Financial Data and Key Metrics Changes - Underlying sales in Q4 2025 increased by 4%, with full-year underlying sales growth at 3%, slightly below expectations due to softer book-to-ship ratios in Europe and China [6][7] - Adjusted earnings per share (EPS) for Q4 was $1.62, and for the full year, adjusted EPS was $6, reflecting a 9% increase year-over-year [7][15] - Free cash flow for the year reached $3.24 billion, up 12% year-over-year, exceeding guidance [7][16] - The company expects sales growth of 5.5% for fiscal 2026, with underlying sales growth of approximately 4% [7][24] Business Line Data and Key Metrics Changes - The software and control segment grew by 5%, while intelligent devices increased by 2% [18] - Process and hybrid businesses were up 4%, and discrete businesses finished the year slightly up at 1% [18] - Test and measurement orders surged by 27% in Q4, with a full-year growth of 12% [6][14] Market Data and Key Metrics Changes - Underlying orders grew by 6% in Q4, with strong performance in North America, India, and the Middle East and Africa, while demand in Europe and China remained soft [8][14] - The backlog at the end of the year was $7.4 billion, up 3% year-over-year [19] - The company reported a gross profit margin of 52.8% and an adjusted segment EBITDA margin of 27.6% for the year [15][19] Company Strategy and Development Direction - Emerson is focused on capitalizing on automation technologies to drive digital transformation and enhance operational efficiency [5][6] - The company plans to return approximately $2.2 billion to shareholders, including $1 billion in share repurchases and $1.2 billion in dividends, marking a 5% increase in dividends per share [7][8] - Emerson aims to achieve $100 million in run-rate synergies from the AspenTech integration by the end of 2026, two years ahead of schedule [16][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, driven by sustained demand in automation and digital transformation [4][6] - The company anticipates continued strength in power, LNG, life sciences, and semiconductor markets, projecting high single-digit to low double-digit growth in these sectors [22][56] - Management acknowledged challenges in Europe and China but remains confident in the overall demand environment [22][100] Other Important Information - The company launched two AI-powered applications aimed at enhancing productivity and workflow automation [12][13] - Emerson's annual contract value (ACV) for software grew by 10% year-over-year, ending at $1.56 billion [7][87] - The company plans to maintain a strong balance sheet, with a net debt to adjusted EBITDA ratio expected to decrease to approximately 2 times by the end of 2026 [31] Q&A Session Summary Question: Clarification on software renewal impact - Management confirmed that the software renewal dynamic is an accounting issue affecting revenue recognition, with no impact on free cash flow [35][40] Question: Orders growth in different segments - Orders in process and hybrid remained resilient at mid-single digits, while discrete orders recovered to high single digits driven by test and measurement [45] Question: Visibility on first half versus second half growth - Management indicated strong visibility for second half growth, with expectations of 6% growth compared to 4% in the first half, excluding the software renewal impact [52][54] Question: Trends in test and measurement and discrete automation - Management noted strong growth in aerospace and defense and semiconductor markets, while automotive remains weak [66] Question: Impact of changing subsidy environment on sustainability projects - Management reported a significant reduction in the outlook for sustainability projects, but this did not impact the current backlog [72][73] Question: Power generation market visibility - Management expressed strong visibility in power generation projects, with significant investments expected in modernization and new capacity [85]

