Core Insights - Emerson Electric, an engineering solutions provider, reported a 4% year-over-year increase in sales to $4.55 billion, which fell short of analysts' expectations of $4.6 billion [1] - The company experienced a significant net profit increase of 78% year-over-year, reaching $586 million, with adjusted earnings per share (EPS) of $1.52, slightly above expectations [1] - For the fourth fiscal quarter, Emerson Electric anticipates a sales growth of 5.5% to 6.5%, with adjusted EPS projected between $1.58 and $1.62, compared to analysts' expectation of $1.62 [1]

Core Viewpoint - Emerson Electric reported quarterly earnings of $1.52 per share, exceeding the Zacks Consensus Estimate of $1.51 per share, and showing an increase from $1.43 per share a year ago [1][2] Financial Performance - The company achieved revenues of $4.55 billion for the quarter ended June 2025, which was 0.6% below the Zacks Consensus Estimate, but an increase from $4.38 billion year-over-year [3] - Over the last four quarters, Emerson Electric has surpassed consensus EPS estimates four times and topped revenue estimates twice [2][3] Stock Performance - Emerson Electric shares have increased approximately 13.4% since the beginning of the year, outperforming the S&P 500's gain of 7.1% [4] - The current Zacks Rank for Emerson Electric is 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is $1.63 on revenues of $4.9 billion, and for the current fiscal year, it is $6.00 on revenues of $18.09 billion [8] - The outlook for the Manufacturing - Electronics industry is positive, with the industry currently ranking in the top 26% of over 250 Zacks industries [9]

Financial Data and Key Metrics Changes - Adjusted earnings per share (EPS) for the quarter was $1.52, which met the top end of guidance and represented a 6% year-over-year growth [11][22] - Underlying sales growth was 3%, with a strong performance in Process and Hybrid businesses, which grew 3.5%, while discrete businesses turned positive, up 2% year over year [20][22] - Free cash flow generation was better than expected at $970 million, resulting in a margin of 21.3% [22][26] Business Line Data and Key Metrics Changes - Industrial Software annual contract value (ACV) grew double digits year-over-year, ending the quarter at $1.5 billion [10] - Test and Measurement orders were up 16%, contributing to a 6% growth in underlying orders for discrete businesses [15][20] - Software and Control grew 2%, while Intelligent Devices was up 3% [20] Market Data and Key Metrics Changes - Underlying orders in the Americas grew 7%, while Asia and the Middle East and Africa saw a 2% increase, and Europe experienced a decline of 7% [21] - The demand for LNG, power, and life sciences is driving significant activity, with underlying orders in the Ovation business up 40% in the quarter [14][15] - The tariff environment improved, with the annualized gross incremental tariff impact reduced to approximately $210 million from a prior estimate of $455 million [18][19] Company Strategy and Development Direction - Emerson is focused on innovation in automation, highlighted by collaborations such as the one with Total Energies to enhance operational performance through advanced data solutions [6][10] - The company aims to leverage its differentiated technology to serve diverse industries and create value for investors [5][6] - Future growth is expected to be supported by strong demand in LNG, power generation, and life sciences, with a healthy outlook for underlying orders [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of discrete markets, expecting underlying sales growth of 5% to 6% in the fourth quarter [12][16] - The company anticipates strong exit rates for underlying orders to support sales growth within its growth framework [12][16] - Management noted that the dynamic tariff environment has improved, allowing for eased surcharges and better pricing actions [19][22] Other Important Information - Emerson's backlog increased to $7.6 billion, with a book-to-bill ratio of one for the quarter [21] - The company plans to host an investor conference on November 20 in New York City to discuss its transport portfolio and value creation framework [12] Q&A Session Summary Question: Can you clarify the margins in Intelligent Devices? - Management noted that tariffs and unexpected foreign exchange impacts affected margins, but excluding these, margins were up 20 basis points [32] Question: How did orders trend in May and June? - Management indicated that MRO bookings remained consistent, while capital bookings fluctuated based on timing [43] Question: What is the outlook for the discrete side of the business? - Management highlighted that the recovery in Test and Measurement is strong, while legacy discrete markets are facing challenges, particularly in automotive and packaging [74][76] Question: What is the expected growth rate for the power vertical? - Management believes the growth rate can remain elevated in the high teens over the next couple of years due to strong visibility in generation and transmission distribution markets [83][84] Question: How has the dialogue with customers changed regarding large projects? - Management reported no slowdown in decision-making or approvals for projects in LNG, power, and life sciences, maintaining a consistent project win rate [90][91] Question: Can you provide an update on the Ovation AI rollout? - Management confirmed that the Ovation Virtual Advisor has been launched and is already seeing good customer adoption [109]

