EMERSON ELECTRIC CO
For the period ended Dec 31, 2024. Filed Feb 5, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 5, 2025
EMR$162.35-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0000032604-24-000036
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-05.
0000032604-25-000012
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 61 previous paragraphs and 36 current paragraphs.
10 unchanged; 21 reworded; 5 added; 26 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Earnings from continuing operations attributable to common stockholders were $585, up 247 percent, and diluted earnings per share from continuing operations were $1.02, up 252 percent compared with $0.29 in the prior year. Adjusted diluted earnings per share from continuing operations were $1.38, up 13 percent compared with $1.22 in the prior year, reflecting strong operating results.
Current report
Cost of sales for the first quarter of fiscal 2025 were $1,940, a decrease of $261 compared with 2024 and gross margin of 53.5 percent increased 7.0 percentage points, as the prior year reflected the impact from acquisition-related inventory step-up amortization of $231, which negatively impacted margins in the prior year by 5.6 percentage points. Favorable price less net material inflation also contributed to the increase in gross margin.
Current report
Other deductions, net were $228 for the first quarter of fiscal 2025, a decrease of $223 compared with the prior year, reflecting higher restructuring and acquisition/divestiture costs in the prior year, as well as backlog amortization related to the Test & Measurement acquisition of $34. See Note 7.
Current report
On January 27, 2025, the Company announced that it reached an agreement with AspenTech under which Emerson will acquire all outstanding shares of common stock of AspenTech not already owned by Emerson for $265 per share pursuant to an all-cash tender offer. The Company currently owns approximately 57 percent of AspenTech's outstanding shares of common stock. The transaction values the minority stake being acquired at $7.2 billion, and the Company expects to finance the transaction from cash on hand and debt financing. The transaction is expected to close in the first half of calendar year 2025, and upon closing, AspenTech will become a wholly owned subsidiary of Emerson.
Current report
Emerson's guidance excludes any impact from the proposed transaction with AspenTech, which is expected to close in the first half of calendar year 2025, and strategic alternatives, including a cash sale, for its Safety & Productivity segment.
Removed paragraphs (26)
Previous report
On October 11, 2023, the Company completed the acquisition of National Instruments Corporation (“NI”), which is now referred to as Test & Measurement and reported as a new segment in the Software and Control business group. NI provides software-connected automated test and measurement systems that enable enterprises to bring products to market faster and at a lower cost, and had revenues of approximately $1.7 billion for the 12 months ended September 30, 2023. See Note 4.
Previous report
On June 6, 2024, the Company entered into definitive agreements to sell its 40 percent non-controlling common equity interest in Copeland to private equity funds managed by Blackstone for $1.5 billion and its note receivable to Copeland for $1.9 billion. Upon entering into the note agreement, the Company recorded a pretax loss of $279 ($217 after-tax, $0.38 per share) to adjust the carrying value of the note to $1.9 billion to reflect the transaction price. The equity method losses related to the Company's non-controlling common equity interest in Copeland, which were reported since May 2023 in Other deductions, net, have been reclassified and are now reported as discontinued operations for all periods presented. See Notes 5 and 10 for further detail.
Previous report
Earnings from continuing operations attributable to common stockholders were $344, down 46 percent, and diluted earnings per share from continuing operations were $0.60, down 46 percent compared with $1.12 in the prior year. The decrease was largely due to the Company's definitive agreement to sell its Copeland note receivable for $1.9 billion, which resulted in a pretax loss of $279 ($217 after-tax, $0.38 per share) to adjust the carrying value of the note to reflect the transaction price (see Note 10 and further discussion below). Adjusted diluted earnings per share from continuing operations were $1.43, up 11 percent compared with $1.29 in the prior year, reflecting sales growth and strong operating performance, as well as a $0.09 contribution from Test & Measurement.
Previous report
Cost of sales for the third quarter of fiscal 2024 were $2,066, an increase of $114 compared with 2023, reflecting the impact of higher volume and the Test & Measurement acquisition. Gross margin of 52.8 percent increased 2.3 percentage points, reflecting the Test & Measurement acquisition and higher price, partially offset by unfavorable geographic mix in Intelligent Devices.
Previous report
As discussed above, upon entering into the agreement to sell the Copeland note receivable, the Company recorded a pretax loss of $279 ($217 after-tax, $0.38 per share) to adjust the carrying value of the note to $1.9 billion to reflect the transaction price.
