Core Viewpoint - Emerson Electric's fiscal fourth-quarter earnings met expectations, but the guidance for fiscal year 2026 disappointed investors, leading to a 3.9% drop in stock price [3][6][7]. Financial Performance - For the September quarter, Emerson reported adjusted earnings per share of $1.62, an increase from $1.48 a year earlier, and sales of $4.85 billion, reflecting a 4% year-over-year growth [3][4]. - The fiscal year 2026 guidance anticipates total sales growth of about 5.5%, implying revenue of approximately $19 billion, which is below Wall Street projections [4][6]. Market Conditions - The manufacturing sector continues to face challenges, with the Purchasing Managers Index at 48.7 for October, indicating contraction [6][9]. - Orders increased by 6% year over year, which is a positive sign, but this growth has not yet translated into sales growth [8]. Regional Performance - North American business performance was satisfactory, while there were weaknesses noted in China and Europe [7]. Analyst Insights - Analysts expressed disappointment with the guidance, particularly in control systems and software, which are expected to decline in the first half of 2026 [6][7]. - There is a possibility that conservative guidance may benefit investors, as past forecasts have been conservative compared to actual earnings [8].

Core Insights - Emerson Electric Co. reported fourth-quarter fiscal 2025 adjusted earnings of $1.62 per share, matching the Zacks Consensus Estimate, with a year-over-year increase of 9% [1] - The company's net sales reached $4.89 billion, exceeding the consensus estimate of $4.88 billion, and reflecting a 5% year-over-year growth driven by the Software and Control segment [1] Business Segments' Performance - Emerson operates under two segments: Intelligent Devices and Software & Control, with Intelligent Devices generating net sales of $3.40 billion, a 4% increase year over year [2] - The Intelligent Devices segment includes four subgroups: Final Control, Measurement & Analytical, Discrete Automation, and Safety & Productivity [2] - Final Control's sales increased 4% to $1.22 billion, Measurement & Analytical sales rose 3% to $1.15 billion, Discrete Automation's sales grew 5% to $676 million, and Safety & Productivity's sales increased 2% to $360 million [3] - The Software and Control segment generated net sales of $1.48 billion, up 9% year over year, with Control Systems & Software sales at $1.07 billion (7% increase) and Test & Measurement sales at $408 million (13% increase) [4] Margin Details - The cost of sales rose 3.9% year over year to $2.34 billion, with a pretax earnings margin of 16.4%, up from 14.7% in the previous year [5] - Adjusted EBITA margin improved to 27.5% from 26.2% year over year, while selling, general, and administrative expenses increased 1.1% to $1.33 billion [5] Balance Sheet & Cash Flow - At the end of the fiscal fourth quarter, Emerson had cash and cash equivalents of $1.54 billion, down from $3.6 billion at the end of fiscal 2024, and long-term debt increased to $8.32 billion from $7.16 billion [6] - The company generated net cash of $3.10 billion from operating activities, a 7% decrease year over year, with capital expenditure rising to $431 million from $419 million [7] - Emerson paid out dividends of $1.19 billion and repurchased shares worth $1.17 billion during the same period [7] Fiscal 2026 Outlook - For the first quarter of fiscal 2026, Emerson anticipates net sales growth of approximately 4% and underlying sales growth of about 2% [8] - The company projects fiscal 2026 net sales growth of approximately 5.5%, with underlying sales expected to rise about 4% [11] - Adjusted earnings per share are estimated to be between $6.35 and $6.55, with operating cash flow projected at $4.0 to $4.1 billion and free cash flow around $3.5 to $3.6 billion [11]

