to enhance the performance of their HVAC/R assets and meet financial, regulatory as well as brand management objectives.

ProAct Connect+ offers key stakeholders of a business with a suite of powerful and easy-to-use applications. It features a bundle of more than 50 functions. The solution helps in ensuring optimal performance of HVAC/R systems by offering near real-time sites monitoring option and the capability to make changes to controller settings. As a matter of fact, with the continuous monitoring of refrigeration system component parameters, the solution supports extention of equipment life, reduction of maintenance costs as well as mitigation of refrigerant loss.

Emerson is well positioned to benefit from global infrastructure growth, as its core businesses hold dominant positions in markets tied to energy efficiency and infrastructure spending. Many of the company’s products are key components for building infrastructure, such as data centers, manufacturing plants and office buildings. Also, environmental regulations are driving the need for new products, adding to the company's strength.

Going forward, Emerson believes that increased turnaround activity, and ongoing mid and small-sized Maintenance, Repair and Operations projects will bolster revenues of its Automation Solutions segment. On the other hand, continued growth in air conditioning demand will likely drive the top-line performance of the company’s Commercial & Residential Solutions segment.

In the past month, shares of this Zacks Rank #3 (Hold) company have yielded 1.6% return against the industry’s decline of 0.9%.

However, material cost inflation remains a cause of concern. In the fiscal fourth quarter 2018 (ended September 2018), unfavorable mix and material inflation hurt margins of the company’s Commercial & Residential Solutions segment by nearly 150 basis points. Emerson expects inflation environment to persist even in the quarters ahead.

Key Picks

Some better-ranked stocks from Zacks Industrial Products sector are DXP Enterprises, Inc. DXPE, Enersys ENS and Colfax Corporation CFX. While DXP Enterprises sports a Zacks Rank #1 (Strong Buy), Enersys and Colfax carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DXP Enterprises exceeded estimates thrice in the preceding four quarters, the average positive earnings surprise being 112.62%.

Enersys surpassed estimates thrice in the trailing four quarters, the average positive earnings surprise being 2.83%.

Colfax outpaced estimates in each of the preceding four quarters, the average earnings surprise being 8.88%.

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