Emerson's Copeland Scroll ZF54K5 To Boost Energy Efficiency

Emerson Electric Company (NYSE:EMR) recently announced the release of Copeland Scroll ZF54K5 compressor to help facility operators reduce costs and boost energy efficiency. The Copeland Scroll ZF54K5 compressor, which is a capacity extension of the Copeland Scroll K5 compressor, offers high-level energy efficiency capabilities besides reducing carbon dioxide emissions.

Notably, the extended capacity permits up to 75,500 BTU/hr for low temperature applications, while the precision-machined scrolls offer higher isentropic efficiency and wear-in for enhanced performance. Also, the new valving technology, which adjusts the scroll compression ratio, helps in the improvement of the low ambient performance.

In fact, the Copeland Scroll ZF54K5 compressor comes up with CoreSense Diagnostics that can help to extend its life and prevent needless service calls. In general, the CoreSense Diagnostics helps users to increase speed and accuracy of troubleshooting problems related to residential air conditioning system.

Our Take

Emerson is well positioned to benefit from global infrastructure growth. This is because its core businesses hold dominant positions in markets related to energy efficiency and infrastructure spending. Currently, the company is very enthusiastic about the prospects of its Commercial & Residential Solutions segment as it is witnessing improving trends in the construction markets across the United States, Europe and Asia. Thriving Heating Ventilation and Air-Conditioning (HVAC) as well as refrigeration markets, and construction-related demand in key-end markets are expected to boost the segment's performance. For instance, the company anticipates the segment to grow 5% in fiscal 2018.

Also, Emerson enjoys a solid reputation for launching products and technologies to gain a competitive advantage over peers. Especially, the company’s operating arm, Emerson Process Management, proactively introduces products to broaden its customer base and gain market traction. Furthermore, Emerson has a solid history of clinching lucrative contracts in the energy infrastructure.

In the past three months, this Zacks Rank #3 (Hold) company has returned 2.7% against the industry’s decline of 0.6%.

However, prolonged softness in the oil and gas markets has affected both capital spending and operational expenditures of clients, thereby hurting the company’s order rates in power generating alternators and electrical distribution businesses. Moreover, the issue of oversupply might continue to impact prices and spending levels in the oil and gas sector, which adds to the challenges.

Key Picks

Some better-ranked stocks from the same space are Regal Beloit Corporation (NYSE:RBC) , Franklin Electric Co., Inc. (NASDAQ:FELE) and Capstone Turbine Corporation (NASDAQ:CPST) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Regal Beloit exceeded estimates twice in the trailing four quarters, with an average positive earnings surprise of 1.6%.

Franklin Electric outpaced estimates thrice in the preceding four quarters, with an average positive earnings surprise of 5.3%.

Capstone Turbine surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 37.5%.

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