Core Insights - Emerson Electric reported adjusted earnings per share of $1.62, meeting Wall Street expectations [1] - The company achieved sales of $4.6 billion, which also aligned with analyst forecasts [1] Financial Performance - Adjusted earnings per share: $1.62 [1] - Total sales: $4.6 billion [1]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Data and Key Metrics Changes - Underlying sales in Q4 2025 increased by 4%, with full-year underlying sales growth at 3%, slightly below expectations due to softer book-to-ship ratios in Europe and China [6][7] - Adjusted earnings per share (EPS) for Q4 was $1.62, and for the full year, adjusted EPS was $6, reflecting a 9% increase year-over-year [7][15] - Free cash flow for the year reached $3.24 billion, up 12% year-over-year, exceeding guidance [7][16] - The company expects sales growth of 5.5% for fiscal 2026, with underlying sales growth of approximately 4% [7][24] Business Line Data and Key Metrics Changes - The software and control segment grew by 5%, while intelligent devices increased by 2% [18] - Process and hybrid businesses were up 4%, and discrete businesses finished the year slightly up at 1% [18] - Test and measurement orders surged by 27% in Q4, with a full-year growth of 12% [6][14] Market Data and Key Metrics Changes - Underlying orders grew by 6% in Q4, with strong performance in North America, India, and the Middle East and Africa, while demand in Europe and China remained soft [8][14] - The backlog at the end of the year was $7.4 billion, up 3% year-over-year [19] - The company reported a gross profit margin of 52.8% and an adjusted segment EBITDA margin of 27.6% for the year [15][19] Company Strategy and Development Direction - Emerson is focused on capitalizing on automation technologies to drive digital transformation and enhance operational efficiency [5][6] - The company plans to return approximately $2.2 billion to shareholders, including $1 billion in share repurchases and $1.2 billion in dividends, marking a 5% increase in dividends per share [7][8] - Emerson aims to achieve $100 million in run-rate synergies from the AspenTech integration by the end of 2026, two years ahead of schedule [16][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, driven by sustained demand in automation and digital transformation [4][6] - The company anticipates continued strength in power, LNG, life sciences, and semiconductor markets, projecting high single-digit to low double-digit growth in these sectors [22][56] - Management acknowledged challenges in Europe and China but remains confident in the overall demand environment [22][100] Other Important Information - The company launched two AI-powered applications aimed at enhancing productivity and workflow automation [12][13] - Emerson's annual contract value (ACV) for software grew by 10% year-over-year, ending at $1.56 billion [7][87] - The company plans to maintain a strong balance sheet, with a net debt to adjusted EBITDA ratio expected to decrease to approximately 2 times by the end of 2026 [31] Q&A Session Summary Question: Clarification on software renewal impact - Management confirmed that the software renewal dynamic is an accounting issue affecting revenue recognition, with no impact on free cash flow [35][40] Question: Orders growth in different segments - Orders in process and hybrid remained resilient at mid-single digits, while discrete orders recovered to high single digits driven by test and measurement [45] Question: Visibility on first half versus second half growth - Management indicated strong visibility for second half growth, with expectations of 6% growth compared to 4% in the first half, excluding the software renewal impact [52][54] Question: Trends in test and measurement and discrete automation - Management noted strong growth in aerospace and defense and semiconductor markets, while automotive remains weak [66] Question: Impact of changing subsidy environment on sustainability projects - Management reported a significant reduction in the outlook for sustainability projects, but this did not impact the current backlog [72][73] Question: Power generation market visibility - Management expressed strong visibility in power generation projects, with significant investments expected in modernization and new capacity [85]

