Emerson Reports First Quarter 2025 Results; Updates 2025 Outlook

PR Newswire


ST. LOUIS
, Feb. 5, 2025 /PRNewswire/ — Emerson (NYSE: EMR) today reported results1 for its first quarter ended December 31, 2024 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 March 10, 2025 to stockholders of record on February 14, 2025.


(dollars in millions, except per share)


2024 Q1


2025 Q1


Change

Underlying Orders2

1 %

Net Sales

$4,117

$4,175

1 %


Underlying Sales3


2 %

Pretax Earnings

$175

$775


Margin


4.2 %


18.6 %


1440 bps

Adjusted Segment EBITA4

$1,014

$1,169


Margin


24.6 %


28.0 %


340 bps

GAAP Earnings Per Share

$0.29

$1.02

252 %

Adjusted Earnings Per Share5

$1.22

$1.38

13 %

Operating Cash Flow

$444

$777

75 %

Free Cash Flow

$367

$694

89 %

Management Commentary

“Emerson began the fiscal year on a strong note, exceeding first quarter expectations for incremental operating margins and earnings per share with strong cash flow generation,” said Emerson President and Chief Executive Officer Lal Karsanbhai. “Our record gross profit margin and adjusted segment EBITA margin reflect the strength of our transformed industrial technology portfolio and Emerson Management System, as well as the talent and dedication of our world-class team.”

Karsanbhai continued, “We reiterate our guide for underlying sales, earnings per share and cash flow driven by resilient demand in process and hybrid markets, expected second half discrete recovery and our proven ability to execute. Our team remains energized, and we look forward to continuing the positive momentum across our business, including progressing in the final phase of our portfolio transformation.”

2025 Outlook

The following tables summarize the fiscal year 2025 guidance framework and does not include any impact from the recently announced portfolio transactions6 related to AspenTech and Safety & Productivity. The 2025 outlook assumes returning approximately $3.2 billion to shareholders through approximately $2.0 billion of share repurchases and approximately $1.2 billion of dividend payments. Guidance figures are approximate.


2025 Q2


2025

Net Sales Growth

(0.5%) – 0.5%

1.5% – 3.5%

Underlying Sales Growth

1% – 2%

3% – 5%

Earnings Per Share

$1.01 – $1.05

$4.42 – $4.62


Amortization of Intangibles


~$0.31


~$1.21


Restructuring / Related Costs


~$0.04


~$0.14


Acquisition / Divestiture Fees and Related Costs


~$0.02


~$0.08

Adjusted Earnings Per Share

$1.38 – $1.42

$5.85 – $6.05

Operating Cash Flow

$3.6B – $3.7B

Free Cash Flow

$3.2B – $3.3B


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, the amortization of acquisition-related inventory step-up, acquisition/divestiture gains, losses, fees and related costs, and discrete taxes.


6 Guidance includes Safety & Productivity and assumes AspenTech at our current ownership of ~57% outstanding shares.

Conference Call

Today, beginning at 7:30 a.m. Central Time / 8:30 a.m. Eastern Time, Emerson management will discuss the first 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.

About Emerson

Emerson (NYSE: EMR) is a global technology and software company providing innovative solutions for the world’s essential industries. Through its leading automation portfolio, including its majority stake in AspenTech, Emerson helps hybrid, process and discrete manufacturers optimize operations, protect personnel, reduce emissions and achieve their sustainability goals. For more information, visit Emerson.com.

Forward-Looking and Cautionary Statements

Statements in this press release that are not strictly historical may be “forward-looking” statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later developments. These risks and uncertainties include the scope, duration and ultimate impacts of the RussiaUkraine and other global conflicts, as well as economic and currency conditions, market demand, pricing, protection of intellectual property, cybersecurity, tariffs, competitive and technological factors, inflation, among others, as set forth in the Company’s most recent Annual Report on Form 10-K and subsequent reports filed with the SEC. The outlook contained herein represents the Company’s expectation for its consolidated results, other than as noted herein.

