EMERSON ELECTRIC CO
For the period ended Dec 31, 2025. Filed Feb 3, 2026.
View on SEC.govAbout this filing
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, 2025 · Filed Feb 3, 2026
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 2025-06-30; filed 2025-08-06.
0000032604-25-000076
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-02-03.
0000032604-26-000007
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 59 previous paragraphs and 34 current paragraphs.
7 unchanged; 21 reworded; 6 added; 27 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 9 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 (6)
Current report
Earnings attributable to common stockholders were $605, up 3 percent, and diluted earnings per share were $1.07, up 5 percent compared with $1.02 in the prior year. Adjusted diluted earnings per share were $1.46, up 6 percent compared with $1.38 in the prior year.
Current report
Cost of sales for the first quarter of fiscal 2026 were $2,035, an increase of $95 compared with 2025 and gross margin of 53.2 percent decreased 0.3 percentage points. Gross margin was negatively impacted by tariffs, which were more than offset by targeted price actions but diluted margins, and the timing of software renewals. In total, these items negatively impacted gross margin by approximately 0.9 percentage points.
Current report
Income taxes were $169 in the first quarter of fiscal 2026 and $182 in 2025, resulting in effective tax rates of 22 percent and 24 percent, respectively. In the current year, the One Big Beautiful Bill Act (the "OBBBA") increased the effective tax rate by approximately 1 percentage point due to a lower tax deduction for foreign derived intangible income from the change to domestic research and development in fiscal 2026. The Company expects the OBBBA to slightly benefit the effective tax rate beginning in fiscal 2027. Excluding the impact related to the OBBBA, the lower rate in the current year reflected favorable tax items compared to unfavorable items in the prior year.
Current report
SOFTWARE & SYSTEMS
Current report
SAFETY & PRODUCTIVITY
Current report
Safety & Productivity sales were $503 in the first quarter of 2026, an increase of $16, or 3 percent compared to the prior year. Underlying sales were up 1 percent on 5 percent higher price offset by 4 percent lower volume. Underlying sales increased 3 percent in the Americas and 2 percent in Asia, Middle East & Africa, while Europe decreased 6 percent. Earnings for Safety & Productivity increased $1, up 1 percent, while margin decreased 0.5 percentage points, reflecting deleverage on lower volume, offset by higher price less net material inflation and the impact of tariffs, and savings from cost reduction actions. Adjusted EBITA margin decreased 0.4 percentage points.
Removed paragraphs (27)
Previous report
On March 12, 2025, Emerson completed its purchase of the remaining outstanding shares of common stock of AspenTech not already owned by the Companyfor approximately$7.2 billion. As a result of the transaction, AspenTech is now a wholly owned subsidiary of the Company. AspenTech was reorganized upon completion of the transaction and now reports to Control Systems & Software leadership. AspenTech's results, which were previously reported as a separate segment, are now consolidated into the Control Systems & Software segment for all periods presented. See Notes 4 and 15.
Previous report
Earnings from continuing operations attributable to common stockholders were $580, up 68 percent, and diluted earnings per share from continuing operations were $1.03, up 72 percent compared with $0.60 in the prior year. The prior year included a pretax loss of $279 ($217 after-tax, $0.38 per share) related to the Company's definitive agreement to sell its Copeland note receivable for $1.9 billion (see Note 10). Adjusted diluted earnings per share from continuing operations were $1.52, up 6 percent compared with $1.43 in the prior year, reflecting sales growth and strong operating performance.
Previous report
Cost of sales for the third quarter of fiscal 2025 were $2,160, an increase of $94 compared with 2024, while gross margin of 52.6 percent decreased 0.2 percentage points. Tariffs, net of targeted price actions, had an immaterial impact on gross profit, but diluted margins by approximately 0.6 percentage points, while favorable price less net material inflation was partially offset by unfavorable mix.
Previous report
Pretax earnings from continuing operations of $734 increased $279, up 61 percent compared with the prior year, reflecting the pretax loss of $279 recognized in the prior year related to the Company's definitive agreement to sell its Copeland note receivable for $1.9 billion. Earnings increased$11 in Intelligent Devices and increased $112 in Software and Control. See the Business Segments discussion that follows and Note 15.
Previous report
Income taxes were $154 in the third quarter of fiscal 2025 and $88 in 2024, resulting in effective tax rates of 21 percent and 19 percent, respectively. The prior year rate reflected a 3 percentage point benefit from return-to-provision adjustments related to the filing of the prior year U.S. tax return, partially offset by other individually immaterial items.