Previous report
Other deductions, net were $294 for the third quarter of fiscal 2024, an increase of $164 compared with the prior year. The current year included intangibles amortization related to the Test & Measurement acquisition of$139 and restructuring costs of $57. The prior year included acquisition/divestiture costs of $38, amark-to-market gain of $12 related to the Company's equity investment in National Instruments Corporation and a mark-to-market gain of $3 related to foreign currency forward contracts that were terminated in June 2023. See Note 7 and Note 10.
Previous report
Income taxes were$88 in the third quarter of fiscal 2024 and$168 in 2023, resulting in effective tax rates of 19 percent and 21 percent, respectively. The current year rate reflected a 3 percentage point benefit related to the filing of the prior year U.S. tax return, partially offset by other items.
Previous report
Intelligent Devices sales were $3.0 billion in the third quarterof 2024, an increase of $18, or 1 percent. Underlying sales increased 2 percent onhigher price. Unde rlying sales were flat in the Americas, Europe increased 3 percent and Asia, Middle East & Africa was up 4 percent (China down 9 percent). Final Control sales increased $11, or 1 percent, reflecting strength in energy and power end markets, particularly in Latin America and Middle East & Africa, largely offset by declines in the U.S. and China. Sales for Measurement & Analytical increased $69, or 8 percent, reflecting strong growth in nearly all geographies and strong backlog conversion. Discrete Automation sales decreased $50, or 8 percent, reflecting weakness across most geographies driven in part by lower factory automation demand. Safety & Productivity sales decreased $12, or 3 percent, due to softness across all geographies. Earnings for Intelligent Devices were $693, a decrease of $15, or 2 percent, and margin decreased 0.6 percentage points to 23.1 percent, reflecting higher restructuring costs. Adjusted EBITA margin was 25.5 percent, flat compared with the prior year, reflecting favorable price less net material inflation, partially offset by unfavorable geographic mix, softer MRO and increases in other costs.
Previous report
Software and Control sales were$1.4 billion in the third quarter of 2024, an increase of $415, or 42 percent compared to the prior year, reflecting the impact of the Test & Measurement acquisition and strong growth in Control Systems & Software and AspenTech. Underlying sales were up 7 percent on 5 percent higher volume and 2 percent higher price. Underlying sales increased 15 percent in the Americas and 6 percent in Europe, while Asia, Middle East & Africa decreased 3 percent (China down 20 percent). Control Systems & Software sales increased $37, or 6 percent, reflecting strong international demand in process and hybrid end markets and strong demand in power end markets in the Americas. Test & Measurement sales were $355 for the third quarter. AspenTech sales increased $23, or 7 percent, reflecting higher license, maintenance and services revenue. Earnings for Software and Control decreased $42, down 24 percent, and margin decreased 8.2 percentage points due to the Test & Measurement loss which reflected significant intangibles amortization and restructuring. Adjusted EBITA margin decreased 0.1 perce ntage points, reflecting the impact of the Test & Measurement acquisition, largely offset by leverage on higher sales and higher price.
Previous report
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30
Previous report
Following is an analysis of the Company’s operating results for the nine months ended June 30, 2023, compared with the nine months ended June 30, 2024.
Previous report
Net sales for the first nine months of 2024 were$12.9 billion, up 16 percent compared with 2023. Intelligent Devices sales were up 5 percent, while Software and Control sales were up 51 percent, which included the impact of the Test & Measurement acquisition. Underlying sales were up 7 percent on 5 percent higher volume and 2 percent higher price. Foreign currency translation had a 0.5 percent unfavorable impact, the Test & Measurement acquisition added 10 percent and the divestiture of Metran deducted 0.5 percent. Underlying sales increased 3 percent in the U.S. and increased 10 percent internationally. The Americas was up 5 percent, Europe was up 9 percent and Asia, Middle East & Africa was up 9 percent (China was down 2 percent).
Previous report
Cost of sales for 2024 were $6,359, an increase of $699 versus $5,660 in 2023, reflecting the impact of higher volume and the Test & Measurement acquisition. Gross margin of 50.6 percent increased 1.7 percentage points, reflecting the Test & Measurement acquisition, higher price and leverage on higher sales, partially offset by the impact from acquisition-related inventory step-up amortization of $231, which negatively impacted margins by approximately 1.8 percentage points.
Previous report
SG&A expenses of $3,827 increased $755 and SG&A as a percent of sales increased 2.0 percentage points to 29.7 percent, reflecting the impact of the Test & Measurement acquisition, partially offset by strong operating leverage on higher sales and mix.
