Emerson(EMR) - 2025 Q1 - Quarterly Report

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]