01—Abstract
Summary
Summary of the 10-Q filed August 4, 2026. Cited figures are marked; the original filing is the authoritative source.
Emerson Electric Co. reported strong financial results for the nine months ended June 30, 2026, with net sales increasing by 5% to $13.8 billiona and earnings from continuing operations attributable to common stockholders rising 18% to $1.94 billion.
Diluted EPS from continuing operations grew to $3.45b, a 19% increase year-over-year. The company's performance was driven by robust sales growth across its key segments, particularly Software & Systems and Intelligent Devices. A significant positive impact was the $82 million tariff refund received in the third quarter, which boosted gross margin.
Despite increased interest expenses related to funding the AspenTech transaction, Emerson demonstrated solid operational execution and effective cost management, reflected in a 0.4 percentage point improvement in gross margin and a 0.4 percentage point decrease in SG&A as a percentage of sales over the nine-month period. The company also reiterated its positive fiscal year 2026 outlook, projecting adjusted diluted EPS of $6.55c, underscoring management's confidence in continued growth and profitability.
02—Key points
Key Highlights
- Net sales for the nine months ended June 30, 2026, increased 5% to $13.8 billion, driven by strong performance in Software & Systems and Intelligent Devices.
- Earnings from continuing operations attributable to common stockholders grew 18% to $1.94 billion for the nine-month period.
- Diluted EPS from continuing operations rose 19% to $3.45 for the nine months ended June 30, 2026.
- The company received a $82 million tariff refund in Q3 fiscal 2026, significantly benefiting gross margin.
- Operating cash flow from continuing operations increased by $238 million to $2.9 billion for the first nine months of fiscal 2026.
- Free cash flow for the first nine months of fiscal 2026 was $2.6 billion, an increase of $217 million compared to the prior year.
- Emerson reaffirmed its fiscal year 2026 outlook, expecting adjusted diluted EPS of approximately $6.55.
03—Questions
Frequently Asked Questions
What was the primary driver for the increase in gross margin during the third quarter of fiscal 2026?
The primary driver for the increase in gross margin during the third quarter of fiscal 2026 was a $82 million tariff refund received by the company, which was recorded in Cost of Sales.
How did the AspenTech acquisition impact the company's financial results?
The AspenTech acquisition was completed in March 2025 and significantly impacted the prior year's financial results, particularly by increasing interest expenses due to the debt financing used. For the nine months ended June 30, 2026, the company noted a decrease in acquisition/divestiture fees and related costs of $175 million compared to the prior year, primarily associated with the AspenTech acquisition. AspenTech is now integrated into the Control Systems & Software segment.
What is the company's outlook for the full fiscal year 2026?
Emerson Electric Co. expects consolidated net sales to be up approximately 5% for fiscal year 2026, with underlying sales up approximately 3.5%. The company projects diluted earnings per share to be around $4.89 and adjusted diluted earnings per share to be approximately $6.55. The outlook also includes an expectation of approximately $4.1 billion in operating cash flow and $3.6 billion in free cash flow.
How has the company's debt structure changed recently?
In February 2026, Emerson entered into a $2 billion 364-day revolving backup credit facility to support commercial paper borrowings, replacing a previous $3 billion facility. This is in addition to an existing $3.5 billion five-year revolving backup credit facility. The company also issued euro-denominated notes in March 2025 to fund the AspenTech transaction. Overall debt-to-total capital remained stable at around 39% as of June 30, 2026.
04—Continue