Financial Data and Key Metrics Changes - The company reported underlying sales growth of 3% for the quarter, with adjusted earnings per share of $1.52, which grew 6% year over year [19][21][24] - Adjusted segment EBITDA margin was 27.1%, meeting expectations, and was negatively impacted by tariffs [21][24] - Free cash flow generation was better than expected at $970 million, resulting in a margin of 21.3% [21][24] Business Line Data and Key Metrics Changes - Industrial Software annual contract value (ACV) grew double digits year over year, ending the quarter at $1.5 billion [8] - Process and Hybrid businesses saw underlying orders grow mid single digits, while Test and Measurement orders were up 16% [8][12] - MRO sales remained strong at 62% of total sales, driven by software and cybersecurity upgrades [9] Market Data and Key Metrics Changes - Underlying orders in North America, India, and the Middle East and Africa showed strong growth, while Europe experienced a decline of 7% [20] - The company expects underlying sales growth of 5% to 6% in the fourth quarter, driven by improvements in Test and Measurement and sustained growth in Process and Hybrid businesses [10][14] - The tariff environment improved, with the annualized gross incremental tariff impact reduced to approximately $210 million [17][18] Company Strategy and Development Direction - The company is focused on innovation, highlighted by collaborations with Total Energies and the launch of AI-enabled products [5][6] - The demand outlook remains healthy, with expectations for continued growth in LNG, power generation, and life sciences [12][14] - The company plans to host an investor conference to discuss its transport portfolio and value creation framework [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in discrete markets and the overall demand for automation [10][12] - The company anticipates strong exit rates for underlying orders to support sales growth in fiscal 2026 [10][14] - Management noted that the tariff environment has improved, leading to better visibility and decision-making from customers [86] Other Important Information - The company has a project funnel of $11.2 billion, with consistent project wins of $350 million to $400 million per quarter [87] - The Ovation AI-enabled Virtual Advisor has been launched and is already seeing customer adoption [106] Q&A Session Summary Question: Can you elaborate on the margins in Intelligent Devices? - Management noted that tariffs and unexpected foreign exchange impacts affected margins, but underlying performance was positive [31][32] Question: What is driving the recovery in Test and Measurement? - The recovery is broad-based across segments, with strong performance in aerospace, defense, and semiconductors [34][35] Question: How did orders trend in May and June? - Orders remained consistent, with MRO bookings steady throughout the quarter [41][42] Question: What is the outlook for the power vertical? - Management believes sustainable growth rates can remain elevated in the high teens for the next couple of years [78][80] Question: How has the dialogue with customers changed regarding large projects? - There has been no slowdown in decision-making for projects in LNG, power, and life sciences [86][87] Question: What is the order outlook for Q4? - The company expects underlying sales growth of 5% to 7%, driven by various business segments [111]

