Group 1: Core Investment Thesis - Timeless stocks, or "Dividend Kings," are companies that have consistently raised dividends for at least 50 consecutive years, indicating strong business models and cultures [3] - The focus is on high-quality businesses that can provide steady returns over generations, rather than stocks with planned exit strategies [2] Group 2: Company Profiles - **Emerson Electric**: This automation company has raised its dividend for 67 consecutive years and is positioned to benefit from trends like automation and energy efficiency. Management projects 4% to 7% annualized organic revenue growth and double-digit earnings growth over the long term. The dividend payout ratio is a comfortable 35% of this year's earnings estimates [5][6][7] - **Illinois Tool Works**: A diversified conglomerate that has grown its dividend for 53 consecutive years. It operates across seven segments, which helps it withstand economic downturns. The dividend consumes just over 58% of this year's estimated earnings, and analysts expect earnings growth of 5% to 6% annually over the next three to five years [8][10][11] - **Genuine Parts**: This automotive and industrial parts distributor has a steady business model with 68 consecutive years of dividend increases. It generates approximately $23 billion in annual revenue and operates in a market worth an estimated $350 billion. The company spends about half its earnings on dividends and has a long-term estimated earnings growth rate of 7% [12][13][14]

Core Insights - Emerson and Zitara Technologies have formed a strategic partnership to integrate Zitara's advanced battery management software into Emerson's Ovation™ automation platform, enhancing battery performance and monitoring solutions for customers [1][2][3] Company Overview - Emerson is a global technology and software company that provides innovative solutions for essential industries, focusing on automation and sustainability [5] - Zitara, founded in 2019, specializes in advanced battery management software, utilizing algorithms and machine learning to optimize battery performance and safety [6] Partnership Details - The collaboration aims to enhance energy storage management, optimize battery usage, and improve battery lifetime and safety across various applications [2][3] - The integration of Zitara's software into the Ovation platform will support utilities in managing distributed energy resources and meeting the demand for reliable and sustainable power [3][4] - Both companies emphasize their commitment to advancing technology in the power and water sector and facilitating the transition to sustainable energy solutions [4]

Compelling and certain value of $265 per share in cash, unanimously recommended by the independent AspenTech Special Committee, represents Emerson's best and final price ST. LOUIS, Feb. 10, 2025 /PRNewswire/ -- Emerson (NYSE: EMR) today acknowledged the public statement released by Elliott Investment Management L.P. on February 7, 2025 regarding the tender offer under which Emerson will acquire all outstanding shares of common stock of Aspen Technology, Inc. (NASDAQ: AZPN) ("AspenTech") not already owned by ...

Core Insights - Emerson Electric Co. reported first-quarter fiscal 2025 adjusted earnings of $1.38 per share, exceeding the Zacks Consensus Estimate of $1.28, marking a 13.1% year-over-year increase [1] - The company's net sales were $4.18 billion, slightly missing the consensus estimate of $4.21 billion, with a year-over-year increase of 1% [1] Financial Performance - The Intelligent Devices segment generated net sales of $2.84 billion, up 0.7% year over year, while the Software & Control Automation Solutions segment reported net sales of $1.35 billion, up 2.9% year over year [3][5] - The cost of sales decreased by 11.9% year over year to $1.9 billion, with a pretax earnings margin of 18.6% compared to 4.2% in the previous year [6] - The company generated net cash of $777 million from operating activities, an increase of 87.2% year over year [8] Segment Performance - In the Intelligent Devices segment, Final Control sales increased by 3.8% to $976 million, while Discrete Automation sales declined by 5.4% to $580 million [4] - In the Software & Control segment, AspenTech's sales surged by 17.9% to $303 million, while Test & Measurement sales fell by 6% to $359 million [5] Outlook - For Q2 fiscal 2025, Emerson anticipates net sales growth between -0.5% to 0.5% and earnings per share in the range of $1.01 to $1.05 [9] - The full fiscal year 2025 outlook includes net sales growth of 1.5% to 3.5%, revised down from a previous estimate of 3.5% to 5.5% [10] Major Developments - Emerson signed an agreement to acquire the remaining shares of Aspen Technology for $7.2 billion, valuing the company at a market capitalization of $17 billion [12][13]

