Emerson Reports Second Quarter 2025 Results; Updates 2025 Outlook

, /PRNewswire/ -- Emerson (NYSE: EMR) today reported results1 for its second quarter ended March 31, 2025 and updated its full year outlook for fiscal 2025. Emerson also declared a quarterly cash dividend of $0.5275 per share of common stock payable June 10, 2025 to stockholders of record on May 16, 2025. (dollars in millions, except per share) 2024 Q2 2025 Q2 Change Underlying Orders2 4 % Net Sales $4,376 $4,432 1 % Underlying Sales3 2 % Pretax Earnings $711 $629 Margin 16.3 % 14.2 % (210) bps Adjusted Segment EBITA4 $1,139 $1,240 Margin 26.0 % 28.0 % 200 bps GAAP Earnings Per Share $0.95 $0.86 (9) % Adjusted Earnings Per Share5 $1.36 $1.48 9 % Operating Cash Flow $733 $825 13 % Free Cash Flow $651 $738 14 % Management Commentary "Emerson delivered strong underlying orders in the second quarter with margin expansion and adjusted earnings exceeding our expectations," said Emerson President and Chief Executive Officer Lal Karsanbhai. "We achieved another quarter of record gross profit and adjusted segment EBITA margins, supported by our Emerson Management System and demonstrating the value customers attribute to our leading technology. Our superior first half performance and ability to navigate the tariff environment give us the confidence to update our 2025 outlook." Karsanbhai continued, "We have also marked the conclusion of Emerson's portfolio transformation with the completion of the AspenTech buy-in on March 12. We are pleased to be making significant progress on the integration. In addition, our review of strategic alternatives for our Safety & Productivity segment concluded the best value for our shareholders is to retain the business and continue to drive the segment's industry leading margins and cash flow. Looking ahead, we are excited to capitalize on the growth potential of our transformed portfolio, supported by secular drivers, and to sustain the excellent operational performance we have consistently delivered since 2021." 2025 Outlook The fiscal year 2025 guidance framework now reflects the full ownership of AspenTech. Net sales guidance increases to ~4%, as the impact from foreign exchange is now expected to be flat, and underlying sales are held at the midpoint. GAAP EPS decreases due to transaction-related costs, while adjusted EPS guidance increases at the midpoint. Expectations for operating cash flow and free cash flow are updated to $3.5B - $3.6B and $3.1B - $3.2B, respectively, as strong operational performance partially offsets transaction-related headwinds of ~$0.2B. The 2025 outlook assumes returning ~$2.3B to shareholders through $1.1B of share repurchases and ~$1.2B of dividend. Guidance figures are approximate. 2025 Q3 2025 Net Sales Growth 4.5% - 5.5% ~4% Underlying Sales Growth 3.5% - 4.5% ~4% Earnings Per Share $1.04 - $1.08 $4.05 - $4.20 Amortization of Intangibles ~$0.36 ~$1.34 Restructuring / Related Costs ~$0.06 ~$0.20 Acquisition / Divestiture Fees and Related Costs ~$0.02 ~$0.22 Discrete taxes related to AspenTech transaction $0.09 Adjusted Earnings Per Share $1.48 - $1.52 $5.90 - $6.05 Operating Cash Flow $3.5B - $3.6B Free Cash Flow $3.1B - $3.2B 1 Results are presented on a continuing operations basis. 2 Underlying orders do not include AspenTech. 3 Underlying sales excludes the impact of currency translation, and significant acquisitions and divestitures. 4 Adjusted segment EBITA represents segment earnings excluding restructuring and intangibles amortization expense. 