Emerson uses our Investor Relations website, www.Emerson.com/investors, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts and social media. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.


Investors:


Media:

Colleen Mettler

Joseph Sala / Greg Klassen

(314) 553-2197

Joele Frank, Wilkinson Brimmer Katcher

(212) 355-4449

(tables attached)

 



Table 1

EMERSON AND SUBSIDIARIES

CONSOLIDATED OPERATING RESULTS

(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)

Quarter Ended Dec 31

2023

2024


Net sales


$           4,117


$           4,175

Cost and expenses

     Cost of sales

2,201

1,940

     SG&A expenses

1,277

1,224

     Other deductions, net

451

228

     Interest expense, net

44

8

     Interest income from related party1

(31)


Earnings from continuing operations before income taxes

175

775

Income taxes

16

182


Earnings from continuing operations

159

593

Discontinued operations, net of tax

(27)


Net earnings

132

593

Less: Noncontrolling interests in subsidiaries

(10)

8


Net earnings common stockholders

$              142

$              585


Earnings common stockholders

Earnings from continuing operations

$              169

$              585

Discontinued operations

(27)


Net earnings common stockholders


$              142


$              585

Diluted avg. shares outstanding

573.3

571.1


Diluted earnings per share common stockholders

Earnings from continuing operations

$             0.29

$             1.02

Discontinued operations

(0.04)


Diluted earnings per common share


$             0.25


$             1.02

Quarter Ended Dec 31

2023

2024


Other deductions, net

Amortization of intangibles

$              274

$              229

Restructuring costs

83

11

Other

94

(12)


Total


$              451


$              228


1 Represents interest on the Copeland note receivable

 



Table 2

EMERSON AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(DOLLARS IN MILLIONS, UNAUDITED)


Sept 30, 2024


Dec 31, 2024


Assets

     Cash and equivalents

$           3,588

$           2,834

     Receivables, net

2,927

2,694

     Inventories

2,180

2,200

     Other current assets

1,497

1,466

Total current assets

10,192

9,194

     Property, plant & equipment, net

2,807

2,743

     Goodwill

18,067

17,906

     Other Intangibles

10,436

10,025

     Other

2,744

2,742


Total assets


$         44,246


$         42,610


Liabilities and equity

     Short-term borrowings and current maturities of long-term debt

$              532

$           1,066

     Accounts payable

1,335

1,260

     Accrued expenses

3,875

3,632

Total current liabilities

5,742

5,958

     Long-term debt

7,155

6,557

     Other liabilities

3,840

3,716


Equity

     Common stockholders’ equity

21,636

20,490

     Noncontrolling interests in subsidiaries

5,873

5,889

Total equity

27,509

26,379


Total liabilities and equity


$         44,246


$         42,610

 



Table 3

EMERSON AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN MILLIONS, UNAUDITED)

Three Months Ended Dec 31

2023

2024


Operating activities

Net earnings

$              132

$              593

Earnings from discontinued operations, net of tax

27

Adjustments to reconcile net earnings to net cash provided by operating activities:

        Depreciation and amortization

422

383

        Stock compensation

74

68

        Amortization of acquisition-related inventory step-up

231

        Changes in operating working capital

(238)

(154)

        Other, net

(204)

(113)

            Cash from continuing operations

444

777

            Cash from discontinued operations

(29)

            Cash provided by operating activities

415

777


Investing activities

Capital expenditures

(77)

(83)

Purchases of businesses, net of cash and equivalents acquired

(8,339)

(37)

Other, net

(37)

(22)

    Cash from continuing operations

(8,453)

(142)

    Cash from discontinued operations

1

    Cash used in investing activities

(8,452)

(142)

Financing activities

Net increase in short-term borrowings

2,647

2

Payments of long-term debt

(2)

Dividends paid

(300)

(301)

Purchases of common stock

(175)

(899)

AspenTech purchases of common stock

(72)

Other, net

(45)

(91)

    Cash provided by (used in) financing activities

2,055

(1,291)

Effect of exchange rate changes on cash and equivalents

7

(98)


