Q2 2025 Performance Highlights - Emerson's underlying orders grew by 4%, with positive contributions from all regions[7] - Process and hybrid businesses increased by 6%, while Test & Measurement (T&M) rose by 8%[7] - Underlying sales grew by 2%, reaching the top of the guided range[7] - Adjusted EPS exceeded the high end of guidance by $006, reaching $148[7, 13] - Free cash flow reached $738 million[13] - Adjusted Segment EBITA Margin was 280%[13] Updated 2025 Guidance - The company expects underlying sales to grow by approximately 4%[9] - The adjusted EPS midpoint is raised to a range of $590 - $605[9] - Free cash flow is updated to $31 billion - $32 billion[9] - The company plans to return $23 billion to shareholders through dividends and share repurchases[9] Tariff Impact and Mitigation - Emerson faces approximately $245 million in tariff exposure for 2025, but expects to fully mitigate the earnings impact[11]

Financial Performance - For Q2 fiscal 2025, net sales were $4.4 billion, up 1% year-over-year, with underlying sales increasing by 2%[63]. - Earnings from continuing operations attributable to common stockholders were $485 million, down 11%, with diluted earnings per share at $0.86, down 9% from $0.95 in the prior year[64][75]. - Adjusted diluted earnings per share from continuing operations increased to $1.48, up 9% from $1.36 in the prior year, reflecting strong operating results[64][75]. - Gross profit for Q2 fiscal 2025 was $2.37 billion, a 4% increase from the prior year, with a gross margin of 53.5%, up 1.3 percentage points[69][70]. - Net sales for the first six months of 2025 were $8,608 million, a 1% increase compared to 2024, with Software and Control sales up 5%[84]. - Gross profit for the first six months of 2025 was $4,606 million, reflecting a 10% increase and a gross margin of 53.5%, up 4.0 percentage points[84]. - Earnings from continuing operations before income taxes increased by 58% to $1,404 million, with a margin of 16.3%[88]. - Diluted EPS from continuing operations rose to $1.88, a 52% increase compared to $1.24 in 2024[90]. - Adjusted EBITA from continuing operations was $2,239 million, a 10% increase, with a margin of 26.0%[95]. Segment Performance - Intelligent Devices sales decreased by 1% to $3.03 billion, with underlying sales flat due to slightly lower volume offset by higher prices[80]. - Software and Control sales reached $1,421 million in Q2 2025, a 7% increase year-over-year, driven by a 10% growth in Control Systems & Software[81]. - Earnings for Software and Control increased by $151 million, up 240%, with a margin improvement of 10.4 percentage points[81]. - Intelligent Devices sales were $5.9 billion in the first six months of 2025, flat compared to the prior year, with underlying sales increasing 1 percent[97]. - Software and Control sales increased to $2,773 million in the first six months of 2025, reflecting a 5 percent increase compared to the prior year[98]. - Earnings for Intelligent Devices rose to $1,412 million, an increase of $86 million or 6 percent, with a margin increase of 1.5 percentage points to 24.0 percent[97]. - Adjusted EBITA for Software and Control increased by 27 percent to $886 million, with an adjusted EBITA margin of 32.0 percent, up 5.6 percentage points[98]. Expenses and Margins - Selling, general and administrative (SG&A) expenses decreased to $1.28 billion, down 1% year-over-year, with SG&A as a percentage of sales at 28.9%, a decrease of 0.7 percentage points[69][70]. - SG&A expenses decreased by $67 million to $2,506 million, with SG&A as a percentage of sales down to 29.1%[86]. Tax and Currency Impact - The effective tax rate for Q2 fiscal 2025 was 32%, impacted by $49 million of discrete tax items related to the AspenTech transaction[74]. - The effective tax rate for the first six months of 2025 was 27%, impacted by discrete tax items related to the AspenTech transaction[89]. - Foreign currency translation had a 1% unfavorable impact on sales, with underlying sales up 2% in both the U.S. and internationally[69]. Future Outlook - The company expects consolidated net sales from continuing operations to increase approximately 4 percent for fiscal year 2025[107]. - Earnings per share for fiscal year 2025 are projected to be between $4.05 and $4.20, with adjusted earnings per share expected to be between $5.90 and $6.05[107]. - The company plans to return approximately $2.3 billion to shareholders through share repurchases and dividend payments in fiscal 2025[108]. - The company anticipates a targeted reduction in net debt of approximately $1 billion over the next 6-12 months[102]. Debt and Capital Structure - Total debt-to-total capital ratio increased to 42.7 percent as of March 31, 2025, reflecting increased borrowings for the AspenTech transaction[100].

