EMR

Bond markets are reacting strongly to inflation risk and central bank signals, which keeps many investors focused on big, liquid stocks. That creates an opening in smaller companies that get far less attention, even when their fundamentals look solid. This article explains why this setup suits a High-Quality Undiscovered Gems approach and highlights 3 stocks from the screener that may interest patient, research-driven investors. The 3 stocks below are a small sample of what this High-Quality Undiscovered Gems theme is surfacing, and the full screen currently flags 8 more companies with equally compelling stories that are not covered here. To identify and analyze those extra opportunities in the same way, head straight to the High-Quality Undiscovered Gems screener. Overview: Emerald Resources is a Perth based gold company focused on exploring and operating mineral reserves, with its 100% owned Okvau Gold Project in Cambodia as the flagship asset that anchors its role in the High Quality Undiscovered Gems theme. The business is now firmly oriented around gold rather than its historical oil and gas roots. Operations: Emerald Resources generates about A$601 million from mine operations and A$11 million from other activities, with almost all revenue of roughly A$609 million coming from Cambodia and only a small amount from Western Australia. Market Cap: A$4.71b Emerald Resources provides exposure to a single, meaningful engine in Okvau, a producing gold project in Cambodia that is currently generating strong numbers and has scope for further resource and production progress. Earnings and margins have improved sharply, with net profit margin at 42.4%. This supports the High Quality Undiscovered Gems idea of a small cap with real cash flow rather than just a story. At the same time, growth is tied to one key asset and funded through external borrowing, so debt terms and project delivery are important considerations. For investors who can accept that risk, the combination of efficient operations, experienced management and ongoing Okvau milestones may be more interesting than many better known gold stocks. Emerald Resources is already producing solid cash flow from Okvau, yet many investors still treat it as a small speculative gold play. To see how that perception lines up with the balance sheet and funding picture, review the Emerald Resources financial health report Overview: Australian Ethical Investment is a Sydney based fund manager that runs equity, fixed income and balanced funds for clients, with a clear focus on ethical mandates that often tilt toward smaller, under covered companies with solid fundamentals. By actively selecting these overlooked small caps for its portfolios, Australian Ethical effectively gives investors access to a curated pool of potential High Quality Undiscovered Gems through a single listed company. Operations: Australian Ethical Investment generates about A$130 million in funds management revenue, all from its Australian operations. Market Cap: A$534 million Australian Ethical Investment may appeal to investors who like the idea of owning a listed gateway into carefully researched, under the radar small caps rather than picking individual stocks individually. Earnings and revenue have been growing in recent years, supported by high Return on Equity and improving profit margins. This indicates that the funds platform has been scaling efficiently. At the same time, fee pressure, heavier regulation around ESG and rising competition from larger managers all pose real risks to future profitability. In addition, the funding structure leans on external borrowings and the company has an uneven dividend record. Overall, this is a business that combines attractive growth characteristics with financial and regulatory questions that thoughtful investors may wish to examine more closely. Australian Ethical Investment is scaling a high margin funds platform that channels capital into under the radar companies, yet the real story sits in how that engine copes with fee pressure and tighter ESG rules. To see how the full picture of growth potential and regulatory risk fits together, start with the analysis report for Australian Ethical Investment. Overview: EDU Holdings is a Sydney based tertiary education group that runs Ikon and Australian Learning Group, offering undergraduate, postgraduate and vocational courses in counselling, community services, aged care and early childhood education to domestic and international students through campuses and online delivery. Its tight focus on skills in demand human services education is the clearest link to the High Quality Undiscovered Gems theme, where a niche provider with real qualifications can be overlooked by larger funds. Market Cap: A$138.2 million EDU Holdings gives you exposure to a focused higher education and vocational provider that is already serving skills shortage areas like counselling, aged care and early childhood education, which many investors still bucket with lower quality international student plays. Recent half year numbers to June 30, 2026 showed revenue of A$54.28 million and net income of A$9.32 million, indicating healthy profitability for a micro cap that large institutions largely ignore. The interest comes from that mix of high quality earnings in a narrow niche and a stock price that still reflects broad sector fear. The risk is clear too, with policy settings on international students and private providers able to change quickly, so this is one for patient investors who are comfortable with regulatory and liquidity risk. EDU Holdings pairs A$54.28 million in revenue with A$9.32 million in net income, yet many investors still treat it like a broad sector trade. See how the analyst forecasts for EDU Holdings reframes that view and what the earnings mix might be hinting at next. Some stocks start to build momentum quietly, then break out while most investors are still caught looking backward. These ideas are under the radar for now, so consider them before they attract broader attention. Find resilient companies that aim to hold up when markets wobble by scanning the curated 13 resilient stocks with low risk scores before the crowd rushes into the same defensive corners. Spot potential breakout moves in infrastructure that could power the AI build out by working through the focused 56 AI infrastructure stocks while these stories are still developing. Ride early waves in robotics and automation before adoption stories start flying by checking the hand picked 38 robotics and automation stocks while it still feels early. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Have feedback on this article? 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Dividend Kings have earned their reputation by raising their payouts for at least 50 consecutive years, an accomplishment that requires navigating recessions, inflationary periods, rising interest rates, and numerous market cycles without breaking their streaks. Still, an exceptional dividend history doesn't automatically make a stock a buy at any given price. Earnings growth, valuation, and the direction of analyst estimates remain important considerations, particularly after quarterly results give Wall Street a fresh look at a business. Four Dividend Kings — Becton, Dickinson and Company BDX), Consolidated Edison ED), Emerson Electric EMR), and Parker-Hannifin PH) — reported earnings last week. Medical technology giant Becton, Dickinson and Company delivered better-than-expected results for its fiscal third quarter, with adjusted earnings of $3.23 per share topping estimates of $3.14 despite dipping from Q3 EPS of $3.68 a year ago following the separation of its Biosciences and Diagnostic Solutions operations. Revenue reached roughly $5 billion, down 9% from the prior-year period but topping expectations of $4.89 billion. That said, growth from its continuing businesses was broad-based. Medical Essentials revenue increased 4%, Connected Care rose 5%, BioPharma Systems advanced 6%, and BD Interventional climbed 6% on a reported basis. Cash generation was another bright spot, with year-to-date cash flow from continuing operations increasing by 33% to $2.1 billion and free cash flow increased over 44% to $1.7 billion. Management also tightened its fiscal 2026 adjusted EPS outlook to $12.62-$12.72, compared with its previous $12.52-$12.72 range, effectively raising the midpoint. The updated EPS range calls for 6-7% growth for the continuing business, although FY25 EPS came in at $14.40 last year before the separation of its Biosciences and Diagnostics operations. When accounting for the spin-off, full-year revenue growth is expected at low single digits from a continuing revenue base of $18.54 billion last year. The quarter wasn't flawless as gross and operating margins faced pressure while BD works through a significant portfolio transformation. Verdict: For investors, the appeal centers on a durable