Emerson: Statoil’s Chosen Supplier – Analyst Blog

Emerson Process Management, a division of Emerson Electric Company (EMR), has been selected by Norway-based Statoil ASA (STO) as a preferred supplier of automation and safety systems. This enables Emerson to bid on all future projects in that product area.

 

Statoil aims at utilizing innovative ideas and technology initiatives to grab opportunities in shale gas, heavy oil, and deep-water production.

 

The agreement is of five-year duration and encompasses process safety and automation systems for capital intensive projects as well as facility upgrade. It has options for two additional two-year renewals at the end of the first five years.

 

With a global workforce of more than 140,000 employees and 265 manufacturing facilities, Emerson is adequately backed by infrastructure, knowledge, and experience to deliver its technology and product solutions to customers around the world.

 

The company continues to invest in breakthrough technologies, expand its geographic presence and improve the cost structure of the business, both organically and inorganically.

 

We anticipate that emerging markets will continue to outperform mature markets and could represent a significant portion of the company’s total sales. Furthermore, emerging markets could recover faster compared to the U.S. and Europe.

 

The company’s operations are at multiple locations spread across the world, a majority of which are outside the United States and are therefore at increased propensity for disrupted production, causing delays in shipment. Substantial sales abroad could be impaired by economic shocks. Results of operations may also be adversely affected by foreign currency fluctuations.

 

Emerson Electric Company is a diversified global manufacturing and technology company. It offers a wide range of products and services in the areas of process management, climate technologies, network power, storage solutions, professional tools, appliance solutions, motor technologies, and industrial automation.

 

We currently have a Neutral recommendation on Emerson Electric Company.