Financial Performance - Net sales for Q2 2025 were $4,432 million, a 1% increase from $4,376 million in Q2 2024[1] - Adjusted earnings per share (EPS) rose by 9% to $1.48 in Q2 2025, compared to $1.36 in Q2 2024[1] - Operating cash flow increased by 13% to $825 million in Q2 2025, up from $733 million in Q2 2024[1] - Free cash flow for Q2 2025 was $738 million, reflecting a 14% increase from $651 million in Q2 2024[1] - Adjusted segment EBITA margin improved to 28.0% in Q2 2025, up from 26.0% in Q2 2024[1] - Net earnings for the six months ended March 31, 2025, increased to $1,022 million from $635 million in 2024, representing a growth of 60.7%[17] - Total sales for the quarter ended March 31, 2025, were reported at $4,432 million, a 1% increase compared to $4,376 million in 2024[21] - Adjusted total segment EBITA for the quarter ended March 31, 2025, was $1,240 million, up from $1,139 million in 2024, reflecting a margin increase from 26.0% to 28.0%[28] - Adjusted EBITA for Q2 2025 was $1,143 million, representing a 25.8% margin compared to $1,072 million and a 24.5% margin in Q2 2024[36] - GAAP pretax earnings for Q2 2025 were $629 million, with a margin of 14.2%, down from $711 million and 16.3% in Q2 2024[36] Cash Flow and Investments - Operating cash flow expectations for fiscal 2025 are updated to between $3.5 billion and $3.6 billion[3] - Free cash flow expectations for fiscal 2025 are projected to be between $3.1 billion and $3.2 billion[3] - Cash provided by operating activities for the six months ended March 31, 2025, was $1,018 million, a decrease from $1,158 million in 2024[17] - Cash used in investing activities for the six months ended March 31, 2025, was $264 million, significantly lower than $8,489 million in 2024, indicating reduced investment activity[17] - The company’s ending cash and equivalents decreased to $1,887 million as of March 31, 2025, down from $2,318 million in 2024[17] Acquisitions and Integration - The completion of the AspenTech acquisition was noted, with significant progress on integration[2] - The company acquired AspenTech on March 12, 2025, integrating it as an independent business unit within the Control Systems & Software segment[23] Shareholder Returns - The company plans to return approximately $2.3 billion to shareholders through $1.1 billion in share repurchases and $1.2 billion in dividends[3] Sales Growth and Market Performance - Sales growth in the Americas for the six months ended March 31, 2025, was 3%, while Europe experienced a decline of 2%[26] - The Control Systems & Software segment reported sales of $2,055 million for the six months ended March 31, 2025, an increase of 8% from $1,897 million in 2024[25] - The company experienced a 2% underlying sales growth in Q2 2025, with a favorable foreign exchange impact of 1%[40] - The underlying sales growth guidance for 2025 is projected at 3.5% - 4.5%[40] Costs and Expenses - Acquisition/divestiture fees and related costs for Q2 2025 amounted to $168 million, compared to $20 million in Q2 2024[36] - Amortization of intangibles for Q2 2025 was $278 million, down from $322 million in Q2 2024[36] - Restructuring and related costs for Q2 2025 were $22 million, slightly up from $21 million in Q2 2024[41]