5 Adjusted EPS excludes intangibles amortization expense, restructuring and related costs, acquisition/divestiture gains, losses, fees and related costs, and discrete taxes. Conference Call Today, beginning at 7:00 a.m. Central Time / 8:00 a.m. Eastern Time, Emerson management will discuss the second quarter results during an investor conference call. Participants can access a live webcast available at www.emerson.com/investors at the time of the call. A replay of the call will be available for 90 days. Conference call slides will be posted in advance of the call on the company website. About Emerson Emerson (NYSE: EMR) is a global industrial technology leader that provides advanced automation. With an unmatched portfolio of intelligent devices, controls systems, and industrial software, Emerson delivers solutions that automate and optimize business performance. Headquartered in Saint Louis, Missouri, Emerson combines innovative technology with proven operational excellence to power the future of automation. For more information, visit Emerson.com. Forward-Looking and Cautionary Statements Statements in this press release that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later developments. These risks and uncertainties include the scope, duration and ultimate impacts of the Russia-Ukraine and other global conflicts, as well as economic and currency conditions, market demand, pricing, protection of intellectual property, cybersecurity, tariffs, competitive and technological factors, inflation, among others, as set forth in the Company's most recent Annual Report on Form 10-K and subsequent reports filed with the SEC. The outlook contained herein represents the Company's expectation for its consolidated results, other than as noted herein. Emerson uses our Investor Relations website, www.Emerson.com/investors, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts and social media. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document. Investors: Media: Colleen Mettler Joseph Sala / Greg Klassen (314) 553-2197 Joele Frank, Wilkinson Brimmer Katcher (212) 355-4449 (tables attached) Table 1 EMERSON AND SUBSIDIARIES CONSOLIDATED OPERATING RESULTS (AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) Quarter EndedMarch 31, Six Months EndedMarch 31, 2024 2025 2024 2025 Net sales $ 4,376 $ 4,432 $ 8,493 $ 8,608 Cost of sales 2,092 2,061 4,293 4,002 SG&A expenses 1,296 1,283 2,573 2,506 Gain on subordinated interest (79) — (79) — Other deductions, net 330 418 781 646 Interest expense, net 57 41 101 50 Interest income from related party1 (31) — (62) — Earnings from continuing operations before income taxes 711 629 886 1,404 Income taxes 162 199 178 382 Earnings from continuing operations 549 430 708 1,022 Discontinued operations, net of tax (46) — (73) — Net earnings 503 430 635 1,022 Less: Noncontrolling interests in subsidiaries 2 (55) (8) (48) Net earnings common stockholders $ 501 $ 485 $ 643 $ 1,070 Earnings common stockholders Earnings from continuing operations $ 547 $ 485 $ 716 $ 1,070 Discontinued operations (46) — (73) — Net earnings common stockholders $ 501 $ 485 $ 643 $ 1,070 Diluted avg. shares outstanding 574.1 565.4 573.7 568.2 Diluted earnings per share common stockholders Earnings from continuing operations $ 0.95 $ 0.86 $ 1.24 $ 1.88 Discontinued operations (0.08) — (0.12) — Diluted earnings per common share $ 0.87 $ 0.86 $ 1.12 $ 1.88 Quarter EndedMarch 31, Six Months EndedMarch 31, 2024 2025 2024 2025 Other deductions, net Amortization of intangibles $ 273 $ 229 $ 547 $ 457 Restructuring costs 30 21 113 32 Other 27 168 121 157 Total $ 330 $ 418 $ 781 $ 646 1 Represents interest on the Copeland note receivable. Table 2 EMERSON AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (DOLLARS IN MILLIONS, UNAUDITED) Sept 30, 2024 Mar 31, 2025 Assets Cash and