Q3 2025 Performance - Underlying sales growth was 3%[13], impacted by reduced pricing actions due to improved tariff exposure[13] - Adjusted EPS of $1.52 met the top end of guidance[13] - Free cash flow generation exceeded expectations, yielding a 21.3% margin[11] Orders and Demand - Underlying orders grew by 4%[13]; Test & Measurement orders increased by 16%[13] - Strong demand continues in process and hybrid markets, with discrete markets showing recovery[10] - Industrial software saw strong demand, with Annual Contract Value (ACV) at $1.5 billion, up 10% year-over-year[10] Q4 2025 Guidance - Expects underlying sales growth between 5% and 6%[11], driven by Test & Measurement recovery and automation investments[11] - Anticipates an adjusted segment EBITA margin of approximately 27%[11], higher than previously expected due to lower tariff exposure[11] - Projects adjusted EPS of $1.58 to $1.62, representing a 7% to 10% year-over-year increase[11] Tariff Mitigation - Reduced tariff exposure by approximately $210 million annualized[21], expecting full offset[21] - Gross tariffs are estimated at $455 million annualized[22], with mitigations of approximately $130 million[22] through price and supply chain actions[22] Full Year 2025 Guidance - Free Cash Flow raised to approximately $3.2 billion[32], with an ~18% margin[32] - Price is now expected to contribute ~2.5 percentage points due to the improved tariff environment[32]

Financial Performance - Emerson's consolidated net sales for Q3 fiscal 2025 were $4.6 billion, a 4% increase compared to the prior year, with underlying sales up 3%[70]. - Earnings from continuing operations attributable to common stockholders were $580 million, up 68%, with diluted earnings per share increasing to $1.03, a 72% rise from $0.60 in the prior year[71][82]. - Adjusted diluted earnings per share from continuing operations were $1.52, reflecting a 6% increase compared to $1.43 in the prior year, driven by sales growth and strong operating performance[82]. - Gross profit for Q3 fiscal 2025 was $2.4 billion, a 3% increase, with a gross margin of 52.6%, down 0.2 percentage points from the prior year[76][77]. - Pretax earnings from continuing operations were $734 million, a 61% increase compared to the prior year, reflecting strong performance across segments[80]. - Earnings from continuing operations before income taxes for the first nine months of 2025 were $2.1 billion, a 59% increase compared to the prior year[103]. - Diluted earnings per share from continuing operations increased to $2.91, up 58% from $1.84 in 2024[98]. Sales Performance - Intelligent Devices sales reached $3.1 billion, a 4% increase, with underlying sales up 3% driven by a 2.5% price increase and 0.5% higher volume[87]. - Software and Control sales reached $1.4 billion in Q3 2025, a 3% increase year-over-year, with underlying sales up 2% driven by higher prices[88]. - Net sales for the first nine months of 2025 were $13.2 billion, a 2% increase compared to 2024, with Software and Control sales up 4%[91]. - Intelligent Devices sales for the first nine months of 2025 were $9.0 billion, an increase of $117 million, or 1 percent, driven by a 4 percent increase in the Americas[105]. - Software and Control sales reached $4,217 million in the first nine months of 2025, an increase of $173 million, or 4 percent, with Control Systems & Software sales up 7 percent[107]. Cost and Expenses - Selling, general and administrative (SG&A) expenses were $1.3 billion, a 1% increase, while SG&A as a percentage of sales decreased to 27.8%[78]. - SG&A expenses decreased by 1% to $3.8 billion, with SG&A as a percentage of sales improving to 28.7%[91]. - Earnings for Software and Control increased by $112 million, or 87%, with a margin improvement of 7.5 percentage points, attributed to cost reduction actions and lower amortization costs[88]. Adjusted Metrics - Adjusted EBITA from continuing operations was $1.2 billion, a 2% increase, with an adjusted EBITA margin of 26.0%[85]. - Adjusted EBITA for the first nine months of 2025 was $3.4 billion, a 7% increase, with an adjusted EBITA margin of 26.0%[103]. - Adjusted EBITA for Software and Control rose by 21 percent to $1,356 million, with an adjusted EBITA margin of 32.2 percent, an increase of 4.4 percentage points[107]. Cash Flow and Debt - Operating cash flow from continuing operations for the first nine months of fiscal 2025 was $2,664 million, an increase of $420 million compared to the prior year[113]. - Free cash flow from continuing operations was $2,401 million, reflecting an increase of $408 million compared to $1,993 million in 2024[113]. - Total debt-to-total capital ratio increased to 41.7 percent as of June 30, 2025, compared to 26.2 percent as of September 30, 2024, due to increased borrowings for the AspenTech transaction[110]. Future Outlook - The company expects consolidated net sales for fiscal year 2025 to increase by approximately 3.5 percent, with earnings per share projected at approximately $4.08[116]. - The company plans to return approximately $2.3 billion to shareholders through share repurchases of $1.1 billion and dividend payments of $1.2 billion[117]. - The interest coverage ratio improved to 9.6X for the 12 months ended June 30, 2025, compared to 8.5X for the same period in 2024[111]. Acquisitions - The acquisition of AspenTech for approximately $7.2 billion was completed, and its results are now consolidated into the Control Systems & Software segment[69].