Previous report
On June 6, 2024, the Company entered into definitive agreements to sell its 40 percent non-controlling common equity interest in Copeland to private equity funds managed by Blackstone for $1.5 billion and its note receivable to Copeland for $1.9 billion. Upon entering into the note agreement, the Company recorded a pretax loss of $279 ($217 after-tax, $0.38 per share) to adjust the carrying value of the note to $1.9 billion to reflect the transaction price. The equity method losses related to the Company's non-controlling common equity interest in Copeland, which were reported since May 2023 in Other deductions, net, have been reclassified and are now reported as discontinued operations for all periods presented. See Notes 5 and 10 for further detail.
Previous report
In the second quarter of fiscal 2024, the Company received its final distribution of $79 related to its subordinated interest in Vertiv.
Previous report
Other deductions, net were $1,075 in 2024, an increase of $716 compared with the prior year. The current year included intangibles amortization related to the Test & Measurement acquisition of $419, restructuring costs of$170, acquisition/divestiture costs of$92, and a divestiture loss of$39. The prior year included a charge of$47 related to the Company exiting its business in Russia, acquisition/divestiture costs of $48, amark-to-market gain of $47 related to the Company's equity investment in National Instruments Corporation and a mark-to-market gain of $24 related to foreign currency forward contracts that were terminated in June 2023. See Note 7 and Note 10.
Previous report
Earnings from continuing operations attributable to common stockholders were $1,060, down 30 percent compared with the prior year, and diluted earnings per share from continuing operations were $1.84, down 29 percent compared with $2.60 in 2023. Adjusted diluted earnings per share from continuing operations were $4.01 compared with $3.15 in the prior year, up 27 percent. See the analysis below ofadjusted earnings per share for further details.
Previous report
Earnings (Loss) from discontinued operations were $(88) ($(0.15) per share), compared with $10,973 ($19.06 pershare) in the prior year, reflecting the $8.4 billion after-tax gain on the Copeland transaction and the $2.1 billion after-tax gain on the InSinkErator divestiture. See Note 5.
Previous report
Net earnings common stockholders were $972 ($1.69 per share) compared with $12,475 ($21.56 per share) in the prior year.
Previous report
Business Segments
Previous report
Following is an analysis of operating results for the Company’s business segments for the nine months ended June 30, 2023, compared with the nine months ended June 30, 2024. The Company defines segment earnings as earnings before interest and taxes. As a result of the Company's portfolio transformation, the Company has realigned its business segments and now reports six segments and two business groups. See Note 14.
Previous report
INTELLIGENT DEVICES
Previous report
SOFTWARE AND CONTROL
Previous report
Operating working capital increased due to the acquisition of NI. As of June 30, 2024, Emerson's cash and equivalents totaled $2,298, which included approximately $240 attributable to AspenTech. The cash held by AspenTech is intended to be used for its own purposes and is not available to return to Emerson shareholders.
Previous report
Subsequent to the end of the quarter, the Company completed the sale of its note receivable to Copeland on August 2, 2024 and received $1.9 billion of pretax cash proceeds. The Company expects the sale of its 40 percent non-controlling common equity interest in Copeland to private equity funds managed by Blackstone for $1.5 billion to close by the end of August 2024. The Company intends to use the approximately $2.9 billion of after-tax cash proceeds from both transactions to pay down its existing debt obligations.
Reworded paragraphs (21)
Previous wording
For the third quarter of fiscal 2024, net sales were $4.4 billion, up 11 percent compared with the prior year. Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, were up 3 percent. Foreign currency translation had a 1 percent unfavorable impact and the Test & Measurement acquisition added 9 percent.
Current wording
For the first quarter of fiscal 2025, net sales were $4.2 billion, up 1 percent compared with the prior year. Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, were up 2 percent. Foreign currency translation had a 1 percent unfavorable impact.
Previous wording
Following is an analysis of the Company’s operating results for the third quarter ended June 30, 2023, compared with the third quarter ended June 30, 2024.
Current wording
Following is an analysis of the Company’s operating results for the first quarter ended December 31, 2024 compared with the first quarter ended December 31, 2023.