equivalents $ 3,588 $ 1,887 Receivables, net 2,927 2,901 Inventories 2,180 2,216 Other current assets 1,497 1,623 Total current assets 10,192 8,627 Property, plant & equipment, net 2,807 2,757 Goodwill 18,067 17,999 Other intangible assets 10,436 9,823 Other 2,744 2,772 Total assets $ 44,246 $ 41,978 Liabilities and equity Short-term borrowings and current maturities of long-term debt $ 532 $ 6,187 Accounts payable 1,335 1,340 Accrued expenses 3,875 3,319 Total current liabilities 5,742 10,846 Long-term debt 7,155 8,176 Other liabilities 3,840 3,690 Equity Common stockholders' equity 21,636 19,249 Noncontrolling interests in subsidiaries 5,873 17 Total equity 27,509 19,266 Total liabilities and equity $ 44,246 $ 41,978 Table 3 EMERSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN MILLIONS, UNAUDITED) Six Months Ended March 31, 2024 2025 Operating activities Net earnings $ 635 $ 1,022 Earnings from discontinued operations, net of tax 73 — Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 846 767 Stock compensation 147 127 Amortization of acquisition-related inventory step-up 231 — Gain on subordinated interest (79) — Changes in operating working capital (347) (203) Other, net (329) (110) Cash from continuing operations 1,177 1,603 Cash from discontinued operations (19) (585) Cash provided by operating activities 1,158 1,018 Investing activities Capital expenditures (159) (170) Purchases of businesses, net of cash and equivalents acquired (8,342) (36) Proceeds from subordinated interest 79 — Other, net (68) (58) Cash from continuing operations (8,490) (264) Cash from discontinued operations 1 — Cash used in investing activities (8,489) (264) Financing activities Net increase in short-term borrowings 2,464 2,628 Proceeds from short-term borrowings greater than three months 99 2,496 Proceeds from long-term debt — 1,544 Dividends paid (600) (598) Purchases of common stock (175) (1,122) AspenTech purchases of common stock (129) — Purchase of noncontrolling interest — (7,171) Settlement of AspenTech share awards — (76) Other, net (46) (83) Cash provided by (used in) financing activities 1,613 (2,382) Effect of exchange rate changes on cash and equivalents (15) (73) Decrease in cash and equivalents (5,733) (1,701) Beginning cash and equivalents 8,051 3,588 Ending cash and equivalents $ 2,318 $ 1,887 Table 4 EMERSON AND SUBSIDIARIESSEGMENT SALES AND EARNINGS(DOLLARS IN MILLIONS, UNAUDITED) The following tables show results for the Company's segments on an adjusted segment EBITA basis and are intended to supplement the Company's results of operations, including its segment earnings which are defined as earnings before interest and taxes. The Company defines adjusted segment and total segment EBITA as segment earnings excluding intangibles amortization expense, and restructuring and related expense. Adjusted segment and total segment EBITA, and adjusted segment and total segment EBITA margin are measures used by management and may be useful for investors to evaluate the Company's segments' operational performance. Quarter Ended March 31, 2024 2025 Reported Underlying Sales Final Control $ 1,051 $ 1,073 2 % 3 % Measurement & Analytical 1,013 1,002 (1) % — % Discrete Automation 632 615 (3) % (1) % Safety & Productivity 365 339 (7) % (6) % Intelligent Devices $ 3,061 $ 3,029 (1) % — % Control Systems & Software1 965 1,062 10 % 11 % Test & Measurement 367 359 (2) % (1) % Software and Control $ 1,332 $ 1,421 7 % 7 % Eliminations (17) (18) Total $ 4,376 $ 4,432 1 % 2 % Sales Growth by Geography Quarter EndedMarch 31, Americas 3 % Europe (1) % Asia, Middle East & Africa 3 % 1 AspenTech was fully acquired on March 12, 2025 and is now an independent