Financial Data and Key Metrics Changes - Underlying sales in Q4 2025 increased by 4%, with full-year underlying sales growth at 3%, slightly below expectations due to softer demand in Europe and China [6][7] - Adjusted earnings per share (EPS) for Q4 was $1.62, and for the full year, adjusted EPS was $6, reflecting a 9% increase year over year [7][15] - Free cash flow for the year reached $3.24 billion, up 12% year over year, exceeding guidance [7][16] - The company expects sales growth of 5.5% for fiscal 2026, with underlying sales growth of approximately 4% [7][24] Business Line Data and Key Metrics Changes - The software and control segment grew by 5%, while intelligent devices increased by 2% [18] - Process and hybrid businesses were up 4%, and discrete businesses finished the year slightly up at 1% [18] - Test and measurement orders surged by 27% in Q4, contributing significantly to overall orders growth [6][9] Market Data and Key Metrics Changes - Underlying orders grew by 6% in Q4, with strong performance in North America, India, and the Middle East and Africa, while demand in Europe and China remained soft [8][14] - The backlog at the end of the year was $7.4 billion, up 3% year over year, positioning the company well for 2026 [19] - The company reported strong growth in LNG, power, and life sciences, collectively up 11% year over year [14][16] Company Strategy and Development Direction - The company is focused on capital allocation priorities, planning to return approximately $2.2 billion to shareholders through share repurchases and dividends [7][8] - Emerson aims to achieve adjusted segment EBITDA margin of approximately 28% in 2026, reflecting strong operational execution [24] - Continued investment in technology and innovation is emphasized, with 8% of sales allocated to R&D in 2025 [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, driven by sustained demand for automation technologies and digital transformation [6][7] - The company anticipates a challenging environment in Europe and China but expects strong growth in the Americas and India [22][24] - Management highlighted the importance of maintaining a healthy capital cycle and the resilience of MRO spending across the installed base [8][14] Other Important Information - The company achieved record gross profit margin of 52.8% and adjusted segment EBITDA margin of 27.6% [15] - Significant progress was made in integrating Aspen Tech, realizing $50 million in synergies in 2025, with plans to achieve $100 million in run rate synergies by the end of 2026 [16][19] Q&A Session Summary Question: Clarification on software renewal impact - Management confirmed that the software renewal dynamic is an accounting issue affecting revenue recognition, with no impact on free cash flow [35][40] Question: Orders growth in different segments - Orders in process and hybrid remained resilient at mid-single digits, while discrete orders recovered to high single digits driven by test and measurement [45] Question: Visibility on first half versus second half growth - Management indicated strong visibility for second half growth, with a projected 6% growth rate, excluding the software renewal dynamic [52][54] Question: Trends in test and measurement and discrete automation - Test and measurement is expected to see high single-digit growth, while discrete automation remains weak, particularly in automotive [66][67] Question: Impact of changing subsidy environment on sustainability projects - Management noted a significant reduction in the outlook for sustainability projects, but this did not impact the current backlog [72][73] Question: Power generation market visibility - The company added approximately $1 billion in projects to its project funnel, indicating robust activity in power generation and modernization [85]

Financial Data and Key Metrics Changes - In Q4 2025, underlying sales increased by 4%, with adjusted segment EBITDA margin at 27.5%, up 1.3 points year-over-year [5][6] - For the full year, underlying sales grew by 3%, with adjusted earnings per share (EPS) of $6, reflecting a 9% increase year-over-year [6][15] - Free cash flow reached $3.24 billion, up 12% year-over-year, exceeding guidance [6][15] Business Line Data and Key Metrics Changes - The test and measurement segment saw a significant increase of 27% in orders during Q4, contributing to overall growth [5][8] - Software and control grew by 5%, while intelligent devices increased by 2% [17] - Process and hybrid businesses were up 4%, while discrete businesses finished slightly up at 1% [17] Market Data and Key Metrics Changes - Underlying orders grew by 6% in Q4, with strong performance in North America, India, and the Middle East and Africa, while Europe and China remained soft [7][12] - The backlog at the end of the year was $7.4 billion, up 3% year-over-year, indicating strong positioning for 2026 [18] - The LNG market backlog was approximately $2 billion, with $350 million specifically in the backlog [92] Company Strategy and Development Direction - The company aims for 4% underlying sales growth in 2026, supported by investments in growth verticals and robust performance in test and measurement [6][25] - Plans to return approximately $2.2 billion to shareholders, including $1 billion in share repurchases and $1.2 billion in dividends, marking a 5% increase in dividend per share [6][7] - Continued investment in technology, with 8% of sales allocated to innovation in 2025 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, driven by resilient demand for automation technologies and digital transformation [5][6] - The company anticipates challenges in Europe and China but expects strong growth in North America and India [21][24] - Management highlighted the importance of software annual contract value (ACV), projecting a 10% growth in ACV for 2026 [82] Other Important Information - The company achieved record gross profit margin of 52.8% and adjusted segment EBITDA margin of 27.6% [13] - Integration of AspenTech is progressing well, with $50 million in synergies realized in 2025, and plans to achieve $100 million in run rate synergies by the end of 2026 [15] Q&A Session Summary Question: Clarification on software renewal impact - Management confirmed that the software renewal dynamic is an accounting issue affecting revenue recognition, with no impact on free cash flow [35][39] Question: Orders growth in different segments - Orders in process and hybrid remained resilient, while discrete markets showed recovery driven by test and measurement [44] Question: Visibility on power generation projects - Management indicated strong visibility in power generation, with significant projects added to the funnel [80] Question: LNG backlog and market dynamics - Approximately $2 billion of the $11.1 billion project funnel is related to LNG, with expectations for continued activity despite challenges in Europe and China [92][94]

