Emerson Electric · Earnings release

Emerson Reports First Quarter 2025 Results; Updates 2025 Outlook

ST. LOUIS (February 5, 2025) - 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)

Change

Underlying Orders2

1%

Net Sales

1%

Underlying Sales3

2%

Pretax Earnings

Margin

Adjusted Segment EBITA4

Margin

GAAP Earnings Per Share

Adjusted Earnings Per Share5

Operating Cash Flow

Free Cash Flow

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.”

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.

G1Net Sales Growth

G2Underlying Sales Growth

G3Earnings Per Share

Amortization of Intangibles

Restructuring / Related Costs

Acquisition / Divestiture Fees and Related Costs

G4Adjusted Earnings Per Share

G5Operating Cash Flow

G6Free Cash Flow

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, 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.

Page 2

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 Russia-Ukraine 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

Joele Frank, Wilkinson Brimmer Katcher

(tables attached)

Page 3

Table 1

EMERSON AND SUBSIDIARIES

CONSOLIDATED OPERATING RESULTS

(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)

Quarter Ended Dec 31

Net sales

$

$

Cost and expenses

Cost of sales

SG&A expenses

Other deductions, net

Interest expense, net

8

Interest income from related party1

—

Earnings from continuing operations before income taxes

Income taxes

Earnings from continuing operations

Discontinued operations, net of tax

—

Net earnings

Less: Noncontrolling interests in subsidiaries

8

Net earnings common stockholders

$

$

Earnings common stockholders

Earnings from continuing operations

$

$

Discontinued operations

—

Net earnings common stockholders

$

$

Diluted avg. shares outstanding

Diluted earnings per share common stockholders

Earnings from continuing operations

$

$

Discontinued operations

—

Diluted earnings per common share

$

$

Quarter Ended Dec 31

Other deductions, net

Amortization of intangibles

$

$

Restructuring costs

Other

Total

$

$

1 Represents interest on the Copeland note receivable

Page 4

Table 2

EMERSON AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(DOLLARS IN MILLIONS, UNAUDITED)

Assets

Cash and equivalents

$

$

Receivables, net

Inventories

Other current assets

Total current assets

Property, plant & equipment, net

Goodwill

Other Intangibles

Other

Total assets

$

$

Liabilities and equity

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

$

$

Accounts payable

Accrued expenses

Total current liabilities

Long-term debt

Other liabilities

Equity

Common stockholders' equity

Noncontrolling interests in subsidiaries

Total equity

Total liabilities and equity

$

$

Page 5

Table 3

EMERSON AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN MILLIONS, UNAUDITED)

Three Months Ended Dec 31

Operating activities

Net earnings

$

$

Earnings from discontinued operations, net of tax

—

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

Depreciation and amortization

Stock compensation

Amortization of acquisition-related inventory step-up

—

Changes in operating working capital

Other, net

Cash from continuing operations

Cash from discontinued operations

—

Cash provided by operating activities

Investing activities

Capital expenditures

Purchases of businesses, net of cash and equivalents acquired

Other, net

Cash from continuing operations

Cash from discontinued operations

1

—

Cash used in investing activities

Financing activities

Net increase in short-term borrowings

2

Payments of long-term debt

—

(2)

Dividends paid

Purchases of common stock

AspenTech purchases of common stock

—

Other, net

Cash provided by (used in) financing activities

Effect of exchange rate changes on cash and equivalents

7

Decrease in cash and equivalents

Beginning cash and equivalents

Ending cash and equivalents

$

$

Page 6

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

Reported

Underlying

Sales

Final Control

$

$

4

%

5

%

Measurement & Analytical

3

%

4

%

Discrete Automation

(5)

%

(4)

%

Safety & Productivity

(3)

%

(3)

%

Intelligent Devices

$

$

1

%

2

%

Control Systems & Software

2

%

3

%

Test & Measurement

(6)

%

(5)

%

AspenTech

%

%

Software and Control

$

$

3

%

4

%

Eliminations

Total

$

$

1

%

2

%

Sales Growth by Geography

Quarter Ended Dec 31

Americas

3

%

Europe

(2)

%

Asia, Middle East & Africa

4

%

Page 7

Table 4 cont.

Quarter Ended Dec 31

Quarter Ended Dec 31

As Reported (GAAP)

Adjusted EBITA

(Non-GAAP)

As Reported (GAAP)

Adjusted EBITA

(Non-GAAP)

Earnings

Final Control

$

$

$

$

Margins

%

%

%

%

Measurement & Analytical

Margins

%

%

%

%

Discrete Automation

Margins

%

%

%

%

Safety & Productivity

Margins

%

%

%

%

Intelligent Devices

$

$

$

$

Margins

%

%

%

%

Control Systems & Software

Margins

%

%

%

%

Test & Measurement

Margins

%

%

%

%

AspenTech

Margins

%

%

%

%

Software and Control

$

$

$

$

Margins

%

%

%

%

Corporate items and interest expense, net:

Stock compensation

Unallocated pension and postretirement costs

Corporate and other

Interest expense, net

—

(8)

—

Interest income from related party1

—

—

—

Pretax Earnings / Adjusted EBITA

$

$

$

$

Margins

%

%

%

%

Supplemental Total Segment Earnings:

Adjusted Total Segment EBITA

$

$

Margins

%

%

1 Represents interest on the Copeland note receivable.

Page 8

Table 4 cont.