business unit inside of the Control Systems & Software reporting segment. Table 4 cont. Six Months Ended March 31, 2024 2025 Reported Underlying Sales Final Control $ 1,991 $ 2,049 3 % 4 % Measurement & Analytical 1,960 1,977 1 % 2 % Discrete Automation 1,245 1,195 (4) % (3) % Safety & Productivity 687 651 (5) % (5) % Intelligent Devices $ 5,883 $ 5,872 — % 1 % Control Systems & Software 1,897 2,055 8 % 9 % Test & Measurement 749 718 (4) % (3) % Software and Control $ 2,646 $ 2,773 5 % 6 % Eliminations (36) (37) Total $ 8,493 $ 8,608 1 % 2 % Sales Growth by Geography Six Months EndedMarch 31, Americas 3 % Europe (2) % Asia, Middle East & Africa 3 % Table 4 cont. Quarter Ended March 31, Quarter Ended March 31, 2024 2025 As Reported(GAAP) AdjustedEBITA (Non-GAAP) AsReported(GAAP) AdjustedEBITA (Non-GAAP) Earnings Final Control $ 259 $ 274 $ 267 $ 290 Margins 24.7 % 26.1 % 24.9 % 27.0 % Measurement & Analytical 274 287 266 279 Margins 27.0 % 28.3 % 26.6 % 27.8 % Discrete Automation 116 131 117 130 Margins 18.4 % 20.9 % 19.0 % 21.2 % Safety & Productivity 83 91 75 82 Margins 22.7 % 24.7 % 22.2 % 24.3 % Intelligent Devices $ 732 $ 783 $ 725 $ 781 Margins 23.9 % 25.6 % 23.9 % 25.8 % Control Systems & Software 143 278 239 372 Margins 14.8 % 28.8 % 22.5 % 35.0 % Test & Measurement (79) 78 (24) 87 Margins (21.7) % 21.4 % (6.8) % 24.2 % Software and Control $ 64 $ 356 $ 215 $ 459 Margins 4.7 % 26.7 % 15.1 % 32.3 % Corporate items and interest expense, net: Stock compensation (73) (59) (59) (50) Unallocated pension and postretirement costs 38 38 27 27 Corporate and other (103) (46) (238) (74) Gain on subordinated interest 79 — — — Interest expense, net (57) — (41) — Interest income from related party1 31 — — — Pretax Earnings / Adjusted EBITA $ 711 $ 1,072 $ 629 $ 1,143 Margins 16.3 % 24.5 % 14.2 % 25.8 % Supplemental Total Segment Earnings: Adjusted Total Segment EBITA $ 1,139 $ 1,240 Margins 26.0 % 28.0 % 1 Represents interest on the Copeland note receivable. Table 4 cont. Quarter Ended March 31, Quarter Ended March 31, 2024 2025 Amortization of Intangibles1 Restructuring and Related Costs2 Amortization of Intangibles1 Restructuring and Related Costs2 Final Control $ 22 $ (7) $ 21 $ 2 Measurement & Analytical 12 1 11 2 Discrete Automation 8 7 8 5 Safety & Productivity 7 1 6 1 Intelligent Devices $ 49 $ 2 $ 46 $ 10 Control Systems & Software 132 3 127 6 Test & Measurement 141 16 105 6 Software and Control $ 273 $ 19 $ 232 $ 12 Corporate — 123 — 53 Total $ 322 $ 33 $ 278 $ 27 1 Amortization of intangibles includes $49 and $49 reported in cost of sales for the three months ended March 31, 2024 and 2025, respectively. 2 Restructuring and related costs includes $3 and $6 reported in cost of sales and selling, general and administrative expenses for the three months ended March 31, 2024 and 2025, respectively. 3 Corporate restructuring of $5 for the three months ended March 31, 2025 includes $1 related to integration-related stock compensation expense attributable to AspenTech. Corporate restructuring of $12 for the three months ended March 31, 2024 includes $10 related to integration-related stock compensation expense attributable to NI. Quarter Ended March 31, Depreciation and Amortization 2024 2025 Final Control $ 39 $ 41 Measurement & Analytical 33 31 Discrete Automation 21 22 Safety & Productivity 15 14 Intelligent Devices 108 108 Control Systems & Software 152 146 Test & Measurement 153 119 Software and Control 305 265 Corporate 11 11 Total $ 424 $ 384 Table 5 EMERSON AND SUBSIDIARIESADJUSTED CORPORATE AND OTHER SUPPLEMENTAL(DOLLARS IN MILLIONS, UNAUDITED) The following table shows the Company's stock compensation and corporate and other