Financial Data and Key Metrics Changes - Underlying sales in Q4 2025 increased by 4%, with full-year underlying sales growth at 3%, slightly below expectations due to softer demand in Europe and China [6][7] - Adjusted earnings per share (EPS) for Q4 was $1.62, and for the full year, adjusted EPS was $6, reflecting a 9% increase year over year [7][15] - Free cash flow for the year reached $3.24 billion, up 12% year over year, exceeding guidance [7][16] - The company expects sales growth of 5.5% for fiscal 2026, with underlying sales growth of approximately 4% [7][24] Business Line Data and Key Metrics Changes - The software and control segment grew by 5%, while intelligent devices increased by 2% [18] - Process and hybrid businesses were up 4%, and discrete businesses finished the year slightly up at 1% [18] - Test and measurement orders surged by 27% in Q4, contributing significantly to overall orders growth [6][9] Market Data and Key Metrics Changes - Underlying orders grew by 6% in Q4, with strong performance in North America, India, and the Middle East and Africa, while demand in Europe and China remained soft [8][14] - The backlog at the end of the year was $7.4 billion, up 3% year over year, positioning the company well for 2026 [19] - The company reported strong growth in LNG, power, and life sciences, collectively up 11% year over year [14][16] Company Strategy and Development Direction - The company is focused on capital allocation priorities, planning to return approximately $2.2 billion to shareholders through share repurchases and dividends [7][8] - Emerson aims to achieve adjusted segment EBITDA margin of approximately 28% in 2026, reflecting strong operational execution [24] - Continued investment in technology and innovation is emphasized, with 8% of sales allocated to R&D in 2025 [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, driven by sustained demand for automation technologies and digital transformation [6][7] - The company anticipates a challenging environment in Europe and China but expects strong growth in the Americas and India [22][24] - Management highlighted the importance of maintaining a healthy capital cycle and the resilience of MRO spending across the installed base [8][14] Other Important Information - The company achieved record gross profit margin of 52.8% and adjusted segment EBITDA margin of 27.6% [15] - Significant progress was made in integrating Aspen Tech, realizing $50 million in synergies in 2025, with plans to achieve $100 million in run rate synergies by the end of 2026 [16][19] Q&A Session Summary Question: Clarification on software renewal impact - Management confirmed that the software renewal dynamic is an accounting issue affecting revenue recognition, with no impact on free cash flow [35][40] Question: Orders growth in different segments - Orders in process and hybrid remained resilient at mid-single digits, while discrete orders recovered to high single digits driven by test and measurement [45] Question: Visibility on first half versus second half growth - Management indicated strong visibility for second half growth, with a projected 6% growth rate, excluding the software renewal dynamic [52][54] Question: Trends in test and measurement and discrete automation - Test and measurement is expected to see high single-digit growth, while discrete automation remains weak, particularly in automotive [66][67] Question: Impact of changing subsidy environment on sustainability projects - Management noted a significant reduction in the outlook for sustainability projects, but this did not impact the current backlog [72][73] Question: Power generation market visibility - The company added approximately $1 billion in projects to its project funnel, indicating robust activity in power generation and modernization [85]

Financial Data and Key Metrics Changes - In Q4 2025, underlying sales increased by 4%, with adjusted segment EBITDA margin at 27.5%, up 1.3 points year-over-year [5][6] - For the full year, underlying sales grew by 3%, with adjusted earnings per share (EPS) of $6, reflecting a 9% increase year-over-year [6][15] - Free cash flow reached $3.24 billion, up 12% year-over-year, exceeding guidance [6][15] Business Line Data and Key Metrics Changes - The test and measurement segment saw a significant increase of 27% in orders during Q4, contributing to overall growth [5][8] - Software and control grew by 5%, while intelligent devices increased by 2% [17] - Process and hybrid businesses were up 4%, while discrete businesses finished slightly up at 1% [17] Market Data and Key Metrics Changes - Underlying orders grew by 6% in Q4, with strong performance in North America, India, and the Middle East and Africa, while Europe and China remained soft [7][12] - The backlog at the end of the year was $7.4 billion, up 3% year-over-year, indicating strong positioning for 2026 [18] - The LNG market backlog was approximately $2 billion, with $350 million specifically in the backlog [92] Company Strategy and Development Direction - The company aims for 4% underlying sales growth in 2026, supported by investments in growth verticals and robust performance in test and measurement [6][25] - Plans to return approximately $2.2 billion to shareholders, including $1 billion in share repurchases and $1.2 billion in dividends, marking a 5% increase in dividend per share [6][7] - Continued investment in technology, with 8% of sales allocated to innovation in 2025 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, driven by resilient demand for automation technologies and digital transformation [5][6] - The company anticipates challenges in Europe and China but expects strong growth in North America and India [21][24] - Management highlighted the importance of software annual contract value (ACV), projecting a 10% growth in ACV for 2026 [82] Other Important Information - The company achieved record gross profit margin of 52.8% and adjusted segment EBITDA margin of 27.6% [13] - Integration of AspenTech is progressing well, with $50 million in synergies realized in 2025, and plans to achieve $100 million in run rate synergies by the end of 2026 [15] Q&A Session Summary Question: Clarification on software renewal impact - Management confirmed that the software renewal dynamic is an accounting issue affecting revenue recognition, with no impact on free cash flow [35][39] Question: Orders growth in different segments - Orders in process and hybrid remained resilient, while discrete markets showed recovery driven by test and measurement [44] Question: Visibility on power generation projects - Management indicated strong visibility in power generation, with significant projects added to the funnel [80] Question: LNG backlog and market dynamics - Approximately $2 billion of the $11.1 billion project funnel is related to LNG, with expectations for continued activity despite challenges in Europe and China [92][94]

