Fourth-quarter gross margin was 27.1% , up 50 basis points year over year, attributed to higher private label penetration and disciplined purchasing and pricing execution. SG&A decreased 5% to $264 million, primarily due to lower variable costs from the shorter quarter and benefits from cost actions. Adjusted EBITDA in the quarter was $167 million , down 7%, while adjusted EBITDA margin improved 10 basis points to 10.6% .Chief Financial Officer Robyn Bradbury said fourth-quarter net sales decreased 7% to $1 ...

Company Performance - Emerson Electric (EMR) closed at $132.18, reflecting a -5.29% change from the previous day's closing price, underperforming the S&P 500's loss of 1.52% [1] - Over the past month, EMR shares have depreciated by 9.76%, compared to the Industrial Products sector's loss of 7.93% and the S&P 500's loss of 2.25% [1] Upcoming Financial Results - The upcoming EPS for Emerson Electric is projected at $1.55, indicating a 4.73% increase from the same quarter last year [2] - Revenue is anticipated to be $4.62 billion, reflecting a 4.32% increase compared to the same quarter last year [2] Fiscal Year Estimates - For the entire fiscal year, earnings are estimated at $6.5 per share and revenue at $18.98 billion, representing changes of +8.33% and +5.36% respectively from the previous year [3] - Recent modifications to analyst estimates are crucial as they reflect near-term business trends, with positive changes indicating analyst optimism [3] Valuation Metrics - Emerson Electric has a Forward P/E ratio of 21.48, which is a discount compared to the industry average of 25.11 [6] - The company has a PEG ratio of 2.23, while the average PEG ratio for the Manufacturing - Electronics industry is 1.92 [6] Industry Context - The Manufacturing - Electronics industry is part of the Industrial Products sector and holds a Zacks Industry Rank of 67, placing it in the top 28% of over 250 industries [7] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Insights - STS Industrial has been acquired by NEFCO, enhancing its operational capabilities and inventory [1][2] - The acquisition aims to meet the growing demands of the energy, chemical, and manufacturing sectors while maintaining established customer relationships [2][3] - This move reflects a broader trend of consolidation in the MRO and construction supply industries to improve supply chain efficiency and customer service [3] Company Overview - STS Industrial, founded in 1982 and headquartered in Sulphur, Louisiana, specializes in supplying industrial fasteners, gaskets, pipe supports, PVF, and cutting tools [6] - The company is known for its reliable service and technical expertise, serving critical operations in refinery and chemical facilities, oil and gas operators, and industrial contractors nationwide [6] Operational Impact - Day-to-day operations for STS Industrial customers will remain unchanged, with the same teams and locations continuing to provide service [4] - Customers will benefit from an expanded inventory and broader sourcing options due to NEFCO's national supply chain [4] - Over time, NEFCO's capabilities will be integrated to enhance service without disrupting existing customer relationships [4][5]

Core Insights - Harvey Partners disclosed a new position in DNOW, acquiring 1,939,399 shares valued at $25.70 million as of February 17, 2026 [1][2] Company Overview - DNOW Inc. is a leading distributor of energy and industrial products, operating a vast network across the U.S., Canada, and international markets [5] - The company specializes in providing essential solutions to energy infrastructure and industrial clients, leveraging its supply chain expertise and broad product portfolio [5] - DNOW's market capitalization is $2 billion, with a revenue of $2.82 billion and a net income of -$89 million for the trailing twelve months (TTM) [4] Recent Developments - DNOW recently completed the acquisition of MRC Global, which is expected to enhance its scale and long-term growth opportunities [9] - For 2025, DNOW reported revenue of $2.82 billion and adjusted EBITDA of $209 million, representing 7.4% of sales [9] Market Performance - As of the latest data, DNOW shares are priced at $12.33, reflecting an 18% decline over the past year, underperforming the S&P 500's approximate 16% gain during the same period [7] - The recent share price drop is attributed to integration risks and near-term challenges rather than a decline in underlying demand [10] Investment Implications - The new DNOW stake represents 2.3% of Harvey Partners' reportable 13F assets under management as of December 31, 2025 [7] - The investment strategy appears to focus on operationally leveraged businesses during transitional periods, with potential for long-term gains if merger synergies and energy infrastructure spending improve margins [10]

