Emerson gives outlook for next year as fourth-quarter sales climb

Emerson (EMR) said on Nov. 4 that its fourth-quarter adjusted earnings per share rose 15% to $1.86, in line with the $1.87 consensus estimate. Revenue was $5.20 billion, also in line with the $5.17 billion estimate, a regulatory filing showed.

Shares were little changed in regular trading as of 9:55 a.m. ET.

Emerson, headquartered in St. Louis, Missouri, sells automation solutions in markets around the world. The company also declared a 7% increase in its quarterly cash dividend and gave its first outlook for fiscal 2027.

Here's how the company did:

• Net sales: $5.20 billion vs. $4.86 billion a year earlier
• Adjusted EPS: $1.86 vs. $1.87 expected, and $1.62 a year earlier
• GAAP EPS: $1.33 vs. $1.07 a year earlier
• Pretax earnings: $997 million vs. $760 million a year earlier
• Operating cash flow: $1.08 billion vs. $1.01 billion a year earlier
• Underlying orders: up 14% from a year earlier

Underlying orders rose 14% in the quarter. The company said demand was broad-based across all business groups and regions.

"Emerson capped a strong 2026 with fourth quarter sales and profitability exceeding expectations," said Emerson President and Chief Executive Officer Lal Karsanbhai. "Underlying orders were up 14%, supported by exceptional long-cycle project activity in our growth verticals."

Here's how other Emerson segments did during the quarter:

• Control Systems & Software: sales of $1.25 billion, up 14% from a year earlier
• Software & Systems: sales of $1.71 billion, up 14%
• Intelligent Devices: sales of $2.92 billion, up 5%
• Safety & Productivity: sales of $573 million, up 2%

Adjusted segment EBITA was $1.51 billion, or 29.1% of sales, against $1.33 billion, or 27.5%, a year earlier. Sales grew 9% in the Americas, 1% in Europe and 7% in Asia, Middle East and Africa.

Segment results

Test & Measurement sales rose 14% to $465 million. Sensors sales rose 4% to $1.19 billion, and Final Control sales rose 5% to $1.73 billion.

Restructuring and related costs were $63 million in the quarter, down from $81 million a year earlier. Acquisition and divestiture fees and related costs were $32 million, down from $45 million.

2027 outlook

The company expects first-quarter adjusted EPS of $1.58 to $1.62, and adjusted EPS of about $7.25 for fiscal 2027. GAAP EPS is expected at about $5.70 for the year.

Operating cash flow is expected at $4.3 billion to $4.4 billion in fiscal 2027, and free cash flow at $3.8 billion to $3.9 billion. The outlook assumes about $3.8 billion of total capital returned, including about $2.5 billion of share repurchases and about $1.3 billion of dividends.

Karsanbhai said, "We have confidence in our 2027 plans given our robust backlog and favorable demand trends in our growth verticals."

Cash and capital returns

Full-year operating cash flow was $3.98 billion, up from $3.68 billion a year earlier. Free cash flow was $3.54 billion, up from $3.25 billion.

Emerson also declared a quarterly cash dividend of 59.5 cents per share, a 7% increase, payable Dec. 10 to stockholders of record on Nov. 13.