01—Abstract
Summary
Summary of the 10-Q filed August 6, 2025. Cited figures are marked; the original filing is the authoritative source.
Emerson Electric Co. (EMR) reported robust financial results for the nine months ended June 30, 2025, driven by strong performance in its Intelligent Devices and Software and Control segments.
Net sales increased by 2% to $13.16 billiona, with significant contributions from higher pricing and volume. Earnings from continuing operations common stockholders surged by 56% to $1.65 billion, reflecting improved operational efficiency, cost management, and the beneficial impact of the AspenTech acquisition. The company's financial position shows increased leverage due to the substantial AspenTech acquisition, with debt-to-capital ratios rising.
However, Emerson maintains a strong liquidity position and expects leverage ratios to improve through operating cash flows and disciplined capital allocation. Management has provided an optimistic outlook for fiscal year 2025, projecting continued sales growth and earnings per share in the range of $4.08 to $6.00b on an adjusted basis, signaling confidence in its strategic direction and operational capabilities.
02—Key points
Key Highlights
- Net sales for the nine months ended June 30, 2025, increased by 2% to $13.16 billion, compared to $12.87 billion in the prior year.
- Earnings from continuing operations attributable to common stockholders grew significantly by 56% to $1.65 billion for the nine months ended June 30, 2025, up from $1.06 billion in the prior year.
- Diluted EPS from continuing operations for the nine-month period rose to $2.91, a 58% increase from $1.84 in the same period last year.
- The company completed the acquisition of the remaining outstanding shares of AspenTech for approximately $7.2 billion on March 12, 2025, significantly impacting its balance sheet and financial leverage.
- Total debt-to-total capital ratio increased to 41.7% as of June 30, 2025, up from 26.2% at September 30, 2024, reflecting increased borrowings to fund the AspenTech transaction.
- Management projects fiscal year 2025 adjusted earnings per share to be approximately $6.00, indicating strong expected profitability.
- Operating cash flow from continuing operations for the first nine months of fiscal 2025 was $2.66 billion, an increase of $420 million compared to the prior year.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Emerson Electric Co kept $0.13.
- Revenue$4.55B100.0%
- Cost of revenue−$2.16B47.4%
- Gross profit$2.39B52.6%
- Operating costs−$1.81B39.8%
- Operating income$580.0M12.7%
- Interest, other & tax$6.0M0.1%
- Net income$586.0M12.9%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed August 6, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $4.55B$4.38B | +3.9% |
| Cost of Revenue | $2.16B$2.07B | +4.5% |
| Gross Profit | $2.39B$2.31B | +3.4% |
| SG&A Expenses | $1.27B$1.25B | +1.0% |
| Operating Income | $580.00M$344.00M | +68.6% |
| Net Income | $586.00M$329.00M | +78.1% |
| EPS (Basic) | $1.04$0.58 | +79.3% |
| EPS (Diluted) | $1.04$0.57 | +82.5% |
| Shares Outstanding (Basic) | 562.10M571.90M | −1.7% |
| Shares Outstanding (Diluted) | 564.70M574.80M | −1.8% |
05—Questions
Frequently Asked Questions
How did the AspenTech acquisition affect Emerson's financial results?
The acquisition of the remaining AspenTech shares for approximately $7.2 billion on March 12, 2025, was a significant event. It is now consolidated into the Software and Control segment. While contributing to sales growth and expected future earnings, the transaction also significantly increased Emerson's debt levels, leading to higher debt-to-capital ratios. The company incurred acquisition-related costs and has begun integration efforts.
What is the outlook for Emerson's earnings per share in fiscal year 2025?
Emerson projects diluted earnings per share from continuing operations to be approximately $4.08 for fiscal year 2025. On an adjusted basis, excluding items like amortization of intangibles, restructuring costs, and acquisition-related fees, the company expects adjusted earnings per share to be approximately $6.00.
How has Emerson's debt and leverage changed following recent acquisitions?
Emerson's financial leverage has increased due to the significant funding required for the AspenTech acquisition and, previously, National Instruments. The total debt-to-total capital ratio rose to 41.7% as of June 30, 2025, from 26.2% at the end of fiscal year 2024. The company has increased its short-term and long-term borrowings and entered into new credit facilities. Despite this elevated leverage, Emerson expects its ratios to improve through strong operating cash flows and disciplined capital allocation, aiming to reduce net debt by approximately $1 billion over the next 6-12 months.
What were the key drivers for the increase in net sales and earnings?
For the nine months ended June 30, 2025, net sales increased by 2% to $13.16 billion, driven by underlying sales growth of 2% from higher pricing and volume. Earnings from continuing operations common stockholders surged by 56% to $1.65 billion. This growth was fueled by strong performance in the Intelligent Devices and Software and Control segments, favorable price realization, cost reduction initiatives, and a favorable comparison to the prior year which included significant charges like the loss on the Copeland note receivable.
06—Continue