medical-technology franchise, improving cash generation and a long record of dividend growth. Yet a Zacks Rank #3 (Hold) suggests analysts' earnings revisions aren't currently strong enough to signal a more aggressive entry point, even with BDX shares having the cheapest forward P/E multiple on the list at 14X. Consolidated Edison provided the defensive flavor investors typically expect from a Dividend King while also delivering a sizable earnings beat. Second-quarter adjusted earnings came in at 83 cents per share, comfortably ahead of expectations of $0.74 and up from Q2 EPS of $0.67 a year earlier. Revenue increased 13% to $4.06 billion and easily topped Q2 estimates of $3.74 billion by 8%. The growth was supported by higher electric and gas rate bases, with Con Edison’s operating income surging 55% YoY to $552 million. Electric revenue rose 13% to $3.14 billion, gas revenue advanced 14% to $811 million, and steam revenue increased 11% to $118 million. Those gains helped offset higher purchased-power and fuel costs. Looking ahead, Con Edison reaffirmed its FY26 adjusted EPS guidance of $6.00-$6.20 (+5% growth). The utility provider also has an enormous investment program ahead, with nearly $38 billion in planned capital expenditures from 2026 through 2030. That spending should support rate-base growth over time, but utilities generally lack the explosive earnings potential found in more economically sensitive industrial businesses. Interest rates and valuation can also have an outsized influence on utility stocks because income-oriented investors frequently compare their yields with fixed-income alternatives. Verdict: ED remains attractive for investors prioritizing dividend reliability and defensive exposure, and its latest earnings beat reinforces the stability of Con Edison’s underlying business. However, the current Zacks Rank #3 (Hold) suggests the near-term earnings outlook is balanced rather than signaling a particularly compelling buying opportunity, even with ED shares trading at a very reasonable 17X foward earnings multiple. Among these four Dividend Kings, Emerson Electric produced one of the more impressive combinations of growth, margin expansion, and improving guidance. Reporting results for its fiscal third quarter, Emerson’s Q3 adjusted EPS increased over 12% to $1.71 and edged expectations of $1.68, while revenue climbed 7% YoY to $4.87 billion and topped estimates of $4.79 billion. Underlying sales advanced 6%, and underlying orders rose 7%, pointing to healthy demand across the automation specialist's portfolio. Software & Systems was particularly strong, posting an 11% sales increase, while Test & Measurement sales jumped 23%. Emerson also benefited from demand across power, aerospace and defense, liquefied natural gas and other longer-cycle markets. Backlog excluding its Aspen Tech asset manager software business increased 7% to $8.2 billion. Profitability added another positive element. Adjusted segment EBITA margin expanded 140 basis points to 28.5%, while Q3 operating cash flow jumped 34% and free cash flow rose 36%. Those results prompted management to raise its fiscal 2026 outlook. Net sales are now projected to grow approximately 5%, which would equate to around $19 billion, with underlying sales growth of around 3.5%. Full-year adjusted EPS is expected to be around $6.55 (9% growth), and Emerson anticipates generating approximately $3.6 billion in free cash flow. Roughly $2.2 billion is slated to be returned to shareholders through about $1 billion of repurchases and $1.2 billion of dividends. Verdict: Hold with a Bullish lean. While EMR currently lands a Zacks Rank #3 (Hold) as well, Emerson's operating trends look stronger, and it wouldn’t be surprising if a buy rating is on the way if analysts start to raise their earnings estimates in accordance with the company’s raised guidance. Rising orders, expanding margins, and increased guidance make EMR worth watching closely at a reasonable 25X forward P/E, particularly if upward earnings estimate revisions strengthen enough to support a higher Zacks Rank. As a global diversified manufacturer of motion and control technologies and systems, Parker-Hannifin arguably posted the strongest headline numbers of the four. PH’s fiscal fourth-quarter adjusted earnings surged 20% to $9.27 per share, easily topping EPS expectations of $8.29 by nearly 12%. Revenue increased roughly 10% to $5.75 billion, exceeding estimates of $5.6 billion, with organic sales growing 8%. Perhaps even more encouraging for future demand, was that orders soared 19% YoY. Strength came from both major operating businesses. Diversified Industrial sales increased 8%, while Aerospace Systems benefited from robust demand. For the full fiscal year, PH’s adjusted earnings advanced over 18% to $32.31 per share, and annual sales increased more than 8% to $21.5 billion. The company's profitability remains another major strength. Adjusted total segment operating income increased over 14%, and the corresponding margin expanded 110 basis points to 28%. Cash generation was also robust, with FY26 operating cash flow reaching $4.36 billion. It’s also worth noting that PH’s long-term debt fell to $6.77 billion from $7.49 billion a year earlier. For FY27, management expects both net sales and organic sales growth to be between 5.5%-8.5%, an adjusted segment operating margin of 27.5%-27.9%, and adjusted EPS of $34.25-$35.25 (+6% growth). Importantly, that guidance excludes the pending Filtration Group and CIRCOR Commercial and Defense Aerospace acquisitions. Verdict: Hold, with a bullish lean. PH's earnings beat, 19% order growth, and impressive margins make its fundamental story difficult to ignore. The primary question isn't the quality of the business but whether its current P/E valuation of 30X and earnings revisions provide enough upside to justify chasing shares immediately after their run, with PH stock spiking 8% this month. BDX, ED, EMR and PH stock have something very few publicly traded businesses can claim: dividend-growth records stretching across half a century or more. Their latest earnings reports also show that these mature businesses aren't relying solely on their dividend histories to attract investors. Becton Dickinson delivered broad-based revenue growth and stronger cash generation while lifting the midpoint of its earnings outlook. Consolidated Edison topped expectations and has a massive capital-investment program supporting its long-term rate base. Emerson Electric paired higher orders with margin expansion and raised guidance. Parker-Hannifin, meanwhile, produced double-digit earnings growth, a sharp increase in orders and another year of strong cash generation. The catch is that great businesses don't always equal great entry points for stocks. With all four stocks currently carrying a Zacks Rank #3 (Hold), the near-term earnings revision picture doesn't provide a clear enough catalyst to warrant an outright Buy rating and the plausibility of significant short-term upside. That doesn't make these Dividend Kings stocks to sell, either. Their durable businesses, shareholder-friendly capital allocation and decades-long dividend records make them compelling names to keep on investors' watchlists. For now, holding existing positions may be the most appropriate approach, while prospective buyers can watch for more favorable valuations or stronger upward earnings estimate revisions. Among the four, Emerson and Parker-Hannifin appear particularly intriguing following their strong operating results, and either could become more attractive should analyst revisions turn increasingly positive. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Emerson Electric Co. (EMR) : Free Stock Analysis Report Becton, Dickinson and Company (BDX) : Free Stock Analysis Report Parker-Hannifin Corporation (PH) : Free Stock Analysis Report Consolidated Edison Inc (ED) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 4:30 p.m. ET Director of Investor Relations - Doug Ashby President and Chief Executive Officer - Surendralal Karsanbhai Chief Financial Officer - Michael Baughman Chief Operating Officer - Ram Krishnan Operator: Good afternoon, and welcome to the Emerson Third Quarter and Full Year 2026 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to your host, Doug Ashby, Director of Investor Relations at Emerson. Please go ahead. Doug Ashby: Good afternoon, and thank you for joining Emerson's Third Quarter 2026 Earnings Conference Call. Today, I'm joined by Emerson's President and Chief Executive Officer, Lal Karsanbhai; Chief Financial Officer, Mike Baughman; and Chief Operating Officer, Ram Krishnan. As always, I encourage everyone to follow along with the slide presentation, which is available on our website. Please turn to Slide 2. This presentation may include forward-looking statements, which contain a degree of business risk and uncertainty. Please take time to read the safe harbor statement and note on the non-GAAP measures. I will now pass the call over to Emerson's President and CEO, Lal Karsanbhai, for his opening remarks. Surendralal Karsanbhai: Thank you, Doug. Good afternoon, everyone. I'd like to begin by thanking my Emerson colleagues around the world for delivering an outstanding quarter. We have created momentum in our business built on customer intimacy, investment in innovation and operational execution, all a testament of the strength of the Emerson management system. Please turn to Slide 3. I would like to recognize our Chief Technology Officer, Peter Zornio, who will retire on December 31, following an exceptional career at Emerson. Peter joined Emerson in 2006 and played an instrumental role in the development of our industry-leading control systems and software portfolio. He has been a key member of the executive leadership team in our automation business since 2017 and played a pivotal role driving innovation as CTO during our portfolio transformation. Thank you, Peter, for your contributions and friendship over the past 20 years, and please know, it has been an honor working with you. I'm also excited to announce Rudy Sengupta as our Senior Vice President and Chief Technology and AI Officer effective August 15. This appointment reinforces Emerson's strategy to lead in AI-enabled automation, advancing the full technology stack and helping customers achieve autonomous operations at scale. Rudy joined Emerson through the acquisition of NI and brings decades of experience in software-defined automation, spanning engineering, product and corporate strategy and operations. Currently serving as Vice President and General Manager of Test and Analytics Software, Rudy has advanced NI software differentiation, including the development of award-winning Nigel AI. He brings a deep understanding of technology and AI, and his leadership of our enterprise AI vision and long-term technology road map will be key in accelerating innovation across Emerson, and positioning the company for continued growth. Please turn to Slide 4. End market demand is robust, supported by secular trends in our growth verticals and a meaningful investment in automation. Underlying orders grew 7% in the third quarter, with broad-based growth across all business groups, led by Software & Systems, which was up 10%. Demand was strongest in North America and Asia, and I'll discuss demand trends in more detail on the next slide. Emerson delivered an outstanding third quarter with sales, margin expansion, earnings and cash, all exceeding expectations. Underlying sales grew 6%, led by sustained momentum in Test & Measurement, and in our Ovation business, both up 23%. Overall, our growth verticals were up 27%, led by semiconductor and power, which both saw significant growth. Adjusted segment EBITDA margin expanded 140 basis points to 28.5% and adjusted earnings per share grew 13% to $1.71, above the top of our guidance. Annual contract value of our software grew 9% year-over-year and ended the quarter at $1.68 billion. While the situation in the Middle East remains dynamic, the resilient efforts by our teams and customers drove a better-than-expected performance in the quarter relative to our reduced expectations. The demand environment in the Middle East is constructive with repair work underway. Our field service engineers are now operating at pre-conflict levels, but customer operational capacity remains approximately 75%. Large projects are moving forward, and we are seeing new opportunities emerge across the energy chain to support energy security and resiliency in the region. Emerson's customer relationships and strong local presence position us well to capture the near-term investment priorities, pipelines, and alternative export routes to reduce dependence on the Strait of Hormuz. The long-term capital outlook is robust, and we remain confident in the growth potential of the Middle East. Lastly, the year is shaping up largely as expected with a meaningful second half step-up in organic growth and a slightly better Middle East than what we forecast in May. We are raising our full year guidance, reflecting strong third quarter results and healthy demand trends. We are raising sales growth expectations to 5% with underlying growth of 3.5%. Adjusted segment EBITDA margin is still expected to be approximately 28%, and we are raising our adjusted EPS guide to $6.55. Through the third quarter, Emerson completed $898 million of share repurchases, and we remain committed to returning approximately $2.2 billion of capital to shareholders this fiscal year. Please turn to Slide 5. Underlying orders grew 7% in the third quarter, with broad-based demand across the portfolio as customers are investing in automation to enhance productivity, reliability and resilience in their operations. North America and Asia drove the growth, led by the continued strength in the U.S., India, Japan and Southeast Asia. Demand in Europe and China remained soft, but showed signs of improvement in the quarter. Test & Measurement orders growth of 19% exceeded expectations, with semiconductor up 70% and double-digit growth in aerospace and defense and the portfolio business. We are seeing a continuation of the unprecedented investment in power generation with orders in our Ovation business up 31%. Electrification is also driving exceptional activity in grid modernization and ACV in AspenTech's digital grid management suite was up 28%. Our project funnel grew $1.2 billion to $12.4 billion, up 8% year-over-year. Secular tailwinds are supportive of sustained capital activity in our growth verticals, which were up $1 billion sequentially. Power was up $450 million from the second quarter and now accounts for $3 billion of the funnel. The power generation build-out is accelerating with substantial demand for both utility and behind-the-meter power. The need for more stringent cybersecurity in critical infrastructure is also leading customers to accelerate retrofit and upgrade programs. The LNG funnel grew $350 million to $2.2 billion, and we see resilient momentum across the Americas and the Middle East, reinforcing the demand trajectory we outlined at our Investor Day last November. In the third quarter, Emerson won approximately $400 million from the funnel. 80% came from our growth verticals. And I want to highlight a few key wins. First, Emerson was selected to retrofit control systems for a 2.1 gigawatt power plant for CFE, Mexico's largest power producer and national utility. Emerson will deploy its industry-leading Ovation control system, which was selected for our proven ability to execute complex retrofits within accelerated time lines. This modernization will enhance plant reliability and support CFE in meeting Mexico's growing power generation demand. Next, Emerson was chosen by China Nuclear Power Engineering Company, the design firm for the new Hualong-1 pressurized water reactor in Guangdong province, which will add 2.4 gigawatts to China's nuclear installed base. Emerson will supply pressurizer pilot-operated safety valves, one of the most critical valve applications to ensure overpressure protection of the primary circuit. We were selected based upon our strong application expertise, nuclear qualifications and our local presence and support. Lastly, Emerson will provide NI Semiconductor Test Systems for a leading semiconductor manufacturer based in Taiwan. Emerson's solution improves test accuracy and consistency for critical components, ensuring a faster product road map to help the customer capture opportunities in the AI market. With that, I will now turn the call over to Mike Baughman to discuss our financial results and guidance in more detail. Michael Baughman: Thanks, Lal. Please turn to Slide 6 for a more in-depth look at our financial results. Q3 underlying sales growth was 6%. Each of our business groups exceeded expectations, led by Software & Systems up 11%. And I will provide more details on geographic and group performance on the next 2 slides. Price contributed 3 points to growth and MRO was 65% of sales. Backlog ended the quarter at $8.2 billion, up 7% year-over-year, and our book-to-bill was 1.0. Adjusted segment EBITDA margins of 28.5% were up by 140 basis points. Margin expansion exceeded expectations due to better volume than expected and favorable segment mix. Price cost and cost reductions more than offset inflation. Adjusted earnings per share was $1.71, up 13% year-over-year. Operations contributed the full $0.19 increase reflecting outstanding performance. Q3 free cash flow of $1.3 billion was up 36% and at a margin of 27.1%. Cash exceeded expectations due to good operational performance, along with the impact of tariff refunds and the timing of tax payments, which shifted from Q3 to Q4. Year-to-date, free cash flow was up 9% with a margin of 19%. Please turn to Slide 7 for details on Q3 underlying sales by region. The Americas were up 8% with the