Previous wording
Net sales for the third quarter of fiscal 2024 were $4.4 billion, up 11 percent compared with 2023. Intelligent Devices sales were up 1 percent, while Software and Control sales were up 42 percent, which included the impact of the Test & Measurement acquisition. Underlying sales were up 3 percent on 1 percent higher volume and 2 percent higher price. Foreign currency translation had a 1 percent unfavorable impact and the Test & Measurement acquisition added 9 percent. Underlying sales were down 2 percent in the U.S. and up 7 percent internationally. The Americas was up 3 percent, Europe was up 4 percent, and Asia, Middle East & Africa was up 2 percent (China down 11 percent).
Current wording
Net sales for the first quarter of fiscal 2025 were $4.2 billion, up 1 percent compared with 2024. Intelligent Devices sales were up 1 percent, while Software and Control sales were up 3 percent. Underlying sales were up 2 percent on 0.5 percent higher volume and 1.5 percent higher price. Foreign currency translation had a 1 percent unfavorable impact. Underlying sales were up 1 percent in the U.S. and up 3 percent internationally. The Americas was up 3 percent, Europe was down 2 percent, and Asia, Middle East & Africa was up 4 percent (China down 5 percent).
Previous wording
Selling, general and administrative (SG&A) expenses of $1,254 increased $212 and SG&A as apercent of sales increased 2.2 percentage points to 28.6 percent compared with the prior year, reflecting the impact of the Test & Measurement acquisition.
Current wording
Selling, general and administrative (SG&A) expenses of $1,224 decreased $53 and SG&A as apercent of sales decreased 1.7 percentage points to 29.3 percent compared with the prior year, reflecting savings from cost reduction actions and the impact of Test & Measurement acquisition-related costs incurred in the prior year.
Previous wording
Pretax earnings from continuing operations of $1,341 decreased $542 compared with prior year. Earnings increased $134 in Intelligent Devices and decreased $89 in Software and Control. See the Business Segments discussion that follows and Note 14.
Current wording
Pretax earnings from continuing operations of $775 increased $600, up 343 percent compared with the prior year. Earnings increased$92 in Intelligent Devices and increased $159 in Software and Control, see the Business Segments discussion that follows and Note 14.
Previous wording
Income taxes were$266 in the first nine of months of fiscal 2024 and$400 in 2023, resulting in effective tax rates of 20 percent and 21 percent, respectively. The current year rate included a $57 ($0.10 per share) benefit related to discrete tax items and a benefit related to the filing of the prior year U.S. tax return, partially offset by unfavorable impacts from inventory step-up amortization and the loss on divestiture (see Note 4), which was nondeductible for tax purposes. In total, the net impact of these items benefited the rate by approximately 2 percentage points, which was partially offset by other items.
Current wording
Income taxes were $182 in the first quarter of fiscal 2025 and $16 in 2024, resulting in effective tax rates of 24 percent and 9 percent, respectively. The prior year rate included a $57 ($0.10 per share) benefit related to discrete tax items and the impact of inventory step-up amortization, which in total had a 12 percentage point impact on the rate.
Previous wording
Earnings from continuing operations attributable to common stockholders were$344, down 46 percent, and diluted earnings per share from continuing operations were $0.60, down 46 percent compared with $1.12 in the prior year. Adjusted diluted earnings per share from continuing operations were $1.43 compared with $1.29 in the prior year, up 11 percent, reflecting strong operating results. See the analysis above of adjusted earnings per share for further details.
Current wording
Earnings from continuing operations attributable to common stockholders were $585, up 247 percent, and diluted earnings per share from continuing operations were $1.02, up 252 percent compared with $0.29 in the prior year. Adjusted diluted earnings per share from continuing operations were $1.38 compared with $1.22 in the prior year, reflecting strong operating results. See the analysis above ofadjusted earnings per share for further details.
Previous wording
Earnings (Loss) from discontinued operations were ($15) ($(0.03) per share) for the third quarter of fiscal 2024 and $8,709 ($15.16 per share) in the prior year. See Note 5.
Current wording
Loss from discontinued operations was $(27) ($(0.04) per share) in the prior year. See Note 5.
Previous wording
Net earnings common stockholders in the third quarter of fiscal 2024 were $329 compared with $9,352 in the prior year, and earnings per share were $0.57 compared with $16.28 in the prior year.
Current wording
Net earnings common stockholders in the first quarter of fiscal 2025 were $585 compared with $142 in the prior year, and earnings per share were $1.02 compared with $0.25 in the prior year.
