01—Abstract
Summary
Summary of the 10-Q filed May 5, 2026. Cited figures are marked; the original filing is the authoritative source.
Emerson Electric Co. reported solid financial results for the quarter ending March 31, 2026, demonstrating year-over-year growth in both net sales and net earnings.
Net sales increased by 3% to $4.6 billiona, driven by improvements across its Software & Systems, Intelligent Devices, and Safety & Productivity segments. Diluted earnings per share saw a substantial increase of 28% to $1.10, significantly boosted by lower acquisition/divestiture fees compared to the prior year's comparable period. The company's adjusted diluted earnings per share also showed positive momentum, rising 4% to $1.54, reflecting underlying operational strength despite some headwinds like timing of software renewals and geopolitical impacts in the Middle East.
Financially, Emerson maintains a robust balance sheet with total assets of $42 billionb and common stockholders' equity of $20 billion. The company generated strong operating cash flow, contributing to a healthy free cash flow of $1.3 billion for the six-month period.
Management has reaffirmed its fiscal year 2026 outlook, expecting continued sales growth and a diluted EPS range of $4.79 to $4.89c, with adjusted EPS projected between $6.45 and $6.55. The company also plans to return significant capital to shareholders through share repurchases and dividends.
02—Key points
Key Highlights
- Net sales for the quarter increased 3% year-over-year to $4.6 billion, with underlying sales up 0.5%.
- Diluted EPS rose 28% to $1.10, primarily due to a significant decrease in acquisition/divestiture fees compared to the prior year.
- Adjusted diluted EPS increased 4% to $1.54, indicating underlying operational performance improvements.
- Software & Systems segment sales grew 4%, Intelligent Devices by 2%, and Safety & Productivity by 5%.
- Operating cash flow for the six months was $1.48 billion, and free cash flow was $1.3 billion.
- The company reaffirmed its full-year fiscal 2026 outlook, projecting diluted EPS between $4.79-$4.89 and adjusted EPS between $6.45-$6.55.
- Emerson continues to manage its capital structure effectively, planning to return approximately $2.2 billion to shareholders via buybacks and dividends.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed May 5, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $4.56B$4.43B | +2.9% |
| Cost of Revenue | $2.14B$2.06B | +3.8% |
| Gross Profit | $2.42B$2.37B | +2.2% |
| SG&A Expenses | $1.32B$1.28B | +2.6% |
| Net Income | $618.00M$485.00M | +27.4% |
| Shares Outstanding (Basic) | 560.80M563.00M | −0.4% |
| Shares Outstanding (Diluted) | 563.00M565.40M | −0.4% |
05—Questions
Frequently Asked Questions
What was the primary driver for the significant increase in net earnings and diluted EPS?
The significant increase in net earnings and diluted EPS was primarily driven by a substantial decrease in acquisition/divestiture fees and related costs compared to the prior year's quarter, which were significantly higher due to the AspenTech transaction. While operational performance improved, the year-over-year comparison benefited greatly from the reduction in these one-time transaction costs.
How did the company's different business segments perform?
The company's three reporting segments showed positive growth. Software & Systems sales increased by 4%, Intelligent Devices by 2%, and Safety & Productivity by 5% year-over-year. Underlying sales growth varied across segments and regions, with the Americas generally showing stronger performance.
What are the key factors impacting the company's margins and profitability?
Margins were impacted by several factors including the timing of software renewals which had a negative effect on gross and adjusted EBITA margins. Tariffs also had a dilutive effect on gross margin, although this was largely offset by price increases. Geopolitical events in the Middle East also contributed to lower volume in certain segments.
What is the company's outlook for the remainder of fiscal year 2026?
Emerson has reaffirmed its fiscal year 2026 outlook. The company expects consolidated net sales to increase approximately 4.5%, with underlying sales up around 3%. Diluted earnings per share are projected to be between $4.79 and $4.89, and adjusted earnings per share are expected to range from $6.45 to $6.55. Strong operating and free cash flow are also anticipated.
06—Continue