expenses on an adjusted basis.The Company's definition of adjusted stock compensation excludes integration-related stock compensation expense. TheCompany's definition of adjusted corporate and other excludes corporate restructuring and related costs, first yearpurchase accounting related items and transaction fees, and certain gains, losses or impairments. This metric is useful forreconciling from total adjusted segment EBITA to the Company's consolidated adjusted EBITA. Quarter Ended March 31, 2024 2025 Stock compensation (GAAP) $ (73) $ (59) Integration-related stock compensation expense 141 92 Adjusted stock compensation (non-GAAP) $ (59) $ (50) Quarter Ended March 31, 2024 2025 Corporate and other (GAAP) $ (103) $ (238) Corporate restructuring and related costs 2 4 Acquisition / divestiture costs 16 160 Loss on divestiture of business 39 — Adjusted corporate and other (non-GAAP) $ (46) $ (74) 1 Integration-related stock compensation expense for the three months ended March 31, 2024 relates to NI and includes $10 reported as restructuring costs. 2 Integration-related stock compensation expense for the three months ended March 31, 2025 relates to AspenTech and includes $1 reported as restructuring costs. Table 6 EMERSON AND SUBSIDIARIESADJUSTED EBITA & EPS SUPPLEMENTAL(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) The following tables, which show results on an adjusted EBITA basis and diluted earnings per share on an adjusted basis,are intended to supplement the Company's discussion of its results of operations herein. The Company defines adjustedEBITA as earnings excluding interest expense, net, income taxes, intangibles amortization expense, restructuringexpense, first year purchase accounting related items and transaction fees, and certain gains, losses or impairments.Adjusted earnings per share excludes intangibles amortization expense, restructuring expense, first year purchaseaccounting related items and transaction-related costs, and certain gains, losses or impairments. Adjusted EBITA,adjusted EBITA margin, and adjusted earnings per share are measures used by management and may be useful forinvestors to evaluate the Company's operational performance. Quarter Ended March 31, 2024 2025 Pretax earnings $ 711 $ 629 Percent of sales 16.3 % 14.2 % Interest expense, net 57 41 Interest income from related party1 (31) — Amortization of intangibles 322 278 Restructuring and related costs 33 27 Acquisition/divestiture fees and related costs 20 168 Loss on divestiture of business 39 — Gain on subordinated interest (79) — Adjusted EBITA $ 1,072 $ 1,143 Percent of sales 24.5 % 25.8 % Quarter Ended March 31, 2024 2025 GAAP earnings from continuing operations per share $ 0.95 $ 0.86 Amortization of intangibles 0.36 0.32 Restructuring and related costs 0.05 0.04 Discrete taxes related to AspenTech transaction — 0.09 Acquisition/divestiture fees and related costs 0.03 0.17 Loss on divestiture of business 0.07 — Gain on subordinated interest (0.10) — Adjusted earnings from continuing operations per share $ 1.36 $ 1.48 1 Represents interest on the Copeland note receivable Table 6 cont. Quarter Ended March 31, 2025 PretaxEarnings IncomeTaxes EarningsfromCont. Ops. Non-Controlling Interests3 NetEarnings CommonStockholders DilutedEarningsPerShare As reported (GAAP) $ 629 $ 199 $ 430 $ (55) $ 485 $ 0.86 Amortization of intangibles 2781 63 215 32 183 0.32 Restructuring and related costs 272 5 22 — 22 0.04 Acquisition/divestiture fees and related costs 168 22 146 48 98 0.17 Discrete taxes related to AspenTech transaction — (49) 49 — 49 0.09 Adjusted (non-GAAP) $ 1,102 $ 240 $ 862 $ 25 $ 837 $ 1.48 Interest expense, net 41 Adjusted EBITA (non-GAAP) $ 1,143 1 Amortization of intangibles includes $49 reported in cost of sales. 