Previous wording
The table below, which shows results from continuing operations on an adjusted EBITA basis, is intended to supplement the Company's discussion of its results of operations herein. The Company defines adjusted EBITA as earnings from continuing operations excluding interest expense, net, income taxes, intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction-related costs, and certain gains, losses or impairments. Adjusted EBITA and adjusted EBITA margin are measures used by management and may be useful for investors to evaluate the Company's operational performance.
Current wording
The table below, which shows results from continuing operations on an adjusted EBITA basis, is intended to supplement the Company's discussion of its results of operations herein. The Company defines adjusted EBITA as earnings from continuing operations excluding interest expense, net, income taxes, intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction-related costs, gains or losses on the Copeland equity method investment, and certain gains, losses or impairments. Adjusted EBITA and adjusted EBITA margin are measures used by management and may be useful for investors to evaluate the Company's operational performance.
Previous wording
Following is an analysis of operating results for the Company’s business segments for the third quarter ended June 30, 2023, compared with the third quarter ended June 30, 2024. The Company defines segment earnings as earnings before interest and taxes. See Note 14 for a discussion of the Company's business segments.
Current wording
Following is an analysis of operating results for the Company’s business segments for the first quarter ended December 31, 2024, compared with the first quarter ended December 31, 2023. The Company defines segment earnings as earnings before interest and taxes. See Note 14 for a discussion of the Company's business segments.
Previous wording
Intelligent Devices sales were $8.9 billion in the first nine months of 2024, an increase of $438, or 5 percent. Underlying sales increased 6 percent on 4 percent higher volume and 2 percent higher price. Underlying sales increased 3 percent in the Americas, Europe increased 8 percent, and Asia, Middle East & Africa was up 10 percent (China down 2 percent). Final Control sales increased $148, or 5 percent, reflecting strength in energy and power end markets. Sales for Measurement & Analytical increased $392, or 15 percent, reflecting robust growth in all geographies and strong backlog conversion. Discrete Automation sales decreased $106, or 5 percent, reflecting softness in all geographies. Safety & Productivity sales increased $4, essentially flat, reflecting moderate results across all geographies. Earnings for Intelligent Devices were $2,019, an increase of $134, or 7 percent, and margin increased 0.4 percentage points to 22.7 percent. Adjusted EBITA margin was 25.0 percent, an increase of 0.8 percentage points, reflecting leverage on higher sales and favorable price less net material inflation, partially offset by increases in other costs.
Current wording
Intelligent Devices sales were $2.8 billion in the first quarterof 2025, an increase of $21, or 1 percent. Underlying sales increased 2 percent on 1 percent higher price and 1 percent higher volume. Unde rlying sales increased 2 percent in the Americas, Europe decreased 3 percent and Asia, Middle East & Africa was up 3 percent (China down 2 percent). Final Control sales increased$36, or 4 percent, reflecting strength in power end markets. Sales for Measurement & Analytical increased$28, or 3 percent, reflecting robust growth in Middle East & Africa and moderate growth in the Americas and Europe. Discrete Automation sales decreased $33, or 5 percent, reflecting softness in all geographies. Safety & Productivity sales decreased $10, or 3 percent, reflecting softness in the Americas and Europe. Earnings for Intelligent Devices were$686, an increase of$92, or 16 percent, and margin increased 3.1 percentage points to 24.1 percent, reflecting strong operational performance, favorable price less net material inflation and favorable foreign currency transactions of $32 due to gains in the first quarter of 2025 compared to losses in the prior year. Adjusted EBITA margin was 26.1 percent, an increase of 2.3 percentage points.
Previous wording
Software and Control sales were $4,044 in the first nine months of 2024,an increase of $1,359, or 51 percent compared to the prior year, reflecting the impact of the Test & Measurement acquisition. Underlying sales were up 10 percent on 8 percent higher volume and 2 percent higher price. Underlying sales increased 11 percent in the Americas, 12 percent in Europe and 8 percent in Asia, Middle East & Africa (China down 3 percent). Control Systems & Software sales increased $170, or 9 percent, reflecting strong international demand in process and hybrid end markets while power end markets were strong globally. Test & Measurement sales were $1,104 in the first nine months of 2024. AspenTech sales increased $85, or 11 percent, reflecting higher license, maintenance and services revenue. Earnings for Software and Control decreased $89, down 28 percent, and margin decreased 6.1 percentage points, reflecting the impact from $419 of incremental intangibles amortization related to the Test & Measurement acquisition. Adjusted EBITA margin increased 1.5 percentage points, reflecting leverage on higher sales and higher price, partially offset by the impact of the Test & Measurement acquisition.