Financial Data and Key Metrics Changes - The company reported underlying sales growth of 2%, with process and hybrid businesses up approximately 5%, while discrete businesses were down approximately 4% [46] - Adjusted earnings per share (EPS) grew 13% year-over-year to $1.38, exceeding expectations [22][50] - Free cash flow was $694 million, representing a margin of approximately 17% and an increase of 89% compared to Q1 2024 [23][50] - Gross profit margin reached a record 53.5%, reflecting the value of the transformed portfolio [21] - Adjusted segment EBITDA margin improved by 340 basis points to 28%, driven by strong operational performance [22][48] Business Line Data and Key Metrics Changes - Underlying orders were up 1% year-over-year, led by healthy processing hybrid markets, which were up low-single digits [18] - Software solutions saw a robust underlying demand with 10% growth in annual contract value (ACV), led by double-digit growth from control systems and software [11] - The discrete business, including safety and productivity, was down approximately 4%, with expectations for a recovery in the second half of the year [46][52] Market Data and Key Metrics Changes - Demand in China remained muted, with strength in power offset by weakness in chemical and discrete end markets [20] - Orders growth was led by robust demand in the Middle East and strength in the U.S., particularly from maintenance, repair, and operations (MRO) business [19] - The backlog increased slightly to $7.3 billion, with total backlog up 4% excluding foreign exchange effects [48] Company Strategy and Development Direction - The company is focused on disciplined M&A around bolt-on opportunities post portfolio transformation, with a commitment to return cash to shareholders through dividends and share repurchases [102] - The strategic alternatives process for safety and productivity is still underway, with updates to be provided when appropriate [14] - The company is optimistic about the LNG market, expecting significant opportunities as additional projects are announced to meet growing demand for gas [30][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver on 2025 plans, reiterating guidance for underlying sales, adjusted EPS, and free cash flow [12][52] - The company expects a meaningful recovery in discrete businesses against easier comparisons in the second half of the year [52] - Management noted that investments in energy security and decarbonization are continuing, with no signs of a slowdown in the sustainability funnel [80] Other Important Information - The company completed approximately $1 billion of share repurchases in the quarter as guided [23] - The impact of tariffs has been minimal due to proactive measures taken since 2018, with expectations for de minimis impact from Canada and Mexico [16][17] Q&A Session Summary Question: Could you provide specifics on Mexico's exposure to tariffs? - Management feels comfortable with the understanding of exposure related to potential tariffs in Mexico and is prepared to implement price and surcharge activities if necessary [61] Question: Can you distinguish between the discrete businesses' performance expectations? - Management indicated that the commentary applies across both legacy discrete and test and measurement businesses, with some strength in semiconductors and MRO, but caution in factory automation and automotive [64] Question: What is the impact of foreign exchange on sales and EPS? - The foreign exchange headwind impacted sales, but there was a benefit to EPS due to transactional FX that did not occur in the current year [70][71] Question: What is the outlook for order growth and book-to-bill ratios? - Management does not forecast orders publicly but indicated that book-to-bill was greater than one in the first quarter and expects it to be about one for the full year [127] Question: How does the company view the LNG market and its win rates? - The lifting of the moratorium on new LNG permits is expected to significantly impact investments, with strong win rates in North America and the Middle East [115][116] Question: What are the expectations for margins moving forward? - Management confirmed that while cost reductions will continue, the mix dynamic that drove high margins in Q1 is expected to temper as the year progresses [141][144]

Statements in this presentation and our commentary and responses to questions that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later developments. These risks and uncertainties include the scope, duration and ultimate impacts of the Russia-Ukraine and other global conflicts, as well as economic and currency conditions, market demand, pricing, protection of intellectual pr ...

Financial Performance - Emerson Electric reported adjusted earnings per share (EPS) of $1.38, exceeding analyst expectations by 7.8% [1] - Total revenue for the first quarter was $4.175 billion, slightly below the estimated $4.221 billion, marking a year-over-year increase of 1.4% [2][3] - Operating cash flow increased by 75% to $777 million, while free cash flow nearly doubled to $694 million, reflecting strong cash management [9] Business Strategy and Transformation - The company is undergoing a significant portfolio transformation to enhance its leadership in automation and intelligent technology, focusing on strategic acquisitions and divestitures [4] - Recent acquisitions include National Instruments and an expanded stake in AspenTech, aimed at strengthening capabilities in software and automation [4] - Emerson divested businesses like Climate Technologies to concentrate on high-margin areas, enhancing growth and operational efficiency [5] Segment Performance - The Intelligent Devices segment experienced a modest 1% sales growth, with margins increasing from 21% to 24.1% [7] - The Software and Control segment saw an 18% sales growth, improving its margin to 14.4% due to AspenTech's performance [7] - Discrete Automation faced challenges with a 5% sales decline, indicating areas for market strategy adaptation [7] Geographic Performance - Sales increased in the Americas by 3% and in Asia by 4%, while Europe experienced a 2% decline, highlighting the need for strategic focus in high-opportunity regions [8] - Emerson's investment in R&D was 8.1% of sales, demonstrating a commitment to innovation and sustainability initiatives [8] Outlook - For the remainder of 2025, Emerson anticipates underlying sales growth of 3% to 5% and plans to return approximately $3.2 billion to shareholders through dividends and share repurchases [10] - The company is exploring strategic alternatives for its Safety & Productivity segment to streamline focus on core business areas related to automation [11] - Management forecasts robust mid-single-digit growth in discrete and hybrid markets, supporting an optimistic outlook amid potential industry shifts [12]