U.S. up 10%. We saw a very healthy pace of business in the U.S. with Software & Systems up 14% and Intelligent Devices up 9%. Asia, Middle East and Africa was also up 8%, led by the Middle East and Africa, up 11%. As Lal mentioned, a great performance by our teams in the Middle East resulted in a revenue impact that was better than our revised expectations coming into the quarter. Overall, the impact in Q3 was about a $25 million headwind compared to our February guidance, and we expect the Q4 impact to be similar as supply chains remain complex. China improved to down 3% year-over-year, which was in line with our model, and Europe remained soft as expected and declined 1%. Globally, our growth verticals continue to be meaningful drivers of performance, and we were up 27% in the quarter. Growth was very strong in semiconductor, which was up 53% and Power, which was up 37%. Please turn to Slide 8 for details on the third quarter underlying sales and margin performance for our 3 business groups. Software & Systems grew 11% underlying with robust growth at Test & Measurement, up 23% and Control Systems & Software, which was up 7%. We saw significant Software & Systems growth in power, semiconductor and aerospace and defense. Software & Systems margin of 31.8% decreased 30 basis points year-over-year compared to a very strong performance last year. The current year margin included a drag of 1.5 points due primarily to the software contract renewal dynamic and a higher mix of lower-margin projects. Intelligent Devices underlying sales were up 5%, better than expected due to our performance in the Middle East and the timing of project shipments and sensors. We saw consistent strength in power and LNG, as well as solid growth in midstream gas and chemical. Intelligent Devices margins of 27.9% increased 240 basis points year-over-year from volume leverage, price cost and cost reductions. Safety & Productivity was up 2% underlying, driven by electrical products and industrial activity in North America. European and automotive markets remain soft. Safety & Productivity's margin of 21.2% was up 80 basis points year-over-year, driven by disciplined price cost and cost reductions, offset by lower volume and inflation. Please turn to Slide 9 for our 2026 underlying sales guidance by business group. We expect Software & Systems to be up approximately 10% in Q4, with both Test & Measurement and Control Systems & Software expected to grow 10%. We are increasing our full year expectations for Software & Systems to up 6%, based on the strength of our growth verticals in this business and strength in the U.S. We are raising full year growth guidance for Test & Measurement, now 14%, and Control Systems & Software, now 3.5%, including approximately 3 points of headwind from software renewals. ACV continues to grow on plan, and we still expect ACV growth of 10%-plus in 2026. Intelligent Devices is projected to grow 3% in Q4 and 2% for the full year. Growth in Intelligent Devices is supported by stable MRO with strength in the U.S. and growth verticals. We are modeling an approximately $100 million full year 2026 impact from the conflict in the Middle East as the Strait of Hormuz remains effectively closed. Safety & Productivity is expected to grow 1% in Q4 and 2% for the full year. The North America market continues to recover, and we are seeing sustained strength in electric utilities. However, automotive and European markets remain weak. Overall, Emerson expects to grow approximately 5% in Q4 and 3.5% for the full year. Please turn to Slide 10 for details on our full year and Q4 2026 guidance. We are raising full year guidance for sales, EPS and cash flow. For the full year, we expect 5% GAAP sales growth and 3.5% underlying sales growth. We still expect adjusted segment EBITDA margin of 28%. We are guiding 2026 adjusted EPS of approximately $6.55 and free cash flow of approximately $3.6 billion. There are no changes to our planned return of approximately $2.2 billion to shareholders through $1.2 billion in dividends and $1 billion of share repurchase. Moving to the fourth quarter. Sales growth is expected to be approximately 5% with minimal impact from FX. We expect adjusted segment EBITDA margin of 28.5% and adjusted EPS of approximately $1.85. Overall, the full year is unfolding largely as we expected, and underlying orders growth of 7% for the first 9 months reflects stable MRO activity and the secular tailwinds driving long-cycle capital projects. A stronger-than-expected growth in the U.S. has offset a slightly weaker China, and we have minimized the effects of the Middle East conflict to approximately 0.5 point of revenue. Our second half underlying sales growth is accelerating as we lap the software contract renewal dynamic and execute project shipments from our backlog, which continues to grow year-over-year. With that, I would like to turn the call back to Alexandra for Q&A. Operator: [Operator Instructions] Your first question comes from the line of Deane Dray with RBC Capital Markets. Deane Dray: I think I got the numbers right there, as Mike was zipping through them, but it really sounded like semiconductor and power at 53% and 37% were really standouts here. Can you unpack the growth opportunity? How much do you think was the underlying market? And are there any share gains going on as well, new product contributions, that type of color, please? Ram Krishnan: Deane, this is Ram here. Certainly, the underlying market in both semis and power, as you know, is very, very strong, but I will contend that certainly in power, both on the generation side with Ovation, with fleet modernizations but also behind-the-meter opportunities driven by data centers and new capacity adds in North America there is significant penetration gains or participation gains we're driving. And similarly, with our DGM business, our digital grid management business on the software side with AspenTech. So a combination of a strong market but participation gains. And I would venture to say, maybe to a lesser extent, in Test & Measurement, but a very, very strong market in RF and mixed-signal and participation gains with new products in both spaces. Deane Dray: Great. And then just as a follow-up, and Lal, your comments about increasing focus on cybersecurity and critical infrastructure. I mean that was in the news this week with all of the cyber hacks across the water sector, a number of facilities, especially in Michigan. Now I know that's not a big focus for Emerson, but you do have a presence there. And this idea here that cybersecurity is a focus, how do you think this plays out? Is this a place for future investment for Emerson? What kind of opportunity do you see? Surendralal Karsanbhai: No. Thanks, Deane. So just first of all, yes, we're very aware of the facilities that were impacted. None of those facilities had an Emerson or an Ovation control system in them. So that's first and foremost. Secondly, cybersecurity spend has been a significant driver of upgrades in control systems, both in power generation and in water systems. And we continue to see that, Deane, as a significant driver on a forward basis, particularly with these attacks and other vulnerabilities that are in light. So feel good about the offering that we have and the various standards that we bring to market, but a very important part of the business for sure. Operator: Your next question comes from the line of Jeff Sprague with Vertical Research. Jeffrey Sprague: The funnel movement is quite intriguing. Obviously, you gave some anecdotal color, the growth in LNG and power in the funnel. Just also wondering, is this even increasingly long-dated sort of project activity? In other words, kind of conversion of funnel to proposal to order. Anything changing there of note? Surendralal Karsanbhai: No, not really. Look, we continue to see about the same level of awards in the quarter. If you recall, we won approximately $400 million. That's very similar to the amount that we reported in the second quarter as well. So the timing of financing and awards continues to move relatively consistently over time. What we're seeing is just a very significant increase in the number of projects and the value of projects, particularly -- well, I'd suggest across all the growth verticals, but certainly in liquefied natural gas, which was up 19% and in power. And now we have almost 1,000 projects, individual projects in the funnel across those 2 markets alone. So continue to see good conversion there. And again, as you note, Jeff, we don't look at this. This is not a 10-year funnel. This is a relatively 3- to 4-year view and we do work it very, very actively in the quarter. Jeffrey Sprague: Great. And then unrelated, maybe pivoting to Mike. Just a little bit of update on where we're at on price cost at this point, 3% price look pretty healthy in the quarter. Are you sort of "green on price cost"? And just any tariff update