Emerson reported results for the fourth fiscal quarter and fiscal year ended September 30, 2020.
Fourth quarter GAAP net sales of $4.6 billion were down 8%, while underlying sales were down 9%, in-line with management guidance. Full year GAAP net sales of $16.8 billion were down 9%; underlying sales were down 8%, also in-line with management guidance. Fourth quarter gross profit margin of 41.3% was down 150 basis points from the previous year primarily due to volume deleverage and mix.
Fourth quarter GAAP EPS was $1.20, up 3% from the year prior; adjusted EPS, which excludes restructuring and certain tax benefits, was $1.10, down 4%. Full year GAAP EPS was $3.24, down 13% from the year prior, and ahead of guidance of $2.80 to $2.95; adjusted EPS was $3.46, down 6%, and ahead of guidance of $3.20 to $3.35.
Operating cash flow was $1.23 billion, up 2% for the quarter. Full year operating cash flow was $3.08 billion, up 3%. Free cash flow was $1.02 billion, up 2% for the quarter, resulting in exceptional free cash flow conversion of 140%. Full year free cash flow was $2.55 billion, up 6%, resulting in strong free cash flow conversion of 128% driven by rigorous operational execution across the two business platforms.
“The year took a dramatic turn in March, as the virus rapidly spread and impacted all of our major markets,” said Emerson chairman and CEO David N. Farr. “Despite unforeseen once-in-a-career challenges and circumstances, Emerson was relatively well prepared and positioned. We had already begun our focus on cost containment actions and planning for a low-growth year, as was laid out during our February 2020 Investor Day. And our well-established regionalization strategy - maximizing sourcing, manufacturing, and distribution of products and solutions within regional end markets - was instrumental in maintaining our supply chain integrity as uncertainty intensified and economies halted. Amidst all the challenges, we exceeded our second quarter reset financial forecast in sales, EBITDA, and cash flow.
“As the situation rapidly evolved, Emerson's leadership team and global operations maintained a focus on our key priority: to safely serve our customers and ensure business continuity in essential industries like power, life sciences, food & beverage, home comfort and safety, water, and energy,” Farr added.