Core Insights - Emerson Electric (EMR) reported revenue of $4.18 billion for the quarter ended December 2024, reflecting a year-over-year increase of 1.4% and an EPS of $1.38 compared to $1.22 a year ago, with an EPS surprise of +7.81% [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $4.21 billion, resulting in a revenue surprise of -0.91% [1] Financial Performance Metrics - Net Sales for Intelligent Devices totaled $2.84 billion, slightly below the average estimate of $2.86 billion, with a year-over-year change of +0.7% [4] - Net Sales for Software and Control reached $1.35 billion, compared to the average estimate of $1.36 billion, marking a +2.9% year-over-year change [4] - Net Sales for Intelligent Devices in Discrete Automation was $580 million, below the estimated $604.49 million, representing a -5.4% change year-over-year [4] - Net Sales for Intelligent Devices in Safety & Productivity was $312 million, compared to the estimated $318.79 million, reflecting a -3.1% change year-over-year [4] - Net Sales for Software and Control in Test & Measurement was $359 million, below the average estimate of $367.91 million [4] - Net Sales for Intelligent Devices in Final Control was $976 million, slightly above the estimated $969.86 million, with a +3.8% year-over-year change [4] - Net Sales for Software and Control in Control Systems & Software was $690 million, compared to the average estimate of $707.48 million, marking a +2.2% year-over-year change [4] - Net Sales for Software and Control in AspenTech was $303 million, exceeding the average estimate of $286.54 million, with a +17.9% year-over-year change [4] - Net Sales for Intelligent Devices in Measurement & Analytical was $975 million, slightly above the estimated $970.49 million, reflecting a +3% change year-over-year [4] - EBIT for Intelligent Devices totaled $686 million, exceeding the average estimate of $639.16 million [4] - EBIT for Intelligent Devices in Final Control was $236 million, above the three-analyst average estimate of $207.28 million [4] Stock Performance - Emerson Electric shares have returned +5.8% over the past month, outperforming the Zacks S&P 500 composite's +1.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Emerson Electric reported quarterly earnings of $1.38 per share, exceeding the Zacks Consensus Estimate of $1.28 per share, and showing an increase from $1.22 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was 7.81%, with the company having surpassed consensus EPS estimates in all four of the last quarters [2] - Revenues for the quarter were $4.18 billion, slightly missing the Zacks Consensus Estimate by 0.91%, but up from $4.12 billion year-over-year [3] - The company has topped consensus revenue estimates two times over the last four quarters [3] Stock Performance - Emerson Electric shares have increased approximately 3% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [4] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $1.43 for the coming quarter and $5.91 for the current fiscal year, with revenues expected to be $4.45 billion and $18.06 billion respectively [8] - The estimate revisions trend for Emerson Electric is currently mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [7] Industry Context - The Manufacturing - Electronics industry, to which Emerson Electric belongs, is currently in the top 33% of over 250 Zacks industries, suggesting a favorable environment for stock performance [9]

Financial Performance - For Q1 fiscal 2025, net sales were $4.2 billion, up 1% year-over-year, with underlying sales increasing by 2%[61] - Earnings from continuing operations attributable to common stockholders were $585 million, a 247% increase, with diluted earnings per share rising to $1.02, up 252% from $0.29 in the prior year[62] - Adjusted diluted earnings per share from continuing operations were $1.38, reflecting a 13% increase compared to $1.22 in the prior year[66] - Gross profit for Q1 fiscal 2025 was $2.2 billion, a 17% increase, with gross margin improving to 53.5%, up 7 percentage points[67] - Pretax earnings from continuing operations increased to $775 million, a 343% rise compared to the prior year[71] - Total sales for Software and Control were $1,352 million in Q1 2025, a 3% increase year-over-year, driven by strong growth in AspenTech[79] - Earnings for Software and Control rose to $195 million, a 434% increase, with a margin improvement of 11.6 percentage points to 14.4%[79] Expenses and Cash Flow - Selling, general and administrative (SG&A) expenses decreased to $1.2 billion, down 4%, with SG&A as a percentage of sales decreasing to 29.3%[69] - Operating cash flow from continuing operations was $777 million, up $333 million from the prior year, reflecting higher earnings[83] - Free cash flow from continuing operations was $694 million, an increase of $327 million compared to the previous year[83] Sales and Market Trends - Intelligent Devices sales were $2.8 billion, up 1%, with underlying sales increasing by 2% driven by higher prices and volume[78] - AspenTech sales increased by $46 million, or 18%, due to strong license revenue from renewals and new contracts[79] - Foreign currency translation had a 1% unfavorable impact on sales, with underlying sales up 1% in the U.S. and 3% internationally[67] Future Projections - For fiscal year 2025, consolidated net sales are expected to increase by 1.5% to 3.5%, with underlying sales up 3% to 5%[88] - Earnings per share for fiscal 2025 are projected to be between $4.42 and $4.62, with adjusted earnings per share expected to be between $5.85 and $6.05[89] - Operating cash flow for fiscal 2025 is anticipated to be between $3.6 billion and $3.7 billion, with free cash flow expected to be between $3.2 billion and $3.3 billion[89] Tax and Financial Ratios - The effective tax rate for Q1 fiscal 2025 was 24%, compared to 9% in the prior year, influenced by discrete tax benefits in the previous year[72] - The current ratio decreased to 1.5 as of December 31, 2024, reflecting a decrease in cash due to share repurchases[82] Acquisition - Emerson announced an agreement to acquire the remaining 43% of AspenTech for $265 per share, valuing the transaction at $7.2 billion[85]