Company Overview - Flowserve is a leading manufacturer and aftermarket supplier of comprehensive flow control systems based in Irving, Texas [1] - The company operates in two segments: Flowserve Pump Division and Flowserve Control Division [1] - Flowserve's product portfolio includes pumps, valves, seals, and automation, serving various end markets such as oil and gas, chemical, power generation, water management, and general industrial industries [1] Leadership - Amy Schwetz, the CFO of Flowserve, joined the company in 2020 and previously held various positions at Peabody, culminating in a CFO role [2] Financials - Flowserve has 130 million shares trading at approximately $92, resulting in a market capitalization of $12 billion [3] - Following the recent acquisition of Trillium and the Valves division, the company has a net debt of $1.3 million, leading to a total enterprise value of $13.2 billion [3]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $959 million, up 51% or $325 million from Q3 2025, driven by MRC Global's contribution of $388 million during the stub period [28] - Full year 2025 revenue was $2.8 billion, an increase of $447 million or 19% from 2024, marking DNOW's fifth consecutive year of growth [28] - Adjusted EBITDA for Q4 was $61 million or 6.4% of revenue, while full year EBITDA was $209 million or 7.4% of revenue [28][29] - Legacy DNOW achieved a record full-year EBITDA of $199 million in 2025, with EBITDA as a percentage of revenue reaching 8.2% [10][11] Business Line Data and Key Metrics Changes - U.S. revenue for Q4 2025 totaled $765 million, with legacy DNOW's revenue at $467 million, down approximately 10% sequentially [29] - Canadian revenue for Q4 was $51 million, down 4% sequentially, while full year Canadian revenue was $214 million [29] - International revenue for Q4 was $143 million, with legacy DNOW International revenue at $53 million, down 7.5% year-over-year [30][31] Market Data and Key Metrics Changes - Upstream market activity is expected to remain flat to down, focusing on maintenance and efficiency rather than growth [19] - Midstream sector is benefiting from structural growth drivers, including natural gas infrastructure expansion and LNG development [19] - Gas utility market is expected to grow in 2026, with initiatives like the M-Tech gas meter solution aimed at increasing customer wallet share [20] Company Strategy and Development Direction - The merger with MRC Global is expected to significantly increase scale, diversify sector reach, and enhance competitive positioning across various markets [12] - The company aims to achieve $70 million in cost synergies within three years of the merger, with $23 million expected by the end of the first year [13] - Focus on operational improvements, including branch footprint optimization and investments in inventory systems, to enhance service levels [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ERP challenges impacting U.S. MRC Global operations but is optimistic about resolving these issues [16][19] - The company plans to delay guidance until operational stability is achieved, emphasizing the importance of integration and customer service [49] - Long-term growth is anticipated through improved competitiveness, better supplier relationships, and leveraging combined inventories [80] Other Important Information - The company changed its inventory valuation method to LIFO, which is expected to better reflect current costs [32] - Adjusted net income for Q4 was $23 million or $0.15 per share, down from $28 million or $0.26 per share in Q3 [39] - The balance sheet remains healthy with liquidity of $588 million and a leverage ratio of 1.2x [40] Q&A Session Summary Question: Impact of MRC's ERP transition on Q4 and resolution timeline - ERP issues are limited to U.S. MRC only, with notable revenue loss attributed to the implementation in Q3 and Q4 [55][56] - Management is focused on resolving core infrastructure issues and has mobilized resources to mitigate customer service impacts [58][59] Question: Growth expectations for 2026 - Upstream is expected to be flat to down, while midstream and gas utilities are anticipated to grow [61][63] - Management is confident in recovering lost revenue momentum as ERP issues are resolved [64] Question: Cost synergy targets and drivers - Improved cost synergy targets are driven by urgency to resolve ERP issues and fast-tracking migration to SAP [66] - Long-term opportunities for cost savings may exceed initial projections, but management is cautious about making definitive statements [68] Question: Long-term vision for revenue growth and profit margins - Overall business is expected to have flattish revenue, with opportunities for growth through synergies and acquisitions [77] - Long-term benefits from the merger include better competitiveness and improved margins in the 8% EBITDA range [80]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $959 million, up 51% or $325 million from Q3 2025, driven by $388 million from MRC Global contributions during the stub period [22] - Full year 2025 revenue totaled $2.8 billion, an increase of $447 million or 19% from 2024, marking the fifth consecutive year of growth for DNOW [22] - Adjusted EBITDA for Q4 was $61 million, or 6.4% of revenue, while full year EBITDA was $209 million, or 7.4% of revenue [22][23] - Legacy DNOW achieved a record full-year EBITDA of $199 million in 2025, with EBITDA as a percentage of revenue reaching 8.2% [8][9] Business Line Data and Key Metrics Changes - U.S. revenue for Q4 2025 was $765 million, with MRC Global contributing $298 million; legacy DNOW's revenue was $467 million, down approximately 10% sequentially [23] - Canadian revenue for Q4 was $51 million, down 4% sequentially, while full year Canadian revenue was $214 million [23] - International revenue for Q4 was $143 million, with legacy DNOW International revenue at $53 million, down 7.5% year-over-year [24] Market Data and Key Metrics Changes - Upstream market activity is expected to remain flat to down, focusing on maintenance and efficiency rather than growth [16] - Midstream sector benefits from structural growth drivers, including natural gas infrastructure expansion and LNG development [16] - Gas utility market is expected to grow in 2026, supported by modernization efforts [16] Company Strategy and Development Direction - The merger with MRC Global enhances scale, diversifies sector reach, and expands the addressable market, solidifying DNOW's competitive position [10] - The company aims to achieve $70 million in cost synergies within three years, with $23 million expected by the end of the first year [11] - Focus on integrating operations, optimizing supply chains, and capturing identified cost synergies while maintaining customer service [38] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ERP challenges impacting U.S. MRC Global operations but is optimistic about resolving these issues [12][14] - The company plans to reinstate guidance once operational stability is achieved, emphasizing the importance of integration and customer service [40][41] - Long-term growth is expected through improved competitiveness, better product availability, and enhanced relationships with suppliers [70] Other Important Information - The company changed its inventory valuation method to LIFO, which better reflects current costs due to commodity price fluctuations [26] - Transaction-related costs and foreign currency translation adjustments negatively impacted net loss in Q4, totaling $147 million [31] - The balance sheet remains healthy with $588 million in liquidity and a leverage ratio of 1.2x [32][33] Q&A Session Summary Question: Impact of MRC's ERP transition on Q4 and resolution timeline - Management indicated that ERP issues are limited to U.S. MRC only and have caused notable revenue declines in Q3 and Q4; efforts are underway to resolve these issues [47][48] Question: Growth expectations for 2026 - Management expects upstream markets to remain flat to down, while midstream and gas utilities are anticipated to grow; overall revenue is expected to be flattish [52][54] Question: Cost synergy targets and drivers - Improved cost synergy targets are driven by urgency to resolve ERP issues, with potential for exceeding initial savings projections [55][59] Question: Long-term vision for revenue growth and profit margins - Management envisions long-term growth through better competitiveness and improved supplier relationships, aiming for EBITDA margins in the 8% range [66][70] Question: Retaining key employees during ERP challenges - The company is focused on rewarding top talent and ensuring they are involved in decision-making to retain key employees during the transition [71][73]