Previous report
Earnings (Loss) from discontinued operations were $6 ($0.01 per share) for the third quarter of fiscal 2025 and $(15) ($(0.03) per share) in the prior year. See Note 5.
Previous report
Net earnings common stockholders in the third quarter of fiscal 2025 were $586 compared with $329 in the prior year, and earnings per share were $1.04 compared with $0.57 in the prior year.
Previous report
SOFTWARE AND CONTROL
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, 2025, compared with the nine months ended June 30, 2024.
Previous report
Net sales for the first nine months of 2025 were$13.2 billion, up 2 percent compared with 2024. Intelligent Devices sales were up 1 percent, while Software and Control sales were up 4 percent. Underlying sales were up 2 percent on 1.5 percent higher price and 0.5 percent higher volume. Foreign currency translation had no impact. Underlying sales increased 4 percent in the U.S. and increased 1 percent internationally. The Americas was up 5 percent, Europe was down 4 percent and Asia, Middle East & Africa was up 3 percent (China was down 4 percent).
Previous report
Cost of sales for 2025 were $6,161, a decrease of $198 versus $6,359 in 2024, and gross margin of 53.2 percent increased 2.6 percentage points, as the prior year reflected the impact from acquisition-related inventory step-upof $231, which negatively impacted margins in the prior year by 1.8 percentage points. Favorable price less net material inflation also contributed to the increase in gross margin.
Previous report
SG&A expenses of $3,773 decreased $54 and SG&A as a percent of sales decreased 1.0 percentage points to 28.7 percent, reflecting savings from cost reduction actions.
Previous report
In the third quarter of fiscal 2024, the Company recognized a pretax loss of $279 ($217 after-tax, $0.38 per share) related to the Company's definitive agreement to sell its Copeland note receivable for $1.9 billion.
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 $944 in 2025, a decrease of $131 compared with the prior year, reflecting lower intangibles amortization expense of $134 (including $102 of backlog amortization related to the Test & Measurement acquisition) and lower restructuring expense of$100, partially offset by higher acquisition/divestiture fees and related costs. The prior year included a divestiture loss of $39.
Previous report
Income taxes were $536 in the first nine of months of fiscal 2025 and $266 in 2024, resulting in effective tax rates of 25 percent and 20 percent, respectively. The current year rate was negatively impacted by $49 ($0.09 per share) of discrete tax items related to the AspenTech transaction. In addition, the fees incurred by AspenTech were not fully deductible. In total, the net impact of these items increased the rate by approximately 3 percentage points. The prior year rate included a $57 ($0.10 per share) benefit related to discrete tax items and a benefit from return-to-provision adjustments 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 individually immaterial items.
Previous report
Earnings from continuing operations attributable to common stockholders were $1,650, up 56 percent compared with the prior year, and diluted earnings per share from continuing operations were $2.91, up 58 percent compared with $1.84 in 2024. Adjusted diluted earnings per share from continuing operations were $4.38 compared with $4.01 in the prior year, up 9 percent. See the analysis below ofadjusted earnings per share for further details.
Previous report
Earnings (Loss) from discontinued operations were $7 ($0.01 per share) compared to $(88) ($(0.15) per share) in the prior year. See Note 5.
Previous report
Net earnings common stockholders were $1,657 ($2.92 per share) compared with $972 ($1.69 per share) in the prior year.
Previous report
Business Segments
Previous report
INTELLIGENT DEVICES
Previous report
Intelligent Devices sales were $9.0 billion in the first nine months of 2025, an increase of $117, or 1 percent. Underlying sales increased 1 percent on higher price. Underlying sales increased 4 percent in the Americas, Europe decreased 4 percent, and Asia, Middle East & Africa was up 2 percent (China down 4 percent). Final Control sales increased $128, or 4 percent, reflecting strength in power end markets. Sales for Measurement & Analytical increased $50, or 2 percent, reflecting mixed geographic results and difficult comparisons. Discrete Automation sales decreased $19, or 1 percent, reflecting softness in Europe and Asia, Middle East & Africa, partially offset by moderate growth in the Americas. Safety & Productivity sales decreased $42, or 4 percent, reflecting softness in all geographies. Earnings for Intelligent Devices were $2,115, an increase of $96, or 5 percent, and margin increased 0.8 percentage points to 23.5 percent, reflecting favorable price less net material inflation. Adjusted EBITA margin was 25.4 percent, an increase of 0.4 percentage points.