Decrease in cash and equivalents


(5,975)


(754)

Beginning cash and equivalents

8,051

3,588


Ending cash and equivalents


$            2,076


$           2,834

 



Table 4

EMERSON AND SUBSIDIARIES

SEGMENT SALES AND EARNINGS

(DOLLARS IN MILLIONS, UNAUDITED)

The following tables show results for the Company’s segments on an adjusted segment EBITA basis and are intended
to supplement the Company’s results of operations, including its segment earnings which are defined as earnings before
interest and taxes. The Company defines adjusted segment and total segment EBITA as segment earnings excluding
intangibles amortization expense, and restructuring and related expense. Adjusted segment and total segment EBITA,
and adjusted segment and total segment EBITA margin are measures used by management and may be useful for
investors to evaluate the Company’s segments’ operational performance.

Quarter Ended Dec 31

2023

2024

Reported

Underlying


Sales

Final Control

$              940

$              976

4 %

5 %

Measurement & Analytical

947

975

3 %

4 %

Discrete Automation

613

580

(5) %

(4) %

Safety & Productivity

322

312

(3) %

(3) %


Intelligent Devices


$           2,822


$           2,843


1 %


2 %

Control Systems & Software

675

690

2 %

3 %

Test & Measurement

382

359

(6) %

(5) %

AspenTech

257

303

18 %

18 %


Software and Control


$           1,314


$           1,352


3 %


4 %

Eliminations

(19)

(20)


Total


$           4,117


$           4,175


1 %


2 %


Sales Growth by Geography

Quarter Ended
Dec 31

Americas

3 %

Europe

(2) %

Asia, Middle East & Africa

4 %



Table 4 cont.

Quarter Ended Dec 31

Quarter Ended Dec 31

2023

2024

As Reported
(GAAP)

Adjusted
EBITA
(Non-GAAP)

As
Reported
(GAAP)

Adjusted
EBITA
(Non-GAAP)


Earnings

Final Control

$          194

$          223

$          236

$          260


 Margins


20.6 %


23.6 %


24.2 %


26.6 %

Measurement & Analytical

235

258

285

296


 Margins


24.9 %


27.3 %


29.2 %


30.4 %

Discrete Automation

97

116

98

112


 Margins


15.8 %


18.9 %


16.9 %


19.3 %

Safety & Productivity

68

74

67

73


 Margins


21.1 %


23.1 %


21.6 %


23.8 %


Intelligent Devices


$          594


$          671


$          686


$          741



 Margins



21.0 %



23.8 %



24.1 %



26.1 %

Control Systems & Software

149

155

193

200


 Margins


22.1 %


23.1 %


27.9 %


28.8 %

Test & Measurement

(78)

101

(13)

91


 Margins


(20.4) %


26.5 %


(3.6) %


25.5 %

AspenTech

(35)

87

15

137


 Margins


(13.7) %


33.6 %


4.8 %


45.1 %


Software and Control


$            36


$          343


$          195


$          428



 Margins



2.8 %



26.1 %



14.4 %



31.6 %


Corporate items and interest expense, net:

Stock compensation

(74)

(44)

(68)

(66)

Unallocated pension and postretirement costs

31

31

27

27

Corporate and other

(399)

(38)

(57)

(34)

Interest expense, net

(44)

(8)

Interest income from related party1

31


Pretax Earnings / Adjusted EBITA


$          175


$          963


$          775


$        1,096



 Margins



4.2 %



23.4 %



18.6 %



26.3 %


Supplemental Total Segment Earnings:


Adjusted Total Segment EBITA


$        1,014


$        1,169



 Margins



24.6 %



28.0 %


1 Represents interest on the Copeland note receivable.



Table 4 cont.