Industry Overview - The Zacks Manufacturing - Electronics industry is poised for growth due to steady demand in electronic services, increased adoption of advanced manufacturing technologies, and product innovation efforts [1] - A surge in e-commerce activities is expected to further support the industry's growth [1] Current Challenges - A slowdown in manufacturing activities and a contraction in new orders may negatively impact industry performance [2] - The Manufacturing Purchasing Manager's Index fell to 48.7% in April, indicating contraction, while the New Orders Index registered 47.2% for the third consecutive month [4] Market Trends - Despite manufacturing slowdowns, demand remains stable in key end markets, particularly in medical and life sciences, driven by the integration of advanced electronic components [5] - The industry is benefiting from technological advancements and digitization, enhancing operational productivity and product quality [6] Industry Performance - The Zacks Manufacturing - Electronics industry currently holds a Zacks Industry Rank of 66, placing it in the top 27% of 246 Zacks industries, indicating bullish near-term prospects [7][8] - Over the past year, the industry has underperformed compared to the broader sector and the S&P 500, losing 17.7% against the sector's decline of 7% and the S&P 500's growth of 9.7% [10] - However, the industry rebounded in the past month with a 15.1% increase, outperforming both the sector's and S&P 500's growth [10] Valuation Metrics - The industry is currently trading at a forward 12-month Price-to-Earnings (P/E) ratio of 21.19X, slightly above the S&P 500's 20.97X and the sector's 17.94X [13] Notable Companies - **Eaton Corporation plc (ETN)**: Benefits from improving end market conditions and strong demand in AI data centers, with shares rebounding 18.3% in the past month [19][20] - **Emerson Electric Co. (EMR)**: Witnessing solid momentum in its Intelligent Devices and Software segments, with shares gaining 0.9% in the past year [23][25] - **EnerSys (ENS)**: Positioned to benefit from product innovation and trends like 5G expansion, with shares rebounding 11.9% in the past month [28][29] - **Powell Industries, Inc. (POWL)**: Experiencing favorable trends in oil, gas, and petrochemical markets, with shares gaining 21.1% in the past year [32][34]

Core Insights - Emerson Electric Co. (EMR) is expected to report growth in both revenue and earnings for the second quarter of fiscal 2025, with revenue estimated at $4.38 billion, reflecting a 0.1% increase year-over-year, and earnings per share projected at $1.42, a 4.4% rise from the previous year [1][3]. Group 1: Performance Expectations - The Intelligent Devices segment is anticipated to see a slight revenue decrease of 0.1% to $3.06 billion, influenced by strong performance in the final control business and solid momentum in power end markets [3][4]. - The Software and Control segment is expected to grow by 0.6% year-over-year to $1.34 billion, driven by robust growth in the Control Systems & Software business and increased license revenues from AspenTech [5]. Group 2: Recent Acquisitions - The acquisition of Afag and Flexim in Q4 of fiscal 2023 has enhanced Emerson's capabilities in factory automation and flow measurement, expanding its reach into high-demand markets such as battery manufacturing and automotive [6]. - The recent acquisition of National Instruments in October 2023 is likely to further strengthen Emerson's position in high-growth sectors, including semiconductors and electric vehicles [7]. Group 3: Cost and Margin Considerations - Rising costs associated with acquisitions and restructuring efforts may negatively impact EMR's margin performance, alongside potential foreign currency headwinds affecting profitability [8]. Group 4: Earnings Predictions - The company has a positive Earnings ESP of +2.42%, with the most accurate estimate at $1.45 per share, suggesting a strong likelihood of an earnings beat [10].