Previous report
SOFTWARE AND CONTROL
Previous report
Software and Control sales were $4,217 in the first nine months of 2025, an increase of $173, or 4 percent compared to the prior year. Underlying sales were up 4 percent on 2 percent higher volume and 2 percent higher price. Underlying sales increased 7 percent in the Americas and 6 percent in Asia, Middle East & Africa (China down 6 percent), while Europe decreased 3 percent. Control Systems & Software sales increased $198, or 7 percent, reflecting robust growth at AspenTech and favorable demand in process and power end markets across all geographies. Test & Measurement sales decreased $25, or 2 percent, reflecting softness in Europe partially offset by modest growth in the Americas. Earnings for Software and Control increased $421, up 184 percent, and margin increased 9.7 percentage points, reflecting leverage on higher Control Systems & Software sales, higher price, savings from cost reduction actions (primarily at Test & Measurement), lower intangibles amortization, and lower restructuring and related costs compared to the prior year. Adjusted EBITA margin increased 4.4 percentage points.
Previous report
The change in operating working capital compared to September 30, 2024 was due to the payment of income taxes of approximately $585 in the second quarter of fiscal 2025 related to the sale of the Company's 40 percent non-controlling common equity interest in Copeland. The current ratio decreased compared to September 30, 2024, reflecting the decrease in cash and increase in short-term borrowing to support the AspenTech transaction.
Previous report
Total cash provided by operating activities was $2,088 including the impact of discontinued operations, and decreased $160 compared with $2,248 in the prior year. The decrease reflected higher operating cash flow from continuing operations, offset by $585 of income taxes paid in the second quarter related to the sale of the Company's 40 percent non-controlling common equity interest in Copeland.
Reworded paragraphs (21)
Previous wording
For the third quarter of fiscal 2025, Emerson consolidated net sales were $4.6 billion, up 4 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 favorable impact.
Current wording
For the first quarter of fiscal 2026, net sales were $4.3 billion, up 4 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 2 percent favorable impact.
Previous wording
The table below presents the Company's diluted earnings per share from continuing operations on an adjusted basis to facilitate period-to-period comparisons and provide additional insight into the underlying, ongoing operating performance of the Company. Adjusted diluted earnings per share from continuing operations excludes intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction-related costs, and certain gains, losses or impairments.
Current wording
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. Adjusted diluted earnings per share excludes intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction-related costs, discrete taxes, and certain gains, losses or impairments.
Previous wording
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 Condition sections below.
Current wording
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 wording
Following is an analysis of the Company’s operating results for the third quarter ended June 30, 2025, 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, 2025 compared with the first quarter ended December 31, 2024.
Previous wording
Net sales for the third quarter of fiscal 2025 were $4.6 billion, up 4 percent compared with 2024. Intelligent Devices sales were up 4 percent, while Software and Control sales were up 3 percent. Underlying sales were up 3 percent on 2.5 percent higher price and 0.5 percent higher volume. Foreign currency translation had a 1 percent favorable impact. Underlying sales were up 10 percent in the U.S. and down 2 percent internationally. The Americas was up 7 percent, Europe was down 7 percent, and Asia, Middle East & Africa was up 2 percent (China was flat).
Current wording
Net sales for the first quarter of fiscal 2026 were $4.3 billion, up 4 percent compared with 2025. Software & Systems sales were up 5 percent, Intelligent Devices sales were up 4 percent, and Safety & Productivity sales were up 3 percent. Underlying sales were up 2 percent on 3 percent higher price, offset by 1 percent lower volume due to a negative impact related to the timing of software renewals. Foreign currency translation had a 2 percent favorable impact. Underlying sales were up 6 percent in the U.S. and flat internationally. The Americas was up 3 percent, Europe was up 3 percent, while Asia, Middle East & Africa was flat (China down 5 percent).
Previous wording
Selling, general and administrative (SG&A) expenses of $1,266 increased $12 and SG&A as apercent of sales decreased 0.8 percentage points to 27.8 percent compared with the prior year, reflecting savings from cost reduction actions (primarily at Test & Measurement and AspenTech).
Current wording
Selling, general and administrative (SG&A) expenses of $1,242 increased $18 and SG&A as apercent of sales decreased 0.7 percentage points to 28.6 percent compared with the prior year, reflecting leverage on higher sales and savings from cost reduction actions.