Current wording
Software and Control sales were $1,352 in the first quarter of 2025, an increase of $38, or 3 percent compared to the prior year, reflecting strong growth in AspenTech. Underlying sales were up 4 percent on 2 percent higher volume and 2 percent higher price. Underlying sales increased 5 percent in the Americas and were up 5 percent in Asia, Middle East & Africa (China down 11 percent), while Europe decreased 1 percent. Control Systems & Software sales increased $15, or 2 percent, and underlying sales increased 3 percent reflecting strong demand in process end markets in Europe and Asia, Middle East & Africa, while power end markets were strong in Asia, Middle East & Africa. Test & Measurement sales decreased $23, or 6 percent in the first quarter, reflecting weakness in Europe, partially offset by strong growth in the Americas. AspenTech sales increased $46, or 18 percent, reflecting strong license revenue due to the timing of renewals and new contracts signed during the quarter. Earnings for Software and Control increased $159, up 434 percent, and margin increased 11.6 percentage points, reflecting leverage on higher AspenTech sales, higher price, savings from cost reduction actions, andlower restructuring and related costs and intangibles amortization compared to the prior year. Adjusted EBITA margin increased 5.5 percentage points.
Previous wording
Key elements of the Company's financial condition as of and forthe nine months ended June 30, 2024 as compared to the year ended September 30, 2023 and the nine months ended June 30, 2023 follow.
Current wording
Key elements of the Company's financial condition for the three months ended December 31, 2024 as compared to the year ended September 30, 2024 and the three months ended December 31, 2023 follow.
Previous wording
The current ratio decreased compared to September 30, 2023, reflecting the decrease in cash and increase in short-term borrowings used to support the NI acquisition. The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 6.1X for the first nine months of fiscal 2024 compares to 10.1X for the nine months ended June 30, 2023, reflecting lower GAAP pretax earnings largely due to the NI acquisition. Excluding the impact from acquisition-related inventory step-up amortization of $231, higher intangibles amortization of $454, acquisition/divestiture fees and related costs of $171, higher restructuring and related costs of $127, the loss of $279 on the Copeland note receivable and the gain on subordinated interest of $79, the interest coverage ratio was 10.7X.
Current wording
Operating working capital increased slightly compared to September 30, 2024. The current ratio decreased compared to September 30, 2024, reflecting thedecrease in cash driven by share repurchases. The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 10.0X for the 12 months ended December 31, 2024 compares to 10.5X for the 12 months ended December 31, 2023.
Previous wording
Operating cash flow from continuing operations for the first nine months of fiscal 2024 was $2,244, an increase of $525 compared with $1,719 in the prior year, reflecting higher earnings (excluding the impact of items related to the NI acquisition and the loss on the Copeland note receivable) and favorable changes in working capital. Acquisition-related costs and integration activities negatively impacted operating cash flow in the current year by approximately $210. AspenTech generated operating cash flow of approximately $320 compared to approximately $295 in the prior year. Free cash flow from continuing operations of $1,993 in the first nine months of fiscal 2024 (operating cash flow of $2,244 less capital expenditures of $251) increased $468 compared to free cash flow of $1,525 in 2023 (operating cash flow of $1,719 less capital expenditures of $194), reflecting the increase in operating cash flow, partially offset by higher capital expenditures. Cash used in investing activities from continuing operations was $8,600, reflecting the acquisition of NI. Cash provided by financing activities from continuing operations was $583, reflecting an increase in short-term borrowings of$2,229, partially offset by the repayment of€500 of euro-denominated debt that was due in May 2024, share repurchases and dividends.
Current wording
Operating cash flow from continuing operations for the first three months of fiscal 2025 was $777, an increase of $333 compared with $444 in the prior year, reflecting higher earnings and favorable receivables performance. Acquisition-related costs and integration activities negatively impacted operating cash flow in the prior year by approximately $100. Free cash flow from continuing operations of $694 in the first three months of fiscal 2025 (operating cash flow of $777 less capital expenditures of $83) increased $327 compared to free cash flow of $367 in 2024 (operating cash flow of $444 less capital expenditures of $77), reflecting theincrease in operating cash flow. Cash used in investing activities from continuing operations was $142, and cash used in financing activities from continuing operations was $1,291, reflecting share repurchases of $899 and dividends.