2 Restructuring and related costs includes $6 reported in cost of sales and selling, general and administrative expenses. 3 Non-Controlling Interests for AspenTech ceased as of March 12, 2025 with the completion of the buy-in. Reconciliations of Non-GAAP Financial Measures & Other Table 7 Reconciliations of Non-GAAP measures with the most directly comparable GAAP measure (dollars in millions,except per share amounts). See tables 4 through 6 for additional non-GAAP reconciliations. 2025 Q2 Underlying Sales Change Reported (Favorable) /Unfavorable FX (Acquisitions) / Divestitures Underlying Final Control 2 % 1 % — % 3 % Measurement & Analytical (1) % 1 % — % — % Discrete Automation (3) % 2 % — % (1) % Safety & Productivity (7) % 1 % — % (6) % Intelligent Devices (1) % 1 % — % — % Control Systems & Software 10 % 1 % — % 11 % Test & Measurement (2) % 1 % — % (1) % Software and Control 7 % — % — % 7 % Emerson 1 % 1 % — % 2 % Six Months Ended March 31, 2025 Underlying Sales Change Reported (Favorable) /Unfavorable FX (Acquisitions) / Divestitures Underlying Final Control 3 % 1 % — % 4 % Measurement & Analytical 1 % 1 % — % 2 % Discrete Automation (4) % 1 % — % (3) % Safety & Productivity (5) % — % — % (5) % Intelligent Devices — % 1 % — % 1 % Control Systems & Software 8 % 1 % — % 9 % Test & Measurement (4) % 1 % — % (3) % Software and Control 5 % 1 % — % 6 % Emerson 1 % 1 % — % 2 % Underlying Growth Guidance 2025 Q3Guidance 2025 Guidance Reported (GAAP) 4.5% - 5.5% ~4% (Favorable) / Unfavorable FX ~1 pt - (Acquisitions) / Divestitures - - Underlying (non-GAAP) 3.5% - 4.5% ~4% 2024 Q2 Adjusted Segment EBITA EBIT EBIT Margin Amortization of Intangibles Restructuringand RelatedCosts AdjustedSegmentEBITA Adjusted SegmentEBITAMargin Final Control $ 259 24.7 % $ 22 $ (7) $ 274 26.1 % Measurement & Analytical 274 27.0 % 12 1 287 28.3 % Discrete Automation 116 18.4 % 8 7 131 20.9 % Safety & Productivity 83 22.7 % 7 1 91 24.7 % Intelligent Devices $ 732 23.9 % $ 49 $ 2 $ 783 25.6 % Control Systems & Software 143 14.8 % 132 3 278 28.8 % Test & Measurement (79) (21.7) % 141 16 78 21.4 % Software and Control $ 64 4.7 % $ 273 $ 19 $ 356 26.7 % 2025 Q2 Adjusted Segment EBITA EBIT EBIT Margin Amortizationof Intangibles Restructuringand RelatedCosts AdjustedSegmentEBITA AdjustedSegmentEBITAMargin Final Control $ 267 24.9 % $ 21 $ 2 $ 290 27.0 % Measurement & Analytical 266 26.6 % 11 2 279 27.8 % Discrete Automation 117 19.0 % 8 5 130 21.2 % Safety & Productivity 75 22.2 % 6 1 82 24.3 % Intelligent Devices $ 725 23.9 % $ 46 $ 10 $ 781 25.8 % Control Systems & Software 239 22.5 % 127 6 372 35.0 % Test & Measurement (24) (6.8) % 105 6 87 24.2 % Software and Control $ 215 15.1 % $ 232 $ 12 $ 459 32.3 % Total Adjusted Segment EBITA 2024 Q2 2025 Q2 Pretax earnings (GAAP) $ 711 $ 629 Margin 16.3 % 14.2 % Corporate items and interest expense, net 85 311 Amortization of intangibles 322 278 Restructuring and related costs 21 22 Adjusted segment EBITA (non-GAAP) $ 1,139 $ 1,240 Margin 26.0 % 28.0 % Free Cash Flow 2024 Q2 2025 Q2 2025E ($ in billions) Operating cash flow (GAAP) $ 733 $ 825 $3.5 - $3.6 Capital expenditures (82) (87) ~(0.4) Free cash flow (non-GAAP) $ 651 $ 738 $3.1 - $3.2 Note 1: Underlying sales and orders exclude the impact of currency translation and significant acquisitions and divestitures. Note 2: All fiscal year 2025E figures are approximate, except where range is given. SOURCE Emerson WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Emerson Reports Second Quarter 2025 Results; Updates 2025 Outlook

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