Previous wording
Other deductions, net were $298 for the third quarter of fiscal 2025, an increase of $4 compared with the prior year. The increase was due to higher acquisition/divestiture costs related to the AspenTech transaction and higher foreign currency transaction losses, partially offset by backlog amortization of $34 in the prior year related to the Test & Measurement acquisition. See Note 7.
Current wording
Other deductions, net were $204 for the first quarter of fiscal 2026, a decrease of $24 compared with the prior year, reflecting lower amortization due to backlog amortization of $26 in the prior year related to the AspenTech acquisition.
Previous wording
Pretax earnings from continuing operations of $2,138 increased $797 compared with prior year. Earnings increased $96 in Intelligent Devices and increased $421 in Software and Control. See the Business Segments discussion that follows and Note 15.
Current wording
Pretax earnings of $775 were flat compared with the prior year. Earnings increased $51 in Software & Control, $7 in Intelligent Devices, and$1 in Safety & Productivity, see the Business Segments discussion that follows and Note 13.
Previous wording
Earnings from continuing operations attributable to common stockholders were$580, up 68 percent, and diluted earnings per share from continuing operations were $1.03, up 72 percent compared with $0.60 in the prior year. Adjusted diluted earnings per share from continuing operations were $1.52 compared with $1.43 in the prior year, up 6 percent, reflecting strong operating results. See the analysis above of adjusted earnings per share for further details.
Current wording
Earnings attributable to common stockholders were $605, up 3 percent, and diluted earnings per share were $1.07, up 5 percent compared with $1.02 in the prior year. Adjusted diluted earnings per share were $1.46 compared with $1.38 in the prior year, reflecting strong operating results. See the analysis above ofadjusted earnings per share for further details.
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 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 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.
Previous wording
Following is an analysis of operating results for the Company’s business segments for the third quarter ended June 30, 2025 compared with the third quarter ended June 30, 2024. The Company defines segment earnings as earnings before interest and taxes. See Note 15 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, 2025, compared with the first quarter ended December 31, 2024. The Company defines segment earnings as earnings before interest and taxes. See Note 13 for a discussion of the Company's business segments.
Previous wording
Software and Control sales were$1.4 billion in the third quarter of 2025, an increase of $46, or 3 percent compared to the prior year. Underlying sales were up 2 percent on higher price. Underlying sales increased 8 percent in the Americas and 4 percent in Asia, Middle East & Africa (China up 1 percent), while Europe decreased 11 percent. Control Systems & Software sales increased $40, or 4 percent, reflecting growth in power end markets globally and process end markets in the Americas. Test & Measurement sales increased $6, or 2 percent, reflecting early signs of recovery in discrete end markets and mixed geographic results. Earnings for Software and Control increased $112, up 87 percent, and margin increased 7.5 percentage points, reflecting higher price, savings from cost reduction actions (primarily at Test & Measurement and AspenTech), and lower intangibles amortization and restructuring costs compared to the prior year. Adjusted EBITA margin increased 2.3 perce ntage points.
Current wording
Software & Systems sales were $1,453 in the first quarter of 2026, an increase of $71, or 5 percent compared to the prior year, reflecting strong growth in Test & Measurement. Underlying sales were up 3 percent on 3 percent higher price, while volume was flat including a negative 3 percent impact related to the timing of software renewals. Underlying sales increased 3 percent in the Americas, 3 percent in Asia, Middle East & Africa (China up 1 percent), and 4 percent in Europe. Control Systems & Software sales increased $21, or 2 percent, andunderlying sales increased slightly, reflecting strong demand in power and life sciences, offset by the negative impact related to the timing of software renewals. Test & Measurement sales increased $50, or 14 percent, and underlying sales increased 11 percent in the first quarter, reflecting strength in aerospace & defense and semiconductor. Earnings for Software & Systems increased $51, up 26 percent, and margin increased 2.9 percentage points, reflecting leverage on higher sales, savings from cost reduction actions, and lower intangibles amortization and restructuring and related costs compared to the prior year. Adjusted EBITA margin increased 0.2 percentage points, which included a negative impact relating to the timing of software renewals of approximately 2 percentage points.