there, refunds you may have gotten in the quarter or expectations in the current quarter for anything on the refund front? Michael Baughman: Yes. Price cost certainly remains green for us. And if we look to the full year, we were tracking to about 2.5% price for the year. That's still the case, might catch a rounding and be at 3%, but we continue to see good price and managing the inflation, which we certainly have seen. I think as we head into the fourth quarter here, we will be lapsing all of the tariff pricing. So we did have a little bit of tariff pricing in Q3, but the majority was just our annual and spot prices that we do through the year. So that -- yes, so price has been strong and we're green on price cost. Relative to tariffs, we got $82 million in the quarter. We continue to file some claims. Just a reminder that we are accounting for those on a cash basis as we get them and we report them in cost of sales. So the margin certainly on a GAAP basis improved in the quarter due to that $82 million that we saw. So yes, and that was certainly part of the cash flow performance in the quarter as well, the receipt of the $82 million of refunds. Jeffrey Sprague: And even with that $82 million, do you have net cost headwinds related to other tariffs or other changes? Or we should if you had some drop through the margins on that. Ram Krishnan: Well, that was taken out of our adjusted. So it's been removed. And the tariff landscape has obviously been changing, some tariffs have come off, some tariffs have come on. When we look at the year, we certainly got a net benefit that was largely eaten up by other inflation that was above and beyond the model that we had when we started the year. So a little bit of a tailwind to the bottom line, which was what we talked about and expected last quarter. So pretty much tracking the way we expected. Operator: Your next question comes from the line of Scott Davis with Melius Research. Scott Davis: The Ovation orders, I think you said, up 31%. I think you said, Mike, up 31%. But what kind of lead times are you looking at now? Are you taking orders well into, I would imagine, well into maybe even the back half of '27 at this point? Surendralal Karsanbhai: That's exactly right, Scott. We're sitting in the fourth quarter of '27, reaching into '28 at this point. Scott Davis: [indiscernible] Okay. Fantastic. I'd call that high visibility, I suppose, anyways. And I think Mike said something positive about chemicals, and I haven't heard a positive thing you said about chemicals in a lot of years. So have we turned a corner there? Or it's just a little bit of a blip and chemicals could actually be somewhat helpful to you guys in the next couple of years? Michael Baughman: Yes. The chemical comment was specific to Intelligent Devices. And it was a bit of a change in the quarter, and it was up, and that was largely in the Final Control business. We still have slow chemical markets in China and Europe -- in Europe. But the United States and Middle East is doing very well. So it was up in the quarter. We did want to make that comment, and it was particularly up in the Final Control business. Operator: Your next question comes from the line of Andrew Obin with Bank of America. Andrew Obin: Yes. It's remarkable that turns out companies can exclude IEEPA refunds from their numbers. Sorry, sorry about this quip. Anyway, but thank you for taking a more conservative approach. Look, just a question on Middle East. I think you said repair construction is underway, $25 million headwind in third quarter, fourth quarter to be similar. So the question is, so Middle East rebuild opportunity is larger today and starting, but still in that drag in the fourth quarter. Does it flip to a tailwind in the first quarter of '27? Surendralal Karsanbhai: It's a good question. It really -- in the status quo, in terms of an on-off situation of the Strait of Hormuz challenges with getting product out of the Gulf, I think that's going to continue to be touch and go. Maybe conditions improve, and that gets a little bit better for us as we go through the second half of 2027. But right now, as we're planning, I would expect to be realistic that the -- certainly the fourth quarter and perhaps into the first quarter of this -- of our fiscal year, the conditions remain relatively the same. Andrew Obin: And then maybe can we just talk a little bit about software. I think you said ACV was up 9%. Underlying sales were 7%. So can we just talk about sort of the pace of contract renewals year-over-year? And just generally, I think software, a big topic of conversation last quarter. This quarter, I guess, we're back to inflation. But just what are you seeing operationally given all the sort of brouhaha about sort of new solutions coming in? Just give us some color as to what you're seeing in the numbers. Surendralal Karsanbhai: Yes. No, we -- underlying sales just a correction there, 6% on underlying sales, underlying orders were the 7% number that you referenced. But yes, you are right, ACV growth of 9%. Ram, if you want to comment on the business as a whole. Ram Krishnan: Yes. So ACV 9%, and I think we feel pretty good about exiting the year at 10-plus percent on ACV. So I think from a software perspective, the dynamics of -- if your specific question was the renewal dynamic, that certainly reverses in the fourth quarter, and you'll see that reflected in the numbers in the fourth quarter. And then all segments of our software business, whether it is the Aspen core business, certainly, DGM, when we threw out the number there for DGM was 28% growth in DGM. So that continues to accelerate. The ACV performance there is very, very strong and then certainly on the Test & Measurement side as well. So our software business is executing according to plan. I think exiting the year at 10% gives us confidence about a very, very solid 2027. Operator: Your next question comes from the line of Alex Virgo with Evercore ISI. Alexander Virgo: I wondered if you could just flesh out a little bit of that power demand for us. Is that still mostly brownfield now? Or are we actually starting to see some of the more greenfield projects with your comment there on Q4 '27 and moving into '28. I just would like a little bit more detail on that. And then as a follow-up, really strong numbers on Test & Measurement. So really great to see that. One of your peers talked about a -- concerns of a slowing market as you roll into next year on tougher comps and the length of the cycle. So without pushing you for guidance for '27, I wondered if you could give us a sense of the visibility that you have in that business and what we should be thinking about as we do start to think about '27? Ram Krishnan: Great. I'll take the one on power. Power to date, which has been extremely strong, has been mostly fleet modernizations. But we are starting to see, particularly in the quarter we concluded, but going into Q4, and into the early part of next year, some of the newer capacity coming online, certainly gas-fired in North America will be a big part about the tailwind. Certainly, the data center opportunity, you can classify that as behind-the-meter, and that's greenfield. And then certainly, on the DGM side, which we also capture in power and nuclear power, a lot more of that is greenfield. So yes, you're going to start seeing more of that in the numbers. But to date, that the momentum has been on fleet modernizations or brownfield, as you referenced. Surendralal Karsanbhai: I'll follow up on the semiconductor question. Look, we're not going to obviously guide into '27. You can certainly read into the tremendous order momentum that we have in the semiconductor business within T&M today. But I will highlight that there is a differentiation in growth in the applications from the laboratory, where I think the period that you're referencing largely plays to the validation and production side where we largely play. And that has a different dynamic on growth and in the cycle as well. And so at this point in time, I continue to be relatively robust on semiconductors through 2027. Operator: Your next question comes from the line of Andy Kaplowitz with Citigroup. Andrew Kaplowitz: Well, maybe just your thoughts on MRO in general. I think you've highlighted it today as stable. But I think generally, it's seen, it's been pretty strong across you and your peers. So what are you seeing there is that, I assume, led by North America, but obviously, we're running facilities pretty hard. So what are you seeing going forward here? Surendralal Karsanbhai: Yes. Really, no material change to the MRO rates anywhere that we've observed around that 2/3 of the business level. That seems to be pretty consistent. There continues to be spend on replacement. We have seen, and I think to your point, we have seen some delays in shutdown turnaround activity because exactly, facilities are being run relatively hard right now. So that -- we'll see how the fall season ultimately shapes up there, which will -- would may have an impact to MRO activity, but day-to-day MRO continues to be very strong for us across the every -- just about every region and every business. Andrew Kaplowitz: And maybe related to that, Lal, like just growth by region, obviously, China has been kind of slowing Emerson down a bit, but maybe a little bit better here. And I think you mentioned Europe a little bit better. We've had mixed reads this quarter out of Europe. So sort of what are you seeing outside of North America? And does it give you a little more confidence in improvement sort of outside of North America and outside of the Middle East? Surendralal Karsanbhai: Yes. No, look, again, obviously, Andy, we've spoken how bullish we continue to be about the U.S.A. and the investments that are being made in the U.S.A., and I think that's got a significant amount of legs to it, and we were up 10% in sales in the U.S. in the quarter. I don't expect that to subside. Recovery in Europe. Look, Europe was down 1 point in sales in the quarter. But again, a little better than expected. Orders were positive in Europe. So that's a good sign as we go through the last half of this -- last part of this year and into the first quarter of next. And then China, slightly better, still negative, mid-single-digit negative, but we believe improving certainly sequentially and as we go into next year. So that's kind of how that environment looks like. And then, of course, other Asia was very, very strong, and that's powered by Japan and India and Southeast Asia. Go ahead, Mike. Michael Baughman: No that's it. It's great. Operator: Your next question comes from the line of Andrew Buscaglia with BNP Paribas. Andrew Buscaglia: If you guys could expand on the China comment. First off, -- was it -- did it stabilize in the quarter? Is it as expected? And then within Intelligent Devices, I wonder, can that growth rate get back to kind of historical peak levels without China really picking up? Or do you think there's enough growth in North America and elsewhere to more than offset it and get back to like types of growth we've seen in the past in the double digits in that segment? Ram Krishnan: So on Intelligent Devices, the answer is, absolutely. I think as -- if you looked at orders performance as a leading indicator, I think you'll start seeing that. Now a majority of the sales impact in the Middle East is in our Intelligent [ Devices ] business. So you'll see that obviously suppress the growth rate so far, but that will unlock in Q4 and into next year. So yes, no concerns about the return to growth of Intelligent Devices. Now our guide there is 3% to 6%. I mean we've had years of double digits, but Intelligent Devices are in our long-range framework, our Systems & Software business is a 6% to 9% growth business, which includes Control Systems and T&M and Intelligent Devices in 3% to 6%. So we feel very good in that framework. And then your question on China. China, I think minus 3% is better than what we had seen in the first half. So it is improving, and it was sequential growth in Q3 over Q2. So again, we expect China to continue to improve into low-single-digit type growth levels as we planned for 2027. Andrew Buscaglia: Okay. Fair enough. And my other question is on software control. I think someone tried to get at this, but I'll ask it in a different way. But there's been a lot of noise in that segment in the last couple of years. And can you just help us kind of rebase what you anticipate to be more of like a through-cycle growth rate in Software & Systems? And then how do we think about that growth more in an upcycle now that we have this Test & Measurement business that you didn't have in the past cycles to anchor us to it? I guess I'm trying to get at, what's the 2027 number look like if we are indeed in a strong up cycle? Ram Krishnan: Obviously, it's a little early to comment yet on 2027. But if your question is, what is our thinking as we built this portfolio around long-range growth for soft -- the control systems part of software and control as well as Test & Measurement, they're both in the 6% to 9% type framework. That's kind of how we are thinking about it through this cycle? Andrew Buscaglia: Through the cycle. So presumably more than that, though, and if orders are starting to pick up and accelerate from here. Michael Baughman: Was there a question, Andrew? Sorry. Andrew Buscaglia: Yes, I guess I'm just saying if orders are accelerating here, should we anticipate more of the high end of that or better in an up cycle? Michael Baughman: Well, certainly, T&M this year is in that up cycle and is certainly outside of the range. So yes, when things are on an up cycle, they can get outside above that range? Ram Krishnan: Yes. T&M is 14% this year or so, yes. Operator: Your last question comes from the line of Ken Newman with KeyBanc Capital Markets. Kenneth Newman: Maybe just to ask the greenfield question in a different way that was asked earlier. Ram, I appreciate the comments on the power and the semi markets that you made earlier. Is there a way to help frame how much of the total project funnel today is for new greenfield versus brownfield? And I'm just curious if you're seeing any kind of material differential in pricing for those new orders versus the 3% you [ recorded ] this past quarter? Ram Krishnan: Yes. So majority of how we define our project funnel, the bulk of it is greenfield. And the brownfield modernization has led separately, and it's a different cut we take to those type of funnels. I mean the pricing, obviously, we get better pricing on the modernizations than we do typically on greenfield, and we get better pricing on MRO than brownfield. So that's somewhat consistent with how we've always kind of positioned it. But most of the $12.4 billion, I would say, venture to say, we look at that as greenfield. Kenneth Newman: Got it. That's helpful. And then look, I know the crystal ball on the Middle East is kind of clear as mud in this environment. But just given what you're hearing from your customers, do you -- do they have any comments or thoughts about what kind of stability or a certain amount of stability in terms of timing that they need to see before they can start to normalize orders back to pre-conflict conditions? Or is that just too hard of an exercise to do at this point? Surendralal Karsanbhai: It is. It's a challenge. We're seeing new projects coming online, particularly related to pipeline, storage, transportation, built on the resiliency of their networks, obviously trying to avoid the Strait of Hormuz and now avoiding the Red Sea as well. So there is a challenge there. There are certain products that are easily transportable via pipeline, but there's some that are impossible like LNG. LNG is -- can be transported over a couple of miles. But you're just not going to build a 400-mile pipeline to take LNG. So there is -- are a lot of challenges that customers are wrestling with right now. And I think they're going to need certainty in some kind of an agreement between the United States and Iran before things calm down and there's some trust back in the system. Kenneth Newman: Whenever that situation does come to fruition, is there a way to think about how quickly you would expect to see those orders come through? Surendralal Karsanbhai: I think relatively quickly, to be very honest. We're seeing really good activity in quotation and preparedness for some large petrochemical expansions, LNG field expansions in Qatar, so we know that's coming. And so we expect that to be released relatively quickly. Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Emerson Electric, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Emerson Electric wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* Now, it’s worth noting Stock Advisor’s total average return is 965% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 11, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Emerson Electric. The Motley Fool has a disclosure policy. Emerson Electric (EMR) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Eaton Corporation ETN posted solid second-quarter 2026 results, with both the top and bottom lines improving year over year as well as beating the Zacks Consensus Estimate. The quarter benefited from double-digit organic growth in both electrical businesses and strong acquisition contributions. This diversified power management company and a global technology leader in electrical components and systems is gaining from rising electrification and data center demand. Shares of ETN have gained 15.6% since it posted earnings on July 31, outperforming the industry’s 11.2% growth. Shares of industrial tech stocks like Emerson Electric Co. EMR and Powell Industries POWL have gained 9.3% and lost 0.5%, respectively, in the same time frame. Image Source: Zacks Investment Research Adjusted earnings of $3.15 per share were up 6.8% year over year and beat the Zacks Consensus Estimate of $3.08 by 2.3%. Revenues of $8.53 billion increased 21.4% and surpassed the consensus mark of $8.01 billion by 6.57%.Sales growth included a 14% increase in organic revenues and a 7% contribution from acquisitions. Management said data centers remained a major growth engine, while demand was also robust across other served markets.Electrical-sector backlog rose 43% year over year, while Aerospace backlog advanced 28%, underscoring sustained demand across key end markets. Margin was 23.1%, 10 basis points above the high end of management's guidance but 80 basis points below the prior-year quarter. Acquisition-related effects and higher amortization weighed on reported profitability.Operating cash flow was $1.13 billion, up 23% year over year. After $253 million of capital expenditures, free cash flow totaled $874 million, an increase of 22%.As of June 30, 2026, cash was $483 million compared with $622 million at year-end 2025. Long-term debt was $18.51 billion, up from $8.76 billion, reflecting the funding impact of recent acquisitions. For 2026, Eaton now expects organic growth of 11-13% (up from prior range of 9-11%), segment margin of 24.1-24.5% and adjusted earnings of $13.40-$13.60 per share (up from prior range of $13.05-$13.50). The midpoint of the earnings range implies 12% growth from 2025. For the third quarter, management projects organic growth of 13.5-15.5%, segment margin of 24.6-25% and adjusted earnings of $3.46-$3.56 per share. The outlook reflects expectations for continued demand momentum and stronger profitability. Eaton is well positioned to capitalize on long-term growth trends, including grid modernization, data center expansion, industrial automation, the global energy transition and the aerospace market recovery. Its growing backlog highlights strong customer demand and the company’s ability to provide reliable, mission-critical power management solutions.Innovation and sustainability remain central to Eaton’s strategy. The company plans to invest approximately $3 billion in research and development over the next decade to create advanced, sustainable technologies, strengthen its product portfolio and address evolving customer needs.Strategic acquisitions are also supporting growth by expanding Eaton’s presence in attractive, high-margin markets. Acquisitions such as Fibrebond, Resilient Power, Ultra PCS and Boyd are contributing stronger growth and accretive margins to their respective segments.The rapid development of AI-powered data centers represents a particularly significant opportunity because these facilities require greater power capacity and improved energy efficiency. Eaton continues to strengthen its position across the electrical power value chain while benefiting from robust demand in data centers, utilities, commercial aerospace and defense. Its diversified exposure across industrial, utility, commercial, residential and aerospace markets also reduces reliance on any single industry.Eaton remains focused on portfolio optimization, productivity improvements and disciplined execution to enhance operational efficiency and expand margins. The planned separation of its Mobility business will enable the company to direct capital toward higher-growth, higher-return opportunities. Meanwhile, Eaton is investing more than $1 billion in capacity expansion and launching roughly two dozen projects across Electrical Americas, supporting stronger daily revenue momentum as the new facilities ramp up. The Zacks Consensus Estimate for 2026 and 2027 revenues indicates a 16.8% and 10.6% year-over-year increase, respectively. The same for 2026 and 2027 earnings implies a 11.3% and a 17.7% year-over-year increase, respectively.  The expected long-term earnings growth rate is pegged at 11.7%. The Zacks Consensus Estimate for ETN’s 2026 and 2027 earnings per share has moved 0.6% and 0.4% north, respectively, in the last seven days. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Emerson’s 2026 and 2027 earnings per share has witnessed no movement in the last seven days. The same holds true for Powell. Eaton’s shares are trading at a premium compared with its industry. The company’s forward 12-month price-to-earnings of 30.26X is lower than its industry’s 35.28X but higher than the median of 23.86X over the last five years. Image Source: Zacks Investment Research Eaton shares are more expensive than Emerson Electric but cheaper than Powell. Eaton continues to deliver solid performance across its core businesses, supported by strong demand from expanding data center infrastructure. Continued research and development investments are fostering innovation, enhancing its product portfolio and addressing changing customer requirements. Strategic acquisitions are further strengthening Eaton’s technological capabilities and presence in high-growth markets. Favorable earnings estimate revisions, healthy investment returns and a growing backlog support its long-term prospects. However, the stock’s premium valuation may limit near-term upside. Therefore, a wait-and-see approach appears appropriate for this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Eaton Corporation, PLC (ETN) : Free Stock Analysis Report Emerson Electric Co. (EMR) : Free Stock Analysis Report Powell Industries, Inc. (POWL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Underlying Sales Growth: 6% in Q3, led by Test & Measurement and Ovation business, both up 23%. Adjusted Segment EBITDA Margin: Expanded 140 basis points to 28.5%. Adjusted Earnings Per Share: Grew 13% to $1.71, above the top of guidance. Underlying Orders Growth: 7% in Q3, with broad-based growth across all business groups. Software Annual Contract Value (ACV): Grew 9% year-over-year to $1.68 billion. Free Cash Flow: $1.3 billion in Q3, up 36% with a margin of 27.1%. Software and Systems Sales: Up 11% underlying, with margin of 31.8% (down 30 basis points year-over-year). Intelligent Devices Sales: Up 5% underlying, with margin of 27.9% (up 240 basis points year-over-year). Safety and Productivity Sales: Up 2% underlying, with margin of 21.2% (up 80 basis points year-over-year). Full Year Adjusted EPS Guidance: Raised to approximately $6.55. Full Year Free Cash Flow Guidance: Approximately $3.6 billion. Warning! GuruFocus has detected 8 Warning Sign with EMR. Is EMR fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Emerson Electric Co (NYSE:EMR) delivered an outstanding third quarter with underlying sales growth of 6%, exceeding expectations, and adjusted EPS of $1.71, up 13% year-over-year. Underlying orders grew 7% in Q3, with broad-based growth across all business groups, led by software and systems up 10%, indicating strong demand momentum. Growth verticals surged 27% in the quarter, with semiconductor up 53% and power up 37%, driven by secular tailwinds and participation gains. Adjusted segment EBITDA margin expanded 140 basis points to 28.5%, reflecting strong volume leverage, favorable mix, and disciplined price cost management. The project funnel grew to $12.4 billion, up 8% year-over-year, with significant increases in power and LNG, providing strong visibility into future growth. Free cash flow was robust at $1.3 billion in Q3, up 36% year-over-year, with a margin of 27.1%, exceeding expectations. The company raised its full-year guidance for sales growth to 5% and adjusted EPS to $6.55, reflecting confidence in continued strong performance. Software ACV grew 9% to $1.68 billion, with expectations to exit the year at 10%+ growth, supported by strong performance in AspenTech and digital grid management. The Middle East performance was better than expected, with field service engineers back to pre-conflict levels and new opportunities emerging for energy security and resiliency. Test and Measurement orders grew 19%, with semiconductor up 70%, and the company sees robust demand through 2027, particularly in production and validation applications. The Middle East conflict continues to impact results, with an approximately $25 million revenue headwind in Q3 and a similar expected impact in Q4, as the Strait of Hormuz remains effectively closed. China remains soft, with sales down 3% year-over-year, though improving sequentially, and the company expects only low-single-digit growth in 2027. Europe is weak, with sales down 1% in the quarter, and while orders turned positive, the recovery is expected to be gradual. Software and Systems margins decreased 30 basis points year-over-year, with a 1.5-point drag from software contract renewal dynamics and a higher mix of lower-margin projects. The company faces ongoing supply chain complexities in the Middle East, limiting customer operational capacity to approximately 75% and constraining revenue recovery. Safety and Productivity growth remains muted at 2%, with softness in European and automotive markets, and the company expects only 1% growth in