Core Viewpoint - Emerson Electric reported a 5% year-over-year increase in net sales for Q4 of fiscal year 2025, reaching $4.85 billion, slightly below analysts' expectations of $4.9 billion due to unstable demand for automation equipment [1] Financial Performance - Net sales for Q4 fiscal year 2025 were $4.85 billion, a 5% increase compared to the previous year [1] - Adjusted earnings per share were $1.62, meeting expectations [1] Shareholder Returns - The company repurchased 8 million shares over the past year and plans to continue a $1 billion stock buyback in fiscal year 2026 [1] - Quarterly dividend was increased by 5.2% to $0.555 per share [1]

Core Insights - Emerson Electric reported quarterly earnings of $1.62 per share, matching the Zacks Consensus Estimate, and showing an increase from $1.48 per share a year ago [1] - The company posted revenues of $4.86 billion for the quarter ended September 2025, which was 0.6% below the Zacks Consensus Estimate, but up from $4.62 billion year-over-year [2] - Emerson Electric has surpassed consensus EPS estimates three times over the last four quarters, while it has only topped revenue estimates once in the same period [2] Earnings Performance - The earnings surprise for the previous quarter was +0.66%, with actual earnings of $1.52 per share compared to an expected $1.51 [1] - The current consensus EPS estimate for the upcoming quarter is $1.48, with expected revenues of $4.39 billion, and for the current fiscal year, the EPS estimate is $6.51 on revenues of $18.92 billion [7] Stock Performance and Outlook - Emerson Electric shares have increased by approximately 11.1% since the beginning of the year, while the S&P 500 has gained 15.1% [3] - The company's Zacks Rank is currently 2 (Buy), indicating expectations for the stock to outperform the market in the near future [6] Industry Context - The Manufacturing - Electronics industry, to which Emerson Electric belongs, is currently ranked in the top 17% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8]

2025 Performance Highlights - Q4 underlying orders growth was 6%[7] - Full year underlying sales growth was 3%, impacted by softer book-to-ship in Europe and China[7] - Adjusted EPS for 2025 was $6.00, a 9% year-over-year increase[7] - Free cash flow reached $3.24 billion, up 12% year-over-year[7] - Annual Contract Value (ACV) was $1.56 billion, a 10% increase year-over-year[7] 2026 Guidance - Sales growth is projected at approximately 5.5%, with underlying growth of around 4%[7] - Adjusted segment EBITA margin is expected to be approximately 28%[7] - Adjusted EPS is guided to $6.35 – $6.55[7] - The company plans to return approximately $2.2 billion to shareholders through share repurchases of around $1 billion and a 5% dividend per share increase[7] Regional Outlook - Sustained momentum is expected in North America, India, and the Middle East, offset by continued softness in Europe and China[13] - China is expected to be approximately flat in terms of underlying sales growth[27] Financial Details - The company anticipates free cash flow between $3.5 billion and $3.6 billion[30] - Price is expected to contribute approximately 2.5 percentage points to sales growth[30] - The tax rate is projected to be around 21.5%[30]

(Reuters) -Emerson Electric reported a lower-than-expected fourth-quarter revenue on ​Wednesday, as the company contends with ‌choppy demand for its automation equipment. Shares of the company fell ‌over 6% in premarket trade. Emerson, which pivoted to focus on automation over the past few years, is still attempting to gain traction and has ⁠struggled to yield stronger ‌margins from the unit. The company streamlined itself over the past few years with moves ‍that included a string of deals to cash in on ...

Core Insights - Emerson Electric Co. reported financial results for Q4 and provided guidance for Q1 and full-year 2026, indicating a focus on earnings and sales growth [1][2] Financial Guidance - For Q1 2026, the company expects earnings of approximately $0.98 per share and adjusted earnings of about $1.40 per share, with net sales growth of around 4.0% and underlying sales growth of about 2% [1] - For fiscal 2026, Emerson projects earnings between $4.73 and $4.93 per share and adjusted earnings between $6.35 and $6.55 per share, with net sales growth of about 5.5% and underlying sales growth of about 4% [2] Analyst Expectations - Analysts anticipate earnings of $1.50 per share with revenue growth of 6.43% to $4.44 billion for the quarter [2] - For the year, the consensus is for earnings of $5.97 per share and revenue growth of 3.27% to $18.06 billion [3] Shareholder Returns - The company plans to return approximately $2.2 billion to shareholders through $1.0 billion in share repurchases and about $1.2 billion in dividends [4] - Emerson declared a 5% increase in its quarterly cash dividend to $0.555 per share, payable on December 10, 2025, to stockholders of record on November 14, 2025 [4] - The Board of Directors authorized the repurchase of up to 50 million shares of common stock [4]