| (dollars in millions, except per share) | 2024 Q3 | 2025 Q3 | Change | | --- | --- | --- | --- | | 2 Underlying Orders | | | 4% | | Net Sales | $4,380 | $4,553 | 4% | | 3 Underlying Sales | | | 3% | | Pretax Earnings | $455 | $734 | | | Margin | 10.4% | 16.1% | 570 bps | | 4 Adjusted Segment EBITA | $1,189 | $1,232 | | | Margin | 27.1% | 27.1% | 0 bps | | GAAP Earnings Per Share | $0.60 | $1.03 | 72% | | 5 Adjusted Earnings Per Share | $1.43 | $1.52 | 6% | | Operating Cash Flow | $1,067 | $1,062 | —% | | ...

Core Viewpoint - Emerson reported strong third-quarter results for fiscal 2025, showcasing growth in net sales, earnings, and cash flow, while also providing an optimistic outlook for the remainder of the fiscal year [1][2][3]. Financial Performance - Net Sales for Q3 2025 reached $4,553 million, a 4% increase from Q3 2024's $4,380 million [1]. - Pretax Earnings increased significantly to $734 million in Q3 2025 from $455 million in Q3 2024, reflecting a margin improvement from 10.4% to 16.1% [1][36]. - GAAP Earnings Per Share (EPS) rose by 72% to $1.03 from $0.60 year-over-year [1][36]. - Adjusted EPS increased by 6% to $1.52 from $1.43 in the same period [1][36]. - Operating Cash Flow remained stable at approximately $1,062 million, while Free Cash Flow slightly decreased to $970 million from $975 million [1][36]. Outlook for Fiscal Year 2025 - The company anticipates net and underlying sales growth of approximately 3.5% for the full fiscal year [3][4]. - GAAP EPS is projected to be around $4.08, with adjusted EPS expected to be approximately $6.00, both reflecting an increase from previous guidance [3][4]. - Operating Cash Flow and Free Cash Flow expectations have been raised to approximately $3.6 billion and $3.2 billion, respectively [3][4]. Management Commentary - Emerson's President and CEO, Lal Karsanbhai, emphasized the company's strong performance and operational resilience, highlighting advancements in industrial software capabilities and the adoption of digital solutions [2]. Segment Performance - The following segments showed growth in Q3 2025: - Final Control: Sales increased by 7% [19]. - Measurement & Analytical: Sales grew by 3% [19]. - Intelligent Devices: Sales rose by 4% [19]. - However, the Safety & Productivity segment experienced a decline of 1% [19]. Geographic Sales Growth - Sales growth varied by region in Q3 2025: - Americas: 7% growth - Europe: 7% decline - Asia, Middle East & Africa: 2% growth [20].