Previous wording
Total cash provided by operating activities was $2,248 including the impact of discontinued operations, and increased $968 compared with $1,280 in the prior year.
Current wording
Total cash provided by operating activities was $777 including the impact of discontinued operations, and increased $362 compared with $415 in the prior year.
Previous wording
Emerson maintains a conservative financial structure to provide the strength and flexibility necessary to achieve our strategic objectives and has been successful in efficiently deploying cash where needed worldwide to fund operations, complete acquisitions and sustain long-term growth. Emerson is in a strong financial position, with total assets of $46 billion and common stockholders' equity of $21 billion, and has the resources available for reinvestment in existing businesses, strategic acquisitions and managing its capital structure on a short- and long-term basis.
Current wording
Emerson maintains a conservative financial structure to provide the strength and flexibility necessary to achieve our strategic objectives and has been successful in efficiently deploying cash where needed worldwide to fund operations, complete acquisitions and sustain long-term growth. Emerson is in a strong financial position, with total assets of $43 billion and common stockholders' equity of $20 billion, and has the resources available for reinvestment in existing businesses, strategic acquisitions and managing its capital structure on a short- and long-term basis.
Previous wording
For the full year, consolidated net sales from continuing operations are expected to be up approximately 15 percent, with underlying sales up approximately 6 percent excluding an approximate 9.5 percent impact from the NI acquisition and a 0.5 percent unfavorable impact from foreign currency. Earnings per share from continuing operations are expected to be $2.82 to $2.87, while adjusted earnings per share from continuing operations are expected to be $5.45 to $5.50 (see the following reconciliation).
Current wording
For fiscal year 2025, consolidated net sales from continuing operations are expected to be up 1.5 to 3.5 percent, with underlying sales up 3 to 5 percent, excluding a 1.5 percent unfavorable impact from foreign currency translation. Earnings per share are expected to be $4.42 to $4.62, while adjusted earnings per share are expected to be $5.85 to $6.05 (see the following reconciliation).
Previous wording
Operating cash flow from continuing operations is expected to be approximately $3.2 billion and free cash flow from continuing operations, which excludes projected capital spending of approximately $0.4 billion, is expected to be approximately $2.8 billion. The fiscal 2024 outlook assumes approximately $300 million returned to shareholders through share repurchases and approximately $1.2 billion of dividend payments.
Current wording
Opera ting cash flow is expected to be $3.6 to $3.7 billion and free cash flow, which excludes projected capital spending of approximately $0.4 billion, is expected to be $3.2 to $3.3 billion. The fiscal 2025 outlook assumes returning approximately $3.2 billion to shareholders through approximately $2.0 billion of share repurchases and approximately $1.2 billion of dividend payments.
Previous wording
Statements in this report 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, and inflation, among others, which are set forth in the “Risk Factors” of Part I, Item 1A, and the "Safe Harbor Statement" of Part II, Item 7, to the Company's Annual Report on Form 10-K for the year ended September 30, 2023 and in subsequent reports filed with the SEC, which are hereby incorporated by reference.
Current wording
Statements in this report 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 proposed acquisition by Emerson of the outstanding shares of common stock of AspenTech that Emerson does not already own, 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, and inflation, among others, which are set forth in the “Risk Factors” of Part I, Item 1A, and the "Safe Harbor Statement" of Part II, Item 7, to the Company's Annual Report on Form 10-K for the year ended September 30, 2024, "Risk Factors" of Part II - Other Information, Item 1A of the Company's Quarterly Report on Form 10-Q for the three-month period ended December 31, 2024 and in subsequent reports filed with the SEC, which are hereby incorporated by reference.
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Previous report — wording carried elsewhere
Pretax earnings from continuing operations of $455 decreased $367, down 45 percent compared with the prior year. Earnings decreased$15 in Intelligent Devices and decreased $42 in Software and Control. See the Business Segments discussion that follows and Note 14.
Previous report — wording carried elsewhere
The table below presents the Company's diluted earnings per share on an adjusted basis to facilitate period-to-period comparisons and provide additional insight into the underlying, ongoing operating performance of the Company.
Previous report — wording carried elsewhere
The table below summarizes the changes in adjusted diluted earnings per share. The items identified below are discussed throughout MD&A, see further discussion above and in the Business Segments and Financial Position sections below.
Previous report — wording carried elsewhere
The table below, which shows results on an adjusted EBITA basis, is intended to supplement the Company's discussion of its results of operations herein.