01—Abstract
Summary
Summary of the 10-Q filed February 3, 2026. Cited figures are marked; the original filing is the authoritative source.
Emerson Electric Co. reported solid performance for the quarter ending December 31, 2025.
Net sales increased by 4% to $4.3 billiona, driven by broad-based growth across its key segments, particularly Software & Systems and Intelligent Devices. Underlying sales saw a 2% increase, reflecting a 3% rise in pricing partially offset by a 1% decrease in volume. Diluted earnings per share (EPS) grew by 5% to $1.07, while adjusted diluted EPS saw a more significant increase of 6% to $1.46, highlighting strong operational performance.
The company's strategic focus on portfolio transformation and integration, including the full integration of AspenTech, appears to be yielding positive results. The company maintained its financial discipline, with a stable outlook for fiscal year 2026 forecasting consolidated net sales growth of approximately 5.5% and adjusted EPS between $6.40b and $6.55.
While the interest coverage ratio saw a slight decrease due to higher interest expenses, Emerson's overall financial position remains robust with significant assets and equity. The company continues to return capital to shareholders through dividends and share repurchases, reinforcing its commitment to shareholder value.
02—Key points
Key Highlights
- Net sales increased 4% to $4.3 billion, driven by strong performance across major segments.
- Diluted earnings per share (EPS) rose 5% to $1.07.
- Adjusted diluted EPS increased 6% to $1.46, demonstrating improved operational profitability.
- Underlying sales grew 2%, supported by a 3% increase in pricing, though volume saw a slight decline.
- Software & Systems segment sales increased 5%, and Intelligent Devices segment sales grew 4%.
- Company provided a positive outlook for FY2026, expecting net sales growth of 5.5% and adjusted EPS of $6.40-$6.55.
- Operating cash flow was $699 million, a decrease from the prior year, primarily due to working capital changes.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed February 3, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $4.35B$4.17B | +4.1% |
| Cost of Revenue | $2.04B$1.94B | +4.9% |
| Gross Profit | $2.31B$2.23B | +3.4% |
| SG&A Expenses | $1.24B$1.22B | +1.5% |
| Net Income | $605.00M$585.00M | +3.4% |
| EPS (Basic) | $1.08$1.03 | +4.9% |
| EPS (Diluted) | $1.07$1.02 | +4.9% |
| Shares Outstanding (Basic) | 561.80M568.50M | −1.2% |
| Shares Outstanding (Diluted) | 564.10M571.10M | −1.2% |
05—Questions
Frequently Asked Questions
What was the main driver of the sales increase this quarter?
The 4% increase in net sales to $4.3 billion was primarily driven by broad-based growth across Emerson's key business segments. Specifically, the Software & Systems segment saw a 5% increase in sales, and the Intelligent Devices segment reported a 4% sales increase, indicating strong demand for their respective product and service offerings.
How did the company's profitability change compared to the prior year?
Profitability saw a notable improvement. Diluted EPS increased by 5% to $1.07. More significantly, adjusted diluted EPS, which excludes certain non-operational items, grew by 6% to $1.46. This suggests that underlying operational performance is strong and improving, even after accounting for significant integration and restructuring costs.
What is the company's financial outlook for the upcoming fiscal year (FY2026)?
Emerson Electric Co. projects a positive outlook for fiscal year 2026. They anticipate consolidated net sales to increase by approximately 5.5%, with underlying sales expected to grow around 4%. Furthermore, the company forecasts adjusted diluted earnings per share to be in the range of $6.40 to $6.55, indicating continued expected growth and profitability.
How is the company managing its debt and capital structure?
While the total debt-to-total capital ratio increased slightly to 39.8% and the net debt-to-net capital ratio also rose to 36.5%, the company maintains a strong financial position. The interest coverage ratio decreased to 7.9X due to higher interest expenses but remains at a healthy level. Emerson continues to deploy cash strategically for operations, acquisitions, and shareholder returns through dividends and share repurchases.
06—Continue