Core Viewpoint - Emerson Electric reported a 5% year-over-year increase in net sales for Q4 of fiscal year 2025, reaching $4.85 billion, slightly below analysts' expectations of $4.9 billion due to unstable demand for automation equipment [1] Financial Performance - Net sales for Q4 fiscal year 2025 were $4.85 billion, a 5% increase compared to the previous year [1] - Adjusted earnings per share were $1.62, meeting expectations [1] Shareholder Returns - The company repurchased 8 million shares over the past year and plans to continue a $1 billion stock buyback in fiscal year 2026 [1] - Quarterly dividend was increased by 5.2% to $0.555 per share [1]

Core Insights - Emerson Electric reported quarterly earnings of $1.62 per share, matching the Zacks Consensus Estimate, and showing an increase from $1.48 per share a year ago [1] - The company posted revenues of $4.86 billion for the quarter ended September 2025, which was 0.6% below the Zacks Consensus Estimate, but up from $4.62 billion year-over-year [2] - Emerson Electric has surpassed consensus EPS estimates three times over the last four quarters, while it has only topped revenue estimates once in the same period [2] Earnings Performance - The earnings surprise for the previous quarter was +0.66%, with actual earnings of $1.52 per share compared to an expected $1.51 [1] - The current consensus EPS estimate for the upcoming quarter is $1.48, with expected revenues of $4.39 billion, and for the current fiscal year, the EPS estimate is $6.51 on revenues of $18.92 billion [7] Stock Performance and Outlook - Emerson Electric shares have increased by approximately 11.1% since the beginning of the year, while the S&P 500 has gained 15.1% [3] - The company's Zacks Rank is currently 2 (Buy), indicating expectations for the stock to outperform the market in the near future [6] Industry Context - The Manufacturing - Electronics industry, to which Emerson Electric belongs, is currently ranked in the top 17% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8]

2025 Performance Highlights - Q4 underlying orders growth was 6%[7] - Full year underlying sales growth was 3%, impacted by softer book-to-ship in Europe and China[7] - Adjusted EPS for 2025 was $6.00, a 9% year-over-year increase[7] - Free cash flow reached $3.24 billion, up 12% year-over-year[7] - Annual Contract Value (ACV) was $1.56 billion, a 10% increase year-over-year[7] 2026 Guidance - Sales growth is projected at approximately 5.5%, with underlying growth of around 4%[7] - Adjusted segment EBITA margin is expected to be approximately 28%[7] - Adjusted EPS is guided to $6.35 – $6.55[7] - The company plans to return approximately $2.2 billion to shareholders through share repurchases of around $1 billion and a 5% dividend per share increase[7] Regional Outlook - Sustained momentum is expected in North America, India, and the Middle East, offset by continued softness in Europe and China[13] - China is expected to be approximately flat in terms of underlying sales growth[27] Financial Details - The company anticipates free cash flow between $3.5 billion and $3.6 billion[30] - Price is expected to contribute approximately 2.5 percentage points to sales growth[30] - The tax rate is projected to be around 21.5%[30]