Emerson Electric Co. reported fourth‑quarter 2025 results that matched Wall Street expectations for earnings but fell short on revenue. Adjusted earnings per share were $1.62, exactly the consensus estimate, while total revenue was $4.86 billion—about $0.04 billion (0.6 %) below the $4.90 billion forecast. Revenue grew 4 % year‑over‑year from $4.62 billion in Q4 2024, but the miss was driven by softness in European and Chinese markets and a $120 million headwind from lower‑value software contracts that were up for renewal in 2026.
The company’s margin story was a bright spot. Pretax earnings margin expanded to 16.4 % from 14.7 % a year earlier, and adjusted EBITA margin rose to 27.5 % from 26.2 %. Operating margin climbed to 24.5 % versus 17.6 % in the same quarter last year. These gains were largely attributable to a shift toward higher‑margin Software & Control segment revenue, disciplined cost management, and the successful integration of AspenTech and Test & Measurement, which delivered $200 million in run‑rate synergies.
Dividend and share‑repurchase policy were reaffirmed. Emerson increased its quarterly cash dividend by 5 % to $0.555 per share, payable December 10, 2025, and authorized a share‑repurchase program of up to 50 million shares. The move underscores the company’s continued commitment to returning value to shareholders while maintaining a strong balance sheet.
Guidance for the coming year reflected a cautious outlook. For fiscal 2026, Emerson projected sales growth of 5.5 % and adjusted EPS of $6.35 – $6.55, slightly below the $6.53 consensus estimate. The first‑quarter 2026 EPS guidance of $1.40 fell short of the $1.49 estimate. Management cited macro‑economic headwinds—particularly in Europe and China—and the impact of the lower‑value software contract headwind as reasons for the tempered guidance, while expressing confidence in margin expansion and the continued momentum of its AI‑enabled product launches.
CEO Lal Karsanbhai highlighted the company’s “solid fiscal 2025” and praised the “meaningful progress” from integrating AspenTech and launching two AI‑powered applications. CFO Michael Baughman noted underlying sales growth of 3 % and an adjusted segment EBITDA margin of 27.6 %, up 160 basis points year‑over‑year. Their comments signal that Emerson is prioritizing high‑return verticals and maintaining disciplined cost control even as it invests heavily in automation and digital transformation.
Market reaction was negative, with Emerson shares falling 6.57 % in pre‑market trading. Investors focused on the revenue miss and the lower‑than‑expected guidance for fiscal 2026, which outweighed the fact that EPS met expectations. The reaction highlights the market’s sensitivity to revenue forecasts and forward guidance in the industrial technology sector.
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