Emerson (NYSE: EMR), a global leader in industrial technology and automation, announced its robust second quarter results for the period ending March 31, 2025, along with an optimistic update on fiscal year 2025 outlook. This comprehensive financial disclosure provides valuable insights into Emerson’s operational performance, strategic initiatives, and growth trajectory.
Who: Emerson and its management team led by President and CEO Lal Karsanbhai. What: Second quarter 2025 financial results and updated full-year guidance. Declaration of a quarterly dividend. When: Quarter ended March 31, 2025, announcement made May 7, 2025. Where: St. Louis, Missouri, the company’s headquarters.
Net Sales rose by 1% from \(4.376 billion to \)4.432 billion.
Underlying sales growth was 2%, with underlying orders increasing by 4% (excluding AspenTech).
Adjusted Segment EBITA (earnings before interest, taxes, and amortization) improved by 9% to $1.24 billion, with margin expansion from 26.0% to 28.0% (an increase of 200 basis points).
GAAP Earnings Per Share (EPS) declined by 9% to \(0.86 from \)0.95 due to acquisition related costs and other factors.
Adjusted EPS improved by 9% to $1.48.
Operating Cash Flow grew by 13% to $825 million.
Free Cash Flow increased by 14% to $738 million, reflecting strong operational cash generation.
Control Systems & Software segment exhibited robust growth with a 10% reported sales increase and an impressive adjusted EBITA margin jump to 35.0%, substantially ahead of Q2 2024’s 14.8%.
Software and Control segment sales increased 7%, with margins soaring to 32.3% from 15.1%.
Intelligent Devices maintained stable sales and margins with slight margin improvement.
Safety & Productivity segment saw a 7% sales decline but retained industry-leading margins at 24.3%, affirming its cash flow strength.
The quarter marked the completion of Emerson’s acquisition of AspenTech on March 12, 2025, integrating the company as an independent business unit under the Control Systems & Software segment. This acquisition contributes to both revenue growth and margin expansion and reflects Emerson’s commitment to portfolio transformation and enhanced software capabilities.
Net sales growth guidance has been increased to approximately 4%, suggesting stable global demand amid ongoing economic uncertainty and tariff environments.
Adjusted EPS guidance raised to a midpoint range of \(5.90 to \)6.05, reflecting improved profitability after integration of AspenTech.
Operating cash flow expected between \(3.5 billion and \)3.6 billion.
Free cash flow anticipated in the range of \(3.1 billion to \)3.2 billion.
Shareholder returns are targeted at approximately \(2.3 billion, including \)1.1 billion in share repurchases and $1.2 billion in dividends.
Emerson has consistently demonstrated operational excellence and effective tariff navigation, themes emphasized in prior earnings calls. The strong cash flow metrics and margin enhancements align with management’s commentary on leveraging secular growth drivers and technology-led automation demand despite macroeconomic headwinds.
CEO Lal Karsanbhai stated, “Emerson delivered strong underlying orders in the second quarter with margin expansion and adjusted earnings exceeding our expectations. Our Emerson Management System and leading technology continue to drive value for customers and shareholders.”
The continued margin expansion and cash flow generation underscore Emerson’s capital efficiency and resilience amid challenging global conditions. The 200 basis point margin increase alone translates to significantly improved profitability on $4.4 billion in quarterly sales, enhancing shareholder value and operational flexibility.
Emerson’s Q2 2025 earnings report and updated outlook affirm the company’s strategic positioning as a leader in industrial automation and technology. With strong execution on acquisitions and operational metrics, Emerson is well positioned to capitalize on long-term growth opportunities in key technology-driven segments.
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