Core Insights - The global backlog of unfilled aircraft orders exceeds 17,000 jets, with Boeing facing production delays that extend delivery timelines, resulting in an average fleet age of 15 years [1] - GE Aerospace and TransDigm Group are two major beneficiaries of this situation, each profiting in distinct ways [1] GE Aerospace - GE Aerospace has an installed base of approximately 80,000 commercial and military engines, generating service revenue of $24 billion in 2025, a 26% increase year-over-year, which constitutes 53% of total revenue [2] - Management projects $8.2 billion in free cash flow (FCF) for 2026, with FCF conversion exceeding 100%, and maintains a clean balance sheet compared to TransDigm's higher leverage [4] - GE trades at about 43 times estimated 2026 earnings, reflecting a market expectation of flawless execution and a pure-play razor-and-blade model [5] - GE generated $7.3 billion in free cash flow in fiscal 2025, with a gross margin of 36.64% and a dividend yield of 0.43% [10][11] TransDigm Group - TransDigm specializes in manufacturing thousands of small, mission-critical components for aircraft, holding a sole-source and proprietary position for many parts, which grants significant pricing power [6] - The company reported an operating margin of 47.2% in fiscal 2025, significantly higher than GE's 21.4%, and returned $5 billion to shareholders through special dividends [7] - TransDigm's leverage is more than four times that of GE, and its pricing model has faced regulatory scrutiny [7] - TransDigm produced $1.8 billion in free cash flow, with a forward price-to-earnings (P/E) ratio of approximately 32 times [11] Investment Considerations - GE is positioned as a safer investment option, appealing to those willing to pay a premium for stability, while TransDigm attracts investors seeking higher profitability despite its debt levels [12]

Core Viewpoint - Emerson Electric Co. (NYSE:EMR) is recognized as a significant player in the industrial machinery sector, with a notable increase in its stock price over the past year and year-to-date [2]. Group 1: Company Overview - Emerson Electric Co. is one of the largest industrial machinery manufacturers globally, producing a range of products including valves, actuators, and cylinders [2]. - The company's shares have appreciated by 17% over the past year and by 8% year-to-date [2]. Group 2: Analyst Insights - JPMorgan expressed interest in Emerson Electric Co. for its potential to deliver growth during the earnings cycle [2]. - Evercore ISI initiated coverage of Emerson Electric Co. in mid-December, setting a price target of $170 and an Outperform rating, citing growth in portfolio quality due to strategic initiatives [2]. - Evercore highlighted the company's automation and software products as key drivers for exposure to growth markets [2]. Group 3: Jim Cramer's Commentary - Jim Cramer acknowledged a previous misjudgment regarding Emerson Electric Co., particularly concerning its acquisition strategy [3]. - Cramer noted that Emerson is involved in critical sectors such as data centers and electricity, indicating a potential for recovery and growth [3].

Core Viewpoint - DNOW Inc. has scheduled a conference call to discuss its financial results for the fourth quarter and full-year 2025, indicating a proactive approach to investor communication and transparency [1]. Group 1: Conference Call Details - The conference call is set for February 20, 2026, at 8:00 am (US Central Time) [1]. - Financial results for the fourth quarter and the year ending December 31, 2025, will be released before the market opens on the same day [1]. - The call will be available via the Investor Relations link on DNOW's website and will be listen-only [1]. Group 2: Company Overview - DNOW Inc. is a leading provider of energy and industrial solutions with over 160 years of experience in distributing pipe, valves, fittings (PVF), gas products, pumps, and fabricated equipment [1]. - The company is headquartered in Houston, Texas, and employs approximately 5,300 individuals, supported by a global distribution and engineering network [1]. - DNOW offers a comprehensive range of supply chain solutions and technical product expertise, enhanced by advanced digital offerings [1].