Quarter Ended Dec 31

Quarter Ended Dec 31

2023

2024

Amortization of

Intangibles1

Restructuring

and

Related Costs2

Amortization of

Intangibles1

Restructuring

and

Related Costs2

Final Control

$                   22

$                     7

$                   22

$                     2

Measurement & Analytical

20

3

10

1

Discrete Automation

9

10

8

6

Safety & Productivity

6

6


Intelligent Devices


$                   57


$                   20


$                   46


$                     9

Control Systems & Software

5

1

5

2

Test & Measurement

139

40

105

(1)

AspenTech

122

122


Software and Control


$                 266


$                   41


$                 232


$                     1

Corporate

26


3

3


Total


$                 323


$                   87


$                 278


$                   13


1 Amortization of intangibles includes $49 and $49 reported in cost of sales for the three months ended December 31, 2023 and 2024, respectively.


2 Restructuring and related costs includes $4 reported in cost of sales for the three months ended December 31, 2023. The three months ended December 31, 2024
includes $2 reported in selling, general and administrative expenses.


3 Corporate restructuring of $26 for the three months ended December 31, 2023 is comprised entirely of integration-related stock compensation expense attributable to NI.

Quarter Ended Dec 31


Depreciation and Amortization

2023

2024

Final Control

$                40

$                40

Measurement & Analytical

40

31

Discrete Automation

22

21

Safety & Productivity

14

15


Intelligent Devices


116


107

Control Systems & Software

21

23

Test & Measurement

151

118

AspenTech

123

124


Software and Control


295


265

Corporate

11

11


Total


$              422


$              383

 



Table 5

EMERSON AND SUBSIDIARIES
ADJUSTED CORPORATE AND OTHER SUPPLEMENTAL
(DOLLARS IN MILLIONS, UNAUDITED)

The following table shows the Company’s stock compensation and corporate and other expenses on an adjusted basis.
The Company’s definition of adjusted stock compensation excludes integration-related stock compensation expense. The
Company’s definition of adjusted corporate and other excludes corporate restructuring and related costs, first year
purchase accounting related items and transaction fees, and certain gains, losses or impairments. This metric is useful for
reconciling from total adjusted segment EBITA to the Company’s consolidated adjusted EBITA.

Quarter Ended Dec 31

2023

2024


 Stock compensation (GAAP)


$                  (74)


$                  (68)

    Integration-related stock compensation expense1

30

2


 Adjusted stock compensation (non-GAAP)


$                  (44)


$                  (66)

Quarter Ended Dec 31

2023

2024


 Corporate and other (GAAP)


$                (399)


$                  (57)

 Corporate restructuring and related costs

3

 Acquisition / divestiture costs

130

20

 Amortization of acquisition-related inventory step-up

231


 Adjusted corporate and other (non-GAAP)


$                  (38)


$                  (34)


1 Integration-related stock compensation expense relates to NI and includes $26 and $— reported as restructuring costs for the three months ended December 31, 
2023 and 2024, respectively

 



Table 6

EMERSON AND SUBSIDIARIES
ADJUSTED EBITA & EPS SUPPLEMENTAL
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)

The following tables, which show results on an adjusted EBITA basis and diluted earnings per share on an adjusted basis,
are intended to supplement the Company’s discussion of its results of operations herein. The Company defines adjusted
EBITA as earnings excluding interest expense, net, income taxes, intangibles amortization expense, restructuring
expense, first year purchase accounting related items and transaction fees, and certain gains, losses or impairments.
Adjusted earnings per share excludes intangibles amortization expense, restructuring expense, first year purchase
accounting related items and transaction-related costs, and certain gains, losses or impairments. Adjusted EBITA,
adjusted EBITA margin, and adjusted earnings per share are measures used by management and may be useful for
investors to evaluate the Company’s operational performance.

