Emerson reported results1 for its second quarter ended March 31, 2025 and updated its full year outlook for fiscal 2025. Emerson also declared a quarterly cash dividend of $0.5275 per share of common stock payable June 10, 2025 to stockholders of record on May 16, 2025.
(dollars in millions, except per share)
|
2024 Q2 |
2025 Q2 |
Change |
|
|
Underlying Orders2 |
4% |
||
|
Net Sales Underlying Sales3 |
$4,376 |
$4,432 |
1% 2% |
|
Pretax Earnings Margin |
$711 16.3% |
$629 14.2% |
(210) bps |
|
Adjusted Segment EBITA4 Margin |
$1,139 26.0% |
$1,240 28.0% |
200 bps |
|
GAAP Earnings Per Share Adjusted Earnings Per Share5 |
$0.95 $1.36 |
$0.86 $1.48 |
(9)% 9% |
|
Operating Cash Flow Free Cash Flow |
$733 $651 |
$825 $738 |
13% 14% |
Management Commentary
“Emerson delivered strong underlying orders in the second quarter with margin expansion and adjusted earnings exceeding our expectations,” said Emerson President and Chief Executive Officer Lal Karsanbhai. “We achieved another quarter of record gross profit and adjusted segment EBITA margins, supported by our Emerson Management System and demonstrating the value customers attribute to our leading technology. Our superior first half performance and ability to navigate the tariff environment give us the confidence to update our 2025 outlook."
Karsanbhai continued, “We have also marked the conclusion of Emerson's portfolio transformation with the completion of the AspenTech buy-in on March 12. We are pleased to be making significant progress on the integration. In addition, our review of strategic alternatives for our Safety & Productivity segment concluded the best value for our shareholders is to retain the business and continue to drive the segment's industry leading margins and cash flow. Looking ahead, we are excited to capitalize on the growth potential of our transformed portfolio, supported by secular drivers, and to sustain the excellent operational performance we have consistently delivered since 2021.”
2025 Outlook
The fiscal year 2025 guidance framework now reflects the full ownership of AspenTech. Net sales guidance increases to ~4%, as the impact from foreign exchange is now expected to be flat, and underlying sales are held at the midpoint. GAAP EPS decreases due to transaction-related costs, while adjusted EPS guidance increases at the midpoint. Expectations for operating cash flow and free cash flow are updated to $3.5B - $3.6B and $3.1B - $3.2B, respectively, as strong operational performance partially offsets transaction-related headwinds of ~$0.2B. The 2025 outlook assumes returning ~$2.3B to shareholders through $1.1B of share repurchases and ~$1.2B of dividend.
Guidance figures are approximate.
|
2025 Q3 |
2025 |
|
|
Net Sales Growth |
4.5% - 5.5% |
~4% |
|
Earnings Per Share Amortization of Intangibles Adjusted Earnings Per Share |
$1.04 - $1.08 ~$0.36 $1.48 - $1.52 |
$4.05 - $4.20 ~$1.34 $5.90 - $6.05 |
|
Operating Cash Flow |
$3.5B - $3.6B |
1 Results are presented on a continuing operations basis.
2 Underlying orders do not include AspenTech.
3 Underlying sales excludes the impact of currency translation, and significant acquisitions and divestitures.
4 Adjusted segment EBITA represents segment earnings excluding restructuring and intangibles amortization expense.
5 Adjusted EPS excludes intangibles amortization expense, restructuring and related costs, acquisition/divestiture gains, losses, fees and related costs, and discrete taxes.
Conference Call
Beginning at 7:00 a.m. Central Time / 8:00 a.m. Eastern Time, Emerson management will discuss the second quarter results during an investor conference call. Participants can access a live webcast available at www.emerson.com/investors at the time of the call. A replay of the call will be available for 90 days. Conference call slides will be posted in advance of the call on the company website.