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Financial Performance - Net sales for Q4 2025 were $4,855 million, representing a 5% increase from Q4 2024's $4,619 million[1] - Full year net sales increased by 3% to $18,016 million in 2025, up from $17,492 million in 2024[1] - GAAP earnings per share for Q4 2025 rose by 15% to $1.12, compared to $0.97 in Q4 2024[1] - Adjusted earnings per share for the full year 2025 were $6.00, a 9% increase from $5.49 in 2024[1] - Net earnings for the year ended September 30, 2024, were $1,955 million, projected to increase to $2,246 million in 2025[18] - The year ended September 30, 2025, saw GAAP earnings of $2,285 million, with diluted earnings per share at $4.03[41] - Adjusted (non-GAAP) earnings for the year were $3,404 million, leading to adjusted diluted earnings per share of $6.00[41] Cash Flow and Returns - Operating cash flow for 2025 was $3,676 million, an 11% increase from $3,317 million in 2024[1] - Free cash flow for 2025 was $3,245 million, a 12% increase from $2,898 million in 2024[1] - The company plans to return approximately $2.2 billion to shareholders in 2026, including about $1 billion in share repurchases and $1.2 billion in dividends[3] - Free cash flow for FY24 is $2,898 million and for FY25 it is expected to be $3,245 million, with projections for FY26E ranging from $3.5 billion to $3.6 billion[45] Segment Performance - Emerson achieved $200 million in run-rate cost synergies from the integration of AspenTech and Test & Measurement[2] - The Intelligent Devices segment reported sales of $12,161 million for the year ended September 30, 2024, with a projected increase to $12,400 million in 2025, reflecting a 2% growth[25] - Adjusted EBITA for the Final Control segment was $271 million for Q4 2024, expected to rise to $305 million in Q4 2025, with margins increasing from 23.2% to 26.1%[28] - The Control Systems & Software segment achieved an adjusted EBITA of $98 million for Q4 2024, with margins expected to improve from 9.8% to 24.0% in Q4 2025[28] - The Final Control segment reported an adjusted EBITA of $335 million for Q4 2025, with an EBITA margin of 27.6%[44] - The Intelligent Devices segment achieved an adjusted EBITA of $926 million for Q4 2025, with an EBITA margin of 27.2%[44] - Control Systems & Software segment EBITA margin improved significantly from 28.1% in 2024 to 33.0% in 2025, with EBITA increasing from $1,107 million to $1,388 million[45] Sales Growth - Sales growth in the Americas for the quarter ended September 30, 2024, was 6%, while Europe and Asia, Middle East & Africa saw growth of 3% and 2%, respectively[23] - The company experienced a 5% underlying sales change for the fourth quarter of FY25, with a 4% underlying growth guidance for Q1 2026[43] - The 2026 outlook projects net sales growth of approximately 5.5% and underlying sales growth of around 4%[4] Cost and Expenses - The company incurred restructuring and related costs of $64 million for the quarter ended September 30, 2024, which rose to $81 million in 2025[38] - The total adjusted corporate and other expenses for the quarter ended September 30, 2024, were $(60) million, improving to $(34) million in 2025[35] - The company incurred $257 million in amortization of intangibles and $61 million in restructuring and related costs for Q4 2025[44] Depreciation and Amortization - Total depreciation and amortization for the quarter ended September 30, 2024, was $426 million, down from $379 million in 2025[32] - The company’s amortization of intangibles for the year ended September 30, 2024, was $1,274 million, decreasing to $1,083 million in 2025[39] Other Financial Metrics - The company reported a margin increase of 170 basis points in Q4 2025, reaching 16.4% compared to 14.7% in Q4 2024[1] - Total pretax earnings (GAAP) increased from $2,020 million in 2024 to $2,934 million in 2025, reflecting a margin increase from 11.5% to 16.3%[45] - Adjusted EBITA for the quarter ended September 30, 2024, was $1,135 million, representing a 24.6% margin, compared to $1,271 million and a 26.2% margin in 2025[38]