Quarter Ended Dec 31

Quarter Ended Dec 31

Amortization of

Intangibles1

Restructuring

and

Related Costs2

Amortization of

Intangibles1

Restructuring

and

Related Costs2

Final Control

$

$

7

$

$

2

Measurement & Analytical

3

1

Discrete Automation

9

8

6

Safety & Productivity

6

—

6

—

Intelligent Devices

$

$

$

$

9

Control Systems & Software

5

1

5

2

Test & Measurement

(1)

AspenTech

—

—

Software and Control

$

$

$

$

1

Corporate

—

3

—

3

Total

$

$

$

$

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

Final Control

$

$

Measurement & Analytical

Discrete Automation

Safety & Productivity

Intelligent Devices

Control Systems & Software

Test & Measurement

AspenTech

Software and Control

Corporate

Total

$

$

Page 9

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

Stock compensation (GAAP)

$

$

Integration-related stock compensation expense1

2

Adjusted stock compensation (non-GAAP)

$

$

Quarter Ended Dec 31

Corporate and other (GAAP)

$

$

Corporate restructuring and related costs

—

3

Acquisition / divestiture costs

Amortization of acquisition-related inventory step-up

—

Adjusted corporate and other (non-GAAP)

$

$

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

Pretax earnings

$

$

Percent of sales

%

%

Interest expense, net

8

Interest income from related party1

—

Amortization of intangibles

Restructuring and related costs

Acquisition/divestiture fees and related costs

Amortization of acquisition-related inventory step-up

—

Adjusted EBITA

$

$

Percent of sales

%

%

Quarter Ended Dec 31

GAAP earnings from continuing operations per share

$

$

Amortization of intangibles

Restructuring and related costs

Acquisition/divestiture fees and related costs

Amortization of acquisition-related inventory step-up

—

Discrete taxes

—

Adjusted earnings from continuing operations per share

$

$

1 Represents interest on the Copeland note receivable

Table 6 cont.

Pretax

Earnings

Income

Taxes

Earnings from

Cont.

Ops.

Non-Controlling

Interests3

Net

Earnings

Common

Stockholders

Diluted

Earnings

Per

Share

As reported (GAAP)

$

$

$

$

8

$

$

Amortization of intangibles

1

Restructuring and related costs

2

—

—

Acquisition/divestiture fees and related costs

5

—

Adjusted (non-GAAP)

$

$

$

$

$

$

Interest expense, net

8

Adjusted EBITA (non-GAAP)

$

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.

Pretax

Earnings

Income

Taxes

(Benefit)

Earnings from

Cont.

Ops.

Non-Controlling

Interests4

Net

Earnings

Common

Stockholders

Diluted

Earnings

Per

Share

Standalone reporting (GAAP)

$

1

$

(3)

$

Other

—

2

(2)

Reported in Emerson consolidation (GAAP)

(1)

8

$

Adjustments:

Amortization of intangibles

2

Adjusted (Non-GAAP)

$

$

$

$

$

$

Interest income

3

Stock compensation

3

Adjusted segment EBITA (non-GAAP)

$

Reconciliation to Segment EBIT

Pre-tax earnings

$

Interest income

3

Stock compensation

3

Segment EBIT (GAAP)

$

Amortization of intangibles

2

Adjusted segment EBITA (non-GAAP)

$

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.

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

%

—

%

—

%

%

Software and Control

3

%

1

%

—

%

4

%

Emerson

1

%

1

%

—

%

2

%

Underlying Growth Guidance

Guidance

Reported (GAAP)

(Favorable) / Unfavorable FX

(Acquisitions) / Divestitures

-

-

Underlying (non-GAAP)

EBIT

EBIT

Margin

Amortization

of

Intangibles

Restructuring and Related Costs

Adjusted Segment EBITA

Adjusted Segment EBITA Margin

Final Control

$

%

$

$

7

$

%

Measurement & Analytical

%

3

%

Discrete Automation

%

9

%

Safety & Productivity

%

6

—

%

Intelligent Devices

$

%

$

$

$

%

Control Systems & Software

%

5

1

%

Test & Measurement

%

%

AspenTech

%

—

%

Software and Control

$

%

$

$

$

%

EBIT

EBIT

Margin

Amortization

of

Intangibles

Restructuring and Related Costs

Adjusted Segment EBITA

Adjusted Segment EBITA Margin

Final Control

$

%

$

$

2

$

%

Measurement & Analytical

%

1

%

Discrete Automation

%

8

6

%

Safety & Productivity

%

6

—

%

Intelligent Devices

$

%

$

$

9

$

%

Control Systems & Software

%

5

2

%

Test & Measurement

%

(1)

%

AspenTech

%

—

%

Software and Control

$

%

$

$

1

$

%

Total Adjusted Segment EBITA

Pretax earnings (GAAP)

$

$

Margin

%

%

Corporate items and interest expense, net

Amortization of intangibles

Restructuring and related costs

Adjusted segment EBITA (non-GAAP)

$

$

Margin

%

%

Free Cash Flow

($ in billions)

Operating cash flow (GAAP)

$

$

Capital expenditures

Free cash flow (non-GAAP)

$

$

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.