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• Underlying Orders Growth: 4% growth, exceeding expectations.

• Process and Hybrid Businesses Growth: Up 6%.

• Discrete Businesses Growth: Turned positive with Test and Measurement up 8%.

• Adjusted Earnings Per Share (EPS): Exceeded guidance by $0.06, reaching $1.48, up 9% year-over-year.

• Gross Profit Margin: 53.5%, a 130 basis point improvement year-over-year.

• Adjusted Segment EBITDA Margin: 28%, a 200 basis point improvement versus the prior year.

• Free Cash Flow: $738 million, a margin of 17%, up 14% year-over-year.

• Backlog: Increased to $7.5 billion with a book to bill ratio of 1.04.

• Guidance for Adjusted EPS: Raised to $5.90 to $6.05 per share.

• Free Cash Flow Guidance: $3.1 billion to $3.2 billion.

• Shareholder Returns: Expecting to return $2.3 billion through dividends and share repurchase.

• Tariff Impact Mitigation: Gross exposure of $245 million in 2025 expected to be fully mitigated.

• Industrial Software Annual Contract Value (ACV): Up 11% year-over-year.

• Software and Control Growth: 7% driven by higher software sales.

• Intelligent Devices Performance: Flat due to safety and productivity and discrete automation.

• Warning! GuruFocus has detected 3 Warning Signs with COTY.

Release Date: May 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Emerson Electric Co (NYSE:EMR) delivered strong second-quarter results with underlying orders growth of 4%, exceeding expectations.

• The company reported record margin performance, with gross profit margin improving by 130 basis points year-over-year.

• Adjusted earnings per share exceeded guidance by $0.06, reflecting strong operational performance.

• Emerson Electric Co (NYSE:EMR) completed the buy-in of AspenTech, which is expected to be modestly accretive to adjusted EPS in 2025.

• The company is confident in its plans for the year, raising the midpoint of its adjusted EPS guidance to between $5.90 and $6.05 per share.

Negative Points

• Emerson Electric Co (NYSE:EMR) is operating in a period of unusual volatility, which poses risks to its business outlook.

• The company faces a gross exposure of $245 million in 2025 due to tariffs, although it expects to fully mitigate this impact.

• There is a muted recovery expected in factory automation, with continued declines in the automotive sector.

• The company noted pockets of reduced demand outlook, including muted expectations in China and weakened demand in safety and productivity.

• Emerson Electric Co (NYSE:EMR) expects the second half of the year to have lower profitability due to the effect of tariffs and segment mix.