Previous wording
Intelligent Devices sales were $3.1 billion in the third quarterof 2025, an increase of $128, or 4 percent. Underlying sales increased 3 percent on 2.5 percent higher price and 0.5 percent higher volume. Underlying sales increased 7 percent in the Americas, Europe decreased 5 percent and Asia, Middle East & Africa was up 2 percent (China down 1 percent). Final Control sales increased $70, or 7 percent, reflecting strength in power end markets, particularly in the Americas. Sales for Measurement & Analytical increased $32, or 3 percent, reflecting mixed geographic results. Discrete Automation sales increased $31, or 5 percent, reflecting strength in the Americas and modest growth in Asia, Middle East & Africa, partially offset by continued softness in Europe. Safety & Productivity sales decreased $5, or 1 percent, due to softness in Europe, partially offset by modest growth in the Americas. Earnings for Intelligent Devices were $704, an increase of $11, or 2 percent, and margin decreased 0.6 percentage points to 22.5 percent, reflecting unfavorable foreign currency transactions and the impact of tariffs, partially offset by favorable price less net material inflation. Adjusted EBITA margin was 24.4 percent, decreasing 1.1 percentage points compared with the prior year, reflecting lower restructuring and related costs in the current year.
Current wording
Intelligent Devices sales were $2,390 in the first quarterof 2026, an increase of $84, or 4 percent. Underlying sales increased 2 percent on 3 percent higher price, offset by 1 percent lower volume. Underlying sales increased 3 percent in the Americas, Europe increased 3 percent and Asia, Middle East & Africa was down 2 percent (China down 8 percent). Sensors sales increased$24, or 2 percent, reflecting solid growth in Europe. Sales for Final Control increased$60, or 4 percent, reflecting strong growth in the Americas and solid growth in Europe, with strength in power. Earnings for Intelligent Devices were$597, an increase of$7, or 1 percent, while margin decreased 0.6 percentage points to 25.0 percent, reflecting unfavorable foreign currency transaction comparisons, deleverage on lower volume and unfavorable mix, partially offset by favorable price less net material inflation. Adjusted EBITA margin was 26.9 percent, a decrease of 0.7 percentage points.
Previous wording
Key elements of the Company's financial condition as of and forthe nine months ended June 30, 2025 as compared to the year ended September 30, 2024 and the nine months ended June 30, 2024 follow.
Current wording
Key elements of the Company's financial condition for the three months ended December 31, 2025 as compared to the year ended September 30, 2025 and the three months ended December 31, 2024 follow.
Previous wording
The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 9.6 X for the 12 months ended June 30, 2025 compares to 8.5 X for the 12 months ended June 30, 2024.
Current wording
Operating working capital increased slightly compared to September 30, 2025. The current ratio decreased slightly compared to September 30, 2025. The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 7.9X for the 3 months ended December 31, 2025 compares to 10.0X for the 3 months ended December 31, 2024. The decrease reflects higher interest expense compared to the prior year.
Previous wording
Operating cash flow from continuing operations for the first nine months of fiscal 2025 was $2,664, an increase of $420 compared with $2,244 in the prior year, reflecting higher earnings and favorable changes in working capital. Free cash flow from continuing operations of $2,401 in the first nine months of fiscal 2025 (operating cash flow of $2,664 less capital expenditures of $263) increased $408 compared to free cash flow of $1,993 in 2024 (operating cash flow of $2,244 less capital expenditures of $251), reflecting the increase in operating cash flow. Cash used in investing activities from continuing operations was $393. Cash used by financing activities from continuing operations was $3,019, reflecting the purchase of the remaining outstanding shares of common stock of AspenTech not already owned by the Company for approximately $7.2 billion, share purchases of $1.1 billion and dividends, and the repayment of $500 of 3.15% notes that matured, partially offset by the increase in short and long-term debt discussed above.
Current wording
Operating cash flow for the first three months of fiscal 2026 was $699, a decrease of $78 compared with $777 in the prior year, reflecting an increase in operating working capital, partially offset by higher earnings. Free cash flow of $602 in the first three months of fiscal 2026 (operating cash flow of $699 less capital expenditures of $97) decreased $92 compared to free cash flow of $694 in 2025 (operating cash flow of $777 less capital expenditures of $83), reflecting the decrease in operating cash flow. Cash used in investing activities was $125, and cash used in financing activities was $364, reflecting share repurchases of $250 and dividends. During the quarter, the Company repaid €500 of 1.25% euro notes that matured in October 2025.