Core Insights - Emerson Electric Co. (EMR) is expected to report growth in both revenue and earnings for Q3 fiscal 2025, with revenue estimated at $4.58 billion, reflecting a 4.6% increase year-over-year [1][9] - The earnings consensus is set at $1.51 per share, indicating a 5.6% rise from the previous year, with a history of surpassing earnings estimates in the last four quarters [2][9] Revenue Performance - The Intelligent Devices segment is projected to see a revenue increase of 3.4% year-over-year to $3.10 billion, driven by strong performance in power end markets [3] - The Software and Control segment is anticipated to grow by 7.5% year-over-year to $1.50 billion, supported by momentum in AspenTech and the power and process markets [4] Strategic Acquisitions - Emerson has focused on expanding its product offerings through acquisitions, including the full acquisition of AspenTech in March 2025, which enhances its automation and software capabilities [5] - The acquisitions of Afag and Flexim in Q4 fiscal 2023 are expected to contribute positively to EMR's revenue by enhancing its factory automation and flow measurement capabilities [5] Cost and Margin Considerations - Rising costs and expenses related to acquisitions and restructuring may negatively impact EMR's margin performance [6] - Foreign currency fluctuations due to the company's extensive international operations could also affect margins and profitability [6] Earnings Prediction - The earnings model indicates a likelihood of an earnings beat for EMR, with an Earnings ESP of +0.39%, as the most accurate estimate is $1.52 per share, slightly above the consensus [7][8]

Summary of Emerald Resources (EMR) 2025 Conference Call Company Overview - **Company**: Emerald Resources (EMR) - **Industry**: Gold Mining - **Key Personnel**: Morgan Hart, Managing Director, with over 35 years of experience in the mining sector [1][2] Core Points and Arguments - **Investment Proposition**: Emerald has an organic pathway to become a multi-mine gold producer, targeting over 300,000 ounces per annum without further shareholder dilution, supported by cash reserves and an operational gold mine [5][38] - **Current Production**: The company has produced 410,000 ounces since commissioning in September 2021, with an all-in sustaining cash cost of $863 per ounce [6] - **Growth Projects**: - Acquisition of Bullseye Mining, which has a resource of 1,300,000 ounces [7] - Development of the Moat project in Cambodia, with a resource of 1,000,000 ounces at 1.9 grams [8] - **Financial Alignment**: 50% of the company is held by institutional investors, with over 18% owned by the board and management, indicating strong alignment with shareholder interests [9] Development and Exploration - **Upcoming Projects**: - Dingo Range project with a planned increase in production to closer to 400,000 ounces [11] - Mammoth project, which is expected to have high-grade mineralization and is in the process of finalizing licensing [8][26] - **Resource Growth**: Total resources have increased from 1,000,000 ounces to 3,600,000 ounces, achieved at a low cost of $18 to $20 per ounce [14] Environmental and Social Responsibility - **Tax Contributions**: Emerald is the second-largest taxpayer in Cambodia, contributing $52 million in taxes and royalties this year, with expectations to become the largest taxpayer as operations expand [16] - **Sustainability Initiatives**: The company has planted 115,000 trees as part of its carbon offset strategy, aiming for carbon neutrality in about seven years [34][35] Market Position and Future Outlook - **Market Conditions**: The company operates in a favorable gold market, with current gold prices above $3,300 [5] - **Production Strategy**: Plans to replace lower-grade open-cut material with higher-grade underground material to enhance production efficiency [19] - **Exploration Potential**: Significant underexplored areas in both Australia and Cambodia, with systematic exploration expected to yield additional resources [30][32] Additional Insights - **Operational Efficiency**: The company has a history of completing projects on time and within budget, with a processing plant built for $88 million [10] - **Community Engagement**: Efforts to relocate illegal miners and engage with local communities in a favorable manner [22][24] This summary encapsulates the key points discussed during the Emerald Resources conference call, highlighting the company's strategic direction, growth potential, and commitment to sustainability.