Core Viewpoint - Emerson Electric (EMR) is expected to report quarterly earnings of $1.42 per share, reflecting a 4.4% increase year-over-year, with revenues projected at $4.38 billion, a slight increase of 0.1% compared to the previous year [1]. Earnings Estimates - The consensus EPS estimate has been revised downward by 0.1% over the past 30 days, indicating a collective reassessment by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts forecast 'Net Sales- Intelligent Devices- Total' at $3.06 billion, indicating a year-over-year change of -0.1% [5]. - 'Net Sales- Software And Control- Total' is expected to reach $1.35 billion, reflecting a 1% increase from the prior-year quarter [5]. - 'Net Sales- Intelligent Devices- Discrete Automation' is projected at $610.20 million, showing a decline of 3.5% from the year-ago quarter [5]. - 'Net Sales- Intelligent Devices- Safety & Productivity' is estimated at $355.61 million, down 2.6% year-over-year [6]. - 'Net Sales- Software and Control- Test & Measurement' is expected to be $355.83 million, indicating a 3% decrease from the prior-year quarter [6]. - 'Net Sales- Intelligent Devices- Final Control' is projected to reach $1.07 billion, reflecting a 1.8% increase from the prior-year quarter [7]. - 'Net Sales- Software and Control- Control Systems & Software' is expected at $696.17 million, indicating a 1.3% year-over-year change [7]. - 'Net Sales- Software and Control- AspenTech' is projected at $293.30 million, reflecting a 5.5% increase year-over-year [8]. - 'Net Sales- Intelligent Devices- Measurement & Analytical' is expected to be $1.02 billion, indicating a 0.7% increase from the prior-year quarter [8]. Stock Performance - Over the past month, Emerson Electric shares have recorded a return of +3.9%, contrasting with the Zacks S&P 500 composite's -0.5% change [8]. - Based on its Zacks Rank 3 (Hold), EMR is expected to perform in line with the overall market in the upcoming period [8].

Company Performance - Emerson Electric (EMR) closed at $105.28, reflecting a +0.22% change from the previous day, underperforming the S&P 500's gain of 0.74% [1] - Over the past month, EMR shares have decreased by 6.27%, outperforming the Industrial Products sector's decline of 6.87% but lagging behind the S&P 500's loss of 4.77% [2] Upcoming Financial Results - Emerson Electric is set to announce its earnings on May 7, 2025, with an expected EPS of $1.42, representing a 4.41% increase from the same quarter last year [3] - The consensus estimate projects revenue of $4.38 billion, indicating a 0.1% rise from the equivalent quarter last year [3] Full Year Projections - For the full year, Zacks Consensus Estimates forecast earnings of $5.93 per share and revenue of $17.79 billion, showing increases of +8.01% and +1.73% respectively from the previous year [4] - Recent analyst estimate revisions suggest a positive outlook for the company's business operations and profit generation capabilities [4] Valuation Metrics - Emerson Electric is currently trading at a Forward P/E ratio of 17.7, which is lower than the industry's average Forward P/E of 19.95 [7] - The company's PEG ratio stands at 2.08, compared to the Manufacturing - Electronics industry's average PEG ratio of 1.71 [7] Industry Context - The Manufacturing - Electronics industry is part of the Industrial Products sector and holds a Zacks Industry Rank of 56, placing it in the top 23% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Company Performance - Emerson Electric (EMR) closed at $99.57, with a daily increase of +0.91%, outperforming the S&P 500's gain of 0.13% [1] - Over the past month, Emerson Electric's shares declined by 12.21%, underperforming the Industrial Products sector's loss of 10.03% and the S&P 500's loss of 6.3% [2] Earnings Projections - Emerson Electric is set to release its earnings on May 7, 2025, with projected EPS of $1.42, indicating a 4.41% increase year-over-year [3] - The consensus estimate for revenue is $4.38 billion, reflecting a 0.1% rise from the same quarter last year [3] - For the entire fiscal year, earnings are projected at $5.93 per share and revenue at $17.79 billion, representing increases of +8.01% and +1.73% respectively from the prior year [4] Analyst Estimates and Valuation - Recent changes in analyst estimates for Emerson Electric are crucial as they indicate shifts in near-term business trends [5] - The Zacks Rank system, which evaluates estimate changes, currently rates Emerson Electric at 3 (Hold) [7] - Emerson Electric has a Forward P/E ratio of 16.63, which is lower than the industry average of 17.86, suggesting it is trading at a discount [8] Industry Context - Emerson Electric has a PEG ratio of 1.96, compared to the Manufacturing - Electronics industry's average PEG ratio of 1.62 [9] - The Manufacturing - Electronics industry is ranked 35 in the Zacks Industry Rank, placing it in the top 15% of over 250 industries [10]