Previous wording
The increase in the debt-to-capital ratios reflects increased short-term borrowings and long-term debt to fund the AspenTech transaction. On February 11, 2025, the Company entered into a$3 billion 364-day revolving backup credit facility to support increased commercial paper borrowings in connection with the AspenTech transaction. This facility is in addition to the Company's existing$3.5 billion revolving backup credit facility. Both credit facilities are unsecured and may be accessed under various interest rate alternatives at the Company's option. The fees to maintain the facilities are immaterial and the Company has not incurred any borrowings under either facility or previous facilities. Overall, the Company's commercial paper borrowings increased to approximately $5.4 billion at June 30, 2025. In March 2025, the Company issued €500 of 3.0% notes due March 2031, $500 of 5.0% notes due March 2035, and €500 of 3.5% notes due March 2037. Although the Company's financial leverage and debt ratios are currently elevated compared to its historical levels, Emerson expects to retain its investment-grade long-term debt ratings. Further, the Company expects its leverage and debt ratios to improve through its strong operating cash flows and disciplined capital allocation, including a targeted reduction in net debt of approximately $1 billion over the next 6-12 months.
Current wording
On February 11, 2025, the Company entered into a $3 billion, 364-day revolving backup credit facility to support increased commercial paper borrowings. The Company expects to enter into a new 364-day revolving backup credit facility with a reduced capacity prior to the expiration of the current facility. This facility is in addition to the Company's existing $3.5 billion five-year revolving backup credit facility with various banks, which was entered into in February 2023.
Previous wording
Emerson maintains a conservative financial structure designed 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.
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 $42 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 fiscal year 2025, consolidated net sales from continuing operations are expected to be up approximately 3.5 percent, with underlying sales also up approximately 3.5 percent. Earnings per share are expected to be approximately $4.08, while adjusted earnings per share are expected to be approximately $6.00 (see the following reconciliation).
Current wording
For fiscal year 2026, consolidated net sales are expected to be up approximately 5.5 percent, with underlying sales up approximately 4 percent, excluding a 1.5 percent favorable impact from foreign currency translation. Earnings per share are expected to be $4.78 to $4.93, while adjusted earnings per share are expected to be $6.40 to $6.55 (see the following reconciliation).
Previous wording
Operating cash flow is expected to be approximately $3.6 billion and free cash flow, which excludes projected capital spending of approximately $0.4 billion, is expected to be approximately $3.2 billion. The fiscal 2025 outlook assumes returning approximately $2.3 billion to shareholders through approximately $1.1 billion of share repurchases and approximately $1.2 billion of dividend payments.
Current wording
Operating cash flow is expected to be $4.0 to $4.1 billion and free cash flow, which excludes projected capital spending of approximately $0.45 billion, is expected to be $3.5 to $3.6 billion. The fiscal 2026 outlook assumes returning approximately $2.2 billion to shareholders through approximately $1.0 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 represent management’s expectations, based on currently available information. Actual results, performance or achievements could differ materially from those expressed in any forward-looking statement. Any forward-looking statements in this report speak only as of the date of this report. Emerson undertakes no obligation to update any such statements to reflect new information or later developments. Examples of risks and uncertainties that may cause or actual results or performance to be materially different from those expressed or implied by forward looking statements 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, 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 June 30, 2025 and in subsequent reports filed with the SEC, which are hereby incorporated by reference. The outlook contained herein represents the Company's expectation for its consolidated results, other than as noted herein.
Current wording
Statements in this report that are not strictly historical may be “forward-looking” statements, which represent management’s expectations, based on currently available information. Actual results, performance or achievements could differ materially from those expressed in any forward-looking statement. Any forward-looking statements in this report speak only as of the date of this report. Emerson undertakes no obligation to update any such statements to reflect new information or later developments. Examples of risks and uncertainties that may cause or actual results or performance to be materially different from those expressed or implied by forward looking statements 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, 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, 2025, and in subsequent reports filed with the SEC, which are hereby incorporated by reference. The outlook contained herein represents the Company's expectation for its consolidated results, other than as noted herein.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
The table below summarizes the changes in adjusted diluted earnings per share from continuing operations. The items identified below are discussed throughout MD&A, see further discussion above and in the Business Segments and Financial Condition sections below.
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, which shows results on an adjusted EBITA basis, is intended to supplement the Company's discussion of its results of operations herein.
Previous report — wording carried elsewhere
Following is an analysis of operating results for the Company’s business segments for the nine months ended June 30, 2025, compared with the nine months ended June 30, 2024. The Company defines segment earnings as earnings before interest and taxes. See Note 15 for a discussion of the Company's business segments.