Emerson(EMR) - 2025 Q2 - Quarterly Report

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].