Quarter Ended Dec 31

2023

2024


Pretax earnings


$             175


$             775


Percent of sales


4.2 %


18.6 %

Interest expense, net

44

8

Interest income from related party1

(31)

Amortization of intangibles

323

278

Restructuring and related costs

87

13

Acquisition/divestiture fees and related costs

134

22

Amortization of acquisition-related inventory step-up

231


Adjusted EBITA


$             963


$          1,096


Percent of sales


23.4 %


26.3 %

Quarter Ended Dec 31

2023

2024


GAAP earnings from continuing operations per share


$            0.29


$            1.02

Amortization of intangibles

0.36

0.31

Restructuring and related costs

0.12

0.02

Acquisition/divestiture fees and related costs

0.17

0.03

Amortization of acquisition-related inventory step-up

0.38

Discrete taxes

(0.10)


Adjusted earnings from continuing operations per share


$            1.22


$            1.38


1 Represents interest on the Copeland note receivable



Table 6 cont.

Quarter Ended December 31, 2024

Pretax
Earnings

Income
Taxes

Earnings from
Cont.
Ops.

Non-
Controlling

Interests3

Net
Earnings
Common
Stockholders

Diluted
Earnings
Per
Share


As reported (GAAP)


$         775


$         182


$         593


$             8


$            585


$        1.02

Amortization of intangibles

278


1

62

216

41

175

0.31

Restructuring and related costs

13


2

13

13

0.02

Acquisition/divestiture fees and related costs

22

5

17

17

0.03


Adjusted (non-GAAP)


$      1,088


$         249


$         839


$           49


$            790


$        1.38

Interest expense, net

8


Adjusted EBITA (non-GAAP)


$      1,096


1 Amortization of intangibles includes $49 reported in cost of sales.


2 Restructuring and related costs includes $2 reported in selling, general and administrative expenses.


3 Represents the non-controlling interest in AspenTech applied to AspenTech’s share of each adjustment presented herein and eliminated from Emerson’s consolidated results. 

 



Table 7

EMERSON AND SUBSIDIARIES
ASPENTECH CONTRIBUTION TO EMERSON RESULTS SUPPLEMENTAL
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)

The following tables reconcile the financial results of AspenTech reported to its shareholders with the amounts included in
Emerson’s consolidated financial results. Emerson currently owns approximately 57 percent of the common shares
outstanding of AspenTech, a separately traded public company (NASDAQ: AZPN), and consolidates AspenTech in its
financial results. The 43 percent non-controlling interest in AspenTech is removed from Emerson’s net earnings common
stockholders through the non-controlling interest line item. AspenTech is also one of Emerson’s segments and its GAAP
segment earnings is reconciled below to its consolidated impact to clarify that certain items are reported outside of its
segment earnings within Emerson corporate, including interest income and stock compensation. 

Quarter Ended December 31, 2024

Pretax
Earnings

Income
Taxes
(Benefit)

Earnings
from
Cont.
Ops.

Non-
Controlling
Interests4

Net
Earnings
Common
Stockholders

Diluted
Earnings
Per
Share


Standalone reporting (GAAP)


$           17


1


$           (3)


$           20

 Other

2

(2)


Reported in Emerson
consolidation (GAAP)


17


(1)


18


8


10


$        0.02


Adjustments:

Amortization of intangibles

122


2

26

96

41

55

0.09


Adjusted (Non-GAAP)


$         139


$           25


$         114


$           49


$             65


$        0.11

 Interest income

(17)


3

 Stock compensation

15


3


Adjusted segment EBITA (non-
GAAP)


$         137



Reconciliation to Segment EBIT


Pre-tax earnings


$           17

Interest income

(17)


3

Stock compensation

15


3


Segment EBIT (GAAP)


$           15

Amortization of intangibles

122


2


Adjusted segment EBITA (non-
GAAP)


$         137


1 Amount reflects AspenTech’s pretax earnings for the three months ended December 31, 2024 as reported in its quarterly earnings release 8-K.


2 Amortization of intangibles includes $49 reported in cost of sales.


3 Reported in Emerson corporate line items.


4 Represents the non-controlling interest in AspenTech applied to each adjustment presented herein and eliminated from Emerson’s consolidated results.

 


Reconciliations of Non-GAAP Financial Measures & Other



Table 8

Reconciliations of Non-GAAP measures with the most directly comparable GAAP measure (dollars in millions,
except per share amounts). See tables 4 through 7 for additional non-GAAP reconciliations.