Group 1: Company Performance - Emerson Electric Co. is experiencing solid momentum in its Intelligent Devices and Software and Control segments, with sales in the Final Control business increasing by 4% year over year in Q1 of fiscal 2025 [1] - The Measurement & Analytical business also saw a 3% year-over-year sales increase in the fiscal first quarter, supported by robust growth across geographies and strong backlog conversion levels [2] - The Software and Control segment reported a 2% year-over-year revenue increase in the fiscal first quarter, driven by strength in power and process end markets [2] Group 2: Future Outlook - Emerson has provided a bullish forecast for fiscal 2025, expecting net sales to increase approximately 1.5-3.5% year over year, with underlying sales anticipated to rise by 3-5% [3] Group 3: Acquisitions and Growth Strategy - The company is focused on expanding its market presence through acquisitions, having acquired all outstanding shares of Aspen Technology, Inc. in March 2025, increasing its ownership from 55% to around 57% [4] - In Q4 of fiscal 2023, Emerson completed acquisitions of Afag and Flexim, which enhanced its capabilities in factory automation and measurement, contributing positively to underlying sales growth by 9% in fiscal 2024 [5] Group 4: Shareholder Returns - Emerson's shareholder-friendly policies include $301 million in dividends and $899 million in share repurchases in the first three months of fiscal 2025, with plans to repurchase $2 billion in shares and pay out $1.2 billion in dividends for the fiscal year [6] Group 5: Challenges - Despite positive performance in certain segments, Emerson is facing challenges in its Safety & Productivity, Discrete Automation, and Test & Measurement businesses, with sales declines of 3%, 5%, and 6% respectively in the fiscal first quarter [9][10] - The company is undertaking restructuring measures to improve operational efficiency, which incurred costs of $12.9 million in the fiscal first quarter [11]

Core Insights - Emerson's annual NI Connect conference will take place from April 28-30, 2025, in Fort Worth, Texas, focusing on advancements in test and measurement technology [1][2] - The event will feature keynote presentations, live demonstrations, and educational sessions aimed at showcasing how integrated hardware and software approaches can enhance product testing and development [3][4] Event Details - The conference will gather engineers, researchers, and business leaders to discuss the future of test and measurement, including NI's Intelligent Test vision and advancements in platforms like NI LabVIEW, NI DAQ, and NI PXI [2][4] - Registration includes access to all sessions, certified training, meals, exhibitions, and social events [6] Keynote Speakers and Topics - Archer Aviation will discuss the use of NI's hardware-in-the-loop simulation platforms for validating their eVTOL aircraft, Midnight [7] - Milwaukee Tool will showcase their transformation of test automation for 24/7 tool life testing [7] - Qualcomm will present on standardizing NI's PXI-based test platforms for scalable validation of RF and PMIC devices [7] - The University of Texas will share insights on their student-led rocket engineering projects utilizing LabVIEW [7] Additional Highlights - Keynote presentations will feature leaders from Fortune 500 companies sharing success stories on how NI's test tools provide a strategic advantage [8] - New product announcements for NI DAQ, LabVIEW, and PXI will be made during the conference [8] - Networking opportunities will be available for attendees to engage with industry experts and explore best practices in advanced test and measurement [8]