Emerson’s fourth quarter results received a positive market response, as the company met Wall Street’s revenue expectations and posted a modest beat on non-GAAP earnings per share. Management attributed the quarter’s solid performance to broad-based demand for automation solutions, particularly in North America, India, and the Middle East, with power generation, LNG, and test and measurement segments standing out. CEO Surendralal Karsanbhai emphasized that “operational excellence and secular tailwinds in electrification, energy security, and near-shoring” were key contributors, while ongoing investments in AI-enabled products and robust project wins supported profitability.
Is now the time to buy EMR? Find out in our full research report (it’s free for active Edge members).
Emerson Electric (EMR) Q4 CY2025 Highlights:
- Revenue: $4.35 billion vs analyst estimates of $4.35 billion (4.1% year-on-year growth, in line)
- Adjusted EPS: $1.46 vs analyst estimates of $1.41 (3.4% beat)
- Adjusted EBITDA: $1.14 billion vs analyst estimates of $1.22 billion (26.3% margin, 6.8% miss)
- Management slightly raised its full-year Adjusted EPS guidance to $6.48 at the midpoint
- Operating Margin: 24.6%, in line with the same quarter last year
- Market Capitalization: $89.93 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Emerson Electric’s Q4 Earnings Call
- Andrew Kaplowitz (Citigroup) asked about the sustainability of order growth in power and LNG and whether behind-the-meter opportunities could extend the run rate. CEO Surendralal Karsanbhai cited modernization and data center projects as current drivers and expects new generating capacity to become more prominent over time.
- Nigel Coe (Wolfe Research) questioned the margin decline in the Sensors segment and the impact of DRAM chip inflation. CFO Michael Baughman pointed to foreign exchange and geographic mix as main factors, while COO Ram Krishnan said DRAM inflation was manageable and had minimal exposure in Sensors.
- Shigusa Kotoko (JPMorgan) followed up on order backlog phasing and its impact on second-half sales. Krishnan explained that backlog is diversified across businesses and is expected to support accelerated growth in the latter half of the year.
- Jeff Sprague (Vertical Research Partners) inquired about margin trends and persistent weakness in chemicals and automotive, especially in Europe and China. Krishnan and Baughman indicated that margins reflect software renewal dynamics and that chemical and automotive sectors remain challenged without recovery in sight.
- Deane Dray (RBC Capital Markets) requested updates on tariff mitigation and green shoots in China. Krishnan shared that recent tariff relief may provide upside, while test and measurement and power generation in China are showing some positive activity despite broader market softness.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be focused on (1) the pace of backlog conversion in North America and other growth markets, (2) adoption rates and commercial impact of new AI-enabled software products like Nigel.ai and DeltaV, and (3) stabilization or further deterioration in Europe and China, especially in chemicals and automotive. Progress in tariff mitigation and supply chain resilience will also be key to tracking operational execution.
Emerson Electric currently trades at $160.31, up from $152.10 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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