Emerson Q2 Earnings Top Estimates, Software and Control Sales Rise

Emerson Electric Co. EMR reported second-quarter fiscal 2025 (ended March 31, 2025) adjusted earnings of $1.48 per share, which beat the Zacks Consensus Estimate of $1.42. The bottom line increased 9% year over year.

Emerson’s net sales of $4.43 billion beat the consensus estimate of $4.38 billion. The top line increased 1% year over year, driven by the solid performance of Software and Control segment. The company’s underlying sales were up 2% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

How EMR Business Segments Performed

Effective from the first quarter of fiscal 2023, the company started reporting under two segments, namely Intelligent Devices and Software & Control.

The Intelligent Devices segment’s net sales were $3.03 billion, down 1% year over year. Our estimate was $3.06 billion. The segment consists of four subgroups, namely Final Control, Measurement & Analytical, Discrete Automation and Safety & Productivity.

Final Control’s sales increased 2% year over year to $1.07 billion. Measurement & Analytical generated sales of $1 billion, down 1% year over year. Discrete Automation’s sales totaled $615 million, reflecting a decline of 3% on a year-over-year basis. Safety & Productivity’s sales decreased 7% year over year to $339 million.

The Software and Control Automation Solutions segment generated net sales of $1.42 billion, up 7% year over year. Our estimate was $1.34 billion. The segment consists of two subgroups, namely Control Systems & Software and Test & Measurement.

Control Systems & Software reported sales of $1.06 billion, reflecting an increase of 10% year over year. Test & Measurement sales were $359 million, declining 2% year over year.

Emerson’s Margin Details

The cost of sales decreased 1.5% year over year to $2.06 billion. The pretax earnings margin was 14.2% compared with 16.3% in the year-ago period. Adjusted EBITA margin was 25.8% compared with 24.5% in the year-earlier quarter. Selling, general and administrative expenses declined 1% year over year to $1.28 billion.

EMR’s Balance Sheet & Cash Flow

Exiting the fiscal second quarter, Emerson had cash and cash equivalents of $1.89 billion compared with $3.6 billion at the end of fiscal 2024 (ended September 2024). Long-term debt was $8.18 billion compared with $7.2 billion at the end of fiscal 2024.

In the same period, the company generated net cash of $1.02 billion from operating activities, up 12.1% year over year. Capital expenditure was $170 million, up from $159 million in the year-ago period. Emerson paid out dividends of $598 million and repurchased shares worth $1.12 billion in the same period.

Emerson’s Q3 Fiscal 2025 Outlook

For the third quarter of fiscal 2025 (ending June 2025), Emerson anticipates year-over-year net sales growth to be in the band of 4.5–5.5% and underlying sales growth to be in the range of 3.5-4.5%.

EMR anticipates adjusted earnings per share to be in the range of $1.48–$1.52.

EMR’s FY25 Outlook

Emerson currently anticipates net sales growth of approximately 4% from the year-earlier level compared with 1.5-3.5% expected earlier. Underlying sales are expected to rise approximately 4%.

EMR continues to project earnings per share to be in the range of $4.05-$4.20 compared with $4.42-$4.62 expected earlier. Adjusted earnings per share are estimated to be in the range of $5.90 - $6.05 compared with $5.85-$6.05 estimated earlier. The company expects operating cash flow to be in the band of $3.5-$3.6 billion. Free cash flow is estimated to be in the range of $3.1-$3.2 billion.

EMR’s Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

AZZ Inc. AZZ came out with quarterly earnings of $0.98 per share, beating the Zacks Consensus Estimate of $0.95. This compares with earnings of $0.93 per share a year ago.

AZZ reported revenues of $351.88 million, missing the consensus estimate by 3.77%. This compares with year-ago revenues of $366.5 million. 

Valmont Industries VMI reported revenues of $969.31 million in the second quarter of 2025, declining 0.9% on a year-over-year basis. Earnings per share of $4.32 for the same period compare with $4.32 a year ago.

The reported revenues compare with the Zacks Consensus Estimate of $975.6 million. The company delivered an earnings surprise of 1.89%, with the consensus estimate being $4.24 per share.

Pentair plc PNR came out with quarterly earnings of $1.11 per share in the second quarter of 2025, beating the Zacks Consensus Estimate of $1.01. This compares with earnings of $0.94 per share a year ago.

Pentair posted revenues of $1.01 billion for the quarter, surpassing the consensus estimate by 2.68%. This compares with year-ago revenues of $1.02 billion.

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This article originally published on Zacks Investment Research (zacks.com).

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