Emerson Delivers Q2 Profit Thanks To Cost Discipline, Raises The Bar for FY25

Emerson Electric Company (NYSE:EMR) shares are trading higher on Wednesday after the company reported second-quarter FY25 results.

Net sales growth of 1% year over year (Y/Y) to $4.43 billion, beating the consensus of $4.38 billion.

Underlying sales were up 2% Y/Y, and underlying orders increased by 4% Y/Y in the quarter.

Sales by Segments: Final Control $1.07 billion (+2% Y/Y), Measurement & Analytical $1.00 billion (-1% Y/Y), Discrete Automation $615 million (-3% Y/Y); Safety & Productivity $339 million (-7% Y/Y), Control Systems & Software $1.06 billion (+10% Y/Y), and Test & Measurement $359 million (-2% Y/Y).

Adjusted Segment EBITA was $1.24 billion compared to $1.139 billion in the prior year quarter and the margin improved to 28.0% from 26.0% a year ago quarter.

Adjusted EPS improved 9% Y/Y to $1.48, beating the consensus of $1.41.

Emerson’s operating cash flow for the quarter totaled $825 million, compared to $733 million in the prior year; free cash flow was $738 million (+14% Y/Y).

Emerson held cash and equivalents of $1.89 billion as of March-end.

Dividend: Emerson declared a quarterly cash dividend per share of $0.5275, payable on June 10, to stockholders of record on May 16, 2025.

We achieved another quarter of record gross profit and adjusted segment EBITA margins, supported by our Emerson Management System, 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.” Emerson president and CEO Lal Karsanbhai said.

“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.”

Outlook: For FY25, Emerson Electric raised FY25 sales guidance from $17.75 billion-$18.10 billion to $18.19 billion vs $17.91 billion and adjusted EPS from $5.85-$6.05 to $5.90-$6.05 vs consensus of $5.91.

For the third quarter, the company projects net sales growth of $4.577 billion-$4.621 billion vs street view of $4.53 billion and adjusted EPS of $1.48-$1.52 vs. consensus of $1.54.

Emerson expects to return around $3.2 billion to shareholders through around $2.0 billion of share buyback and about $1.2 billion of dividend payments for FY25.

Emerson expects an operating cash flow of $3.5 billion – $3.6 billion and an FCF of $3.1 billion – $3.2 billion for FY25.

Investors can gain exposure to the stock via ProShares S&P Kensho Smart Factories ETF (NYSE:MAKX) and Gabelli Automation ETF (NYSE:GAST)

Price Action: EMR shares are up 1.69% at $109.09 at the last check on Wednesday.

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