2025 Q1 Underlying Sales Change


Reported


(Favorable) /
Unfavorable FX


(Acquisitions) /
Divestitures


Underlying

Final Control

4 %

1 %

— %

5 %

Measurement & Analytical

3 %

1 %

— %

4 %

Discrete Automation

(5) %

1 %

— %

(4) %

Safety & Productivity

(3) %

— %

— %

(3) %


Intelligent Devices


1 %


1 %


— %


2 %

Control Systems & Software

2 %

1 %

— %

3 %

Test & Measurement

(6) %

1 %

— %

(5) %

AspenTech

18 %

— %

— %

18 %


Software and Control


3 %


1 %


— %


4 %


Emerson


1 %


1 %


— %


2 %


Underlying Growth Guidance


2025 Q2
Guidance


2025

Guidance

Reported (GAAP)

(0.5%) – 0.5%

1.5% – 3.5%

(Favorable) / Unfavorable FX

~1.5 pts

~1.5 pts

(Acquisitions) / Divestitures


Underlying (non-GAAP)


1% – 2%


3% – 5%


2024 Q1 Adjusted Segment EBITA


EBIT



EBIT 



Margin


Amortization

of

Intangibles


Restructuring
and Related
Costs


Adjusted
Segment
EBITA



Adjusted
Segment
EBITA
Margin


Final Control

$               194


20.6 %

$                 22

$                     7

$               223


23.6 %

Measurement & Analytical

235


24.9 %

20

3

258


27.3 %

Discrete Automation

97


15.8 %

9

10

116


18.9 %

Safety & Productivity

68


21.1 %

6

74


23.1 %


Intelligent Devices


$               594



21.0 %


$                 57


$                  20


$               671



23.8 %

Control Systems & Software

149


22.1 %

5

1

155


23.1 %

Test & Measurement

(78)


(20.4) %

139

40

101


26.5 %

AspenTech

(35)


(13.7) %

122

87


33.6 %


Software and Control


$                 36



2.8 %


$               266


$                  41


$               343



26.1 %


2025 Q1 Adjusted Segment EBITA


EBIT



EBIT 



Margin


Amortization

of

Intangibles


Restructuring
and Related
Costs


Adjusted
Segment
EBITA



Adjusted
Segment
EBITA
Margin


Final Control

$               236


24.2 %

$                 22

$                     2

$               260


26.6 %

Measurement & Analytical

285


29.2 %

10

1

296


30.4 %

Discrete Automation

98


16.9 %

8

6

112


19.3 %

Safety & Productivity

67


21.6 %

6

73


23.8 %


Intelligent Devices


$               686



24.1 %


$                 46


$                     9


$               741



26.1 %

Control Systems & Software

193


27.9 %

5

2

200


28.8 %

Test & Measurement

(13)


(3.6) %

105

(1)

91


25.5 %

AspenTech

15


4.8 %

122

137


45.1 %


Software and Control


$               195



14.4 %


$               232


$                     1


$               428



31.6 %


Total Adjusted Segment EBITA


2024 Q1


2025 Q1

Pretax earnings (GAAP)

$                 175

$                 775


Margin


4.2 %


18.6 %

Corporate items and interest expense, net

455

106

Amortization of intangibles

323

278

Restructuring and related costs

61

10


Adjusted segment EBITA (non-GAAP)


$              1,014


$              1,169


Margin


24.6 %


28.0 %


Free Cash Flow


2024 Q1


2025 Q1


2025E

($ in billions)

Operating cash flow (GAAP)

$                 444

$                 777

$3.6 – $3.7

Capital expenditures

(77)

(83)

~(0.4)


Free cash flow (non-GAAP)


$                 367


$                 694


$3.2 – $3.3

Note 1: Underlying sales and orders exclude the impact of currency translation and significant acquisitions and divestitures.

Note 2: All fiscal year 2025E figures are approximate, except where range is given.

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/emerson-reports-first-quarter-2025-results-updates-2025-outlook-302368226.html

SOURCE Emerson