Q4. The full-year impact from the Middle East conflict is modeled at approximately $100 million, representing a 0.5-point headwind to revenue growth. Intelligent Devices growth is suppressed by the Middle East impact, with full-year growth expected at only 2%, though orders suggest a recovery ahead. The company faces uncertainty in the Middle East, with customers needing a stable agreement between the U.S. and Iran before normalizing orders, which could delay recovery. Price cost is green, but the company received $82 million in tariff refunds in Q3, which were largely offset by other inflation, indicating ongoing cost pressures. Q: Can you unpack the growth opportunity in semiconductor and power, which were standout performers at 53% and 37% growth? How much was the underlying market versus share gains or new product contributions? A: Ram Krishnan (COO): The underlying market in both semis and power is very strong, but we are also driving significant participation gains. In power, this includes Ovation fleet modernizations and behind-the-meter opportunities from data centers. In software, our Digital Grid Management (DGM) business with AspenTech is a key driver. In Test & Measurement, we see a very strong market in RF and mixed signal, complemented by participation gains from new products. Q: The project funnel grew to $12.4 billion. Is this activity increasingly long-dated, and is there any change in the conversion of funnel to orders? A: Lal Karsanbhai (CEO): We continue to see a consistent level of awards, with approximately $400 million won in the quarter, similar to Q2. The significant change is the increase in the number and value of projects, particularly in LNG (up 19%) and power. We now have almost 1,000 individual projects in the funnel across those two markets alone. This is a 3- to 4-year view, and we are actively working on conversion. Q: Where are we on price cost, and can you provide an update on tariff refunds? A: Mike Baughman (CFO): Price cost remains green. We are tracking to about 2.5% price for the year, potentially reaching 3%. We received $82 million in tariff refunds in Q3, which we account for on a cash basis in cost of sales. This contributed to the improved GAAP margin and cash flow. The net benefit from tariffs was largely offset by other inflation, so we are tracking as expected. Q: With Ovation orders up 31%, what are the lead times now? Are you taking orders into the back half of 2027? A: Lal Karsanbhai (CEO): Yes, that is exactly right. We are currently sitting in the fourth quarter of 2027, reaching into 2028 for deliveries, which provides high visibility. Q: You mentioned positive comments on chemicals. Have we turned a corner there? A: Mike Baughman (CFO): The positive chemical comment was specific to the Intelligent Devices business, particularly in Final Control. While chemical markets in China and Europe remain slow, the United States and Middle East are doing very well, leading to growth in the quarter. Q: With the Middle East repair work underway, does the $25 million headwind flip to a tailwind in the first quarter of 2027? A: Lal Karsanbhai (CEO): It is touch and go. The challenges with the Strait of Hormuz will likely continue. We expect conditions to remain relatively the same through Q4 and perhaps into Q1 of fiscal 2027. Conditions may improve in the second half of 2027. Q: Can you provide more detail on the power demand? Is it still mostly brownfield, and what is the visibility in the Test & Measurement business for 2027? A: Ram Krishnan (COO) & Lal Karsanbhai (CEO): Power demand to date has been mostly fleet modernization (brownfield), but we are starting to see greenfield opportunities in gas-fired power in North America, data centers (behind-the-meter), and nuclear. For T&M, we won't guide to 2027, but the order momentum is tremendous. Our growth is differentiated as we play largely in the validation and production side, which has a different cycle dynamic than the laboratory segment. We remain robust on semiconductors through 2027. Q: What are you seeing in MRO activity, and can you comment on the regional growth outlook outside of North America? A: Lal Karsanbhai (CEO): MRO is stable at about two-thirds of the business. We are seeing some delays in shutdown turnaround activity because facilities are being run hard. Day-to-day MRO remains strong. Regionally, the US is very strong (up 10% in sales). Europe was down 1% but better than expected, with positive orders. China improved to down 3%, and we expect it to continue improving sequentially into next year. Other Asia, powered by Japan, India, and Southeast Asia, was very strong. Q: Can Intelligent Devices return to historical peak growth levels without China picking up? And what is the through-cycle growth rate for Software and Systems? A: Ram Krishnan (COO): Yes, absolutely. The sales impact from the Middle East is mostly in Intelligent Devices, which will unlock in Q4 and next year. Our long-range framework is 6% to 9% growth for Software and Systems and 3% to 6% for Intelligent Devices. China is improving sequentially and we expect it to reach low-single-digit growth in 2027. In an upcycle, businesses like T&M can exceed the range, as seen with this year's 14% growth. Q: How much of the project funnel is greenfield versus brownfield, and is there a pricing differential? A: Ram Krishnan (COO): The bulk of the $12.4 billion funnel is greenfield. Brownfield modernization is tracked separately. We typically get better pricing on modernizations than greenfield, and better pricing on MRO than brownfield. Q: What kind of stability do customers in the Middle East need to see before normalizing orders, and how quickly could orders come through once a resolution is found? A: Lal Karsanbhai (CEO): Customers are wrestling with challenges, as some products like LNG cannot be easily transported via pipeline. They need certainty, likely in the form of an agreement between the US and Iran. However, we are seeing good quotation activity for large petrochemical and LNG expansions in Qatar, and we expect orders to be released relatively quickly once a resolution is achieved. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Emerson Electric Co.? Here are five stocks we like better. Emerson exceeded expectations in Q3 fiscal 2026, with underlying orders up 7%, sales up 6%, adjusted EPS rising 13% to $1.71, and free cash flow increasing 36% to $1.3 billion. The company raised its full-year outlook, now expecting 5% GAAP sales growth, 3.5% underlying sales growth, adjusted EPS of approximately $6.55, and free cash flow of about $3.6 billion. Growth was led by semiconductors, power generation, and test and measurement, while Emerson’s project funnel reached $12.4 billion. The company maintained its plan to return roughly $2.2 billion to shareholders in fiscal 2026 despite an estimated $100 million annual revenue impact from Middle East disruptions. 3 Industrial Names That Will Benefit from Rising CapEx in 2026 Emerson Electric (NYSE:EMR) reported third-quarter fiscal 2026 results that exceeded its expectations, citing broad-based order growth, stronger demand in North America and Asia, and continued momentum in power generation, semiconductors and test and measurement. President and Chief Executive Officer Lal Karsanbhai said underlying orders rose 7% in the quarter, while underlying sales increased 6%. The company’s growth verticals increased 27%, led by semiconductor growth of 53% and power growth of 37%. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Don't Miss Out on These Top 3 Stocks for a September to Remember “End market demand is robust, supported by secular trends in our growth verticals and meaningful investment in automation,” Karsanbhai said. Emerson raised its full-year outlook for sales, earnings and cash flow following the quarterly performance. The company now expects fiscal 2026 GAAP sales growth of 5%, underlying sales growth of 3.5%, adjusted earnings per share of about $6.55, and free cash flow of approximately $3.6 billion. It maintained its expectation for adjusted segment EBITA margin of about 28%. → 3 Drone Stocks That Should Soar After the Summer Slump American Superconductor's Earnings Surge, Future Growth Expected Chief Financial Officer Mike Baughman said adjusted earnings per share rose 13% year over year to $1.71, above the high end of Emerson’s prior guidance. Adjusted segment EBITA margin expanded 140 basis points to 28.5%, aided by better-than-expected volume and favorable segment mix. Price, cost reductions and price-cost performance more than offset inflation, he said. Third-quarter free cash flow increased 36% to $1.3 billion, representing a 27.1% margin. Baughman said cash generation benefited from operating performance, tariff refunds and the timing of tax payments that shifted from the third quarter into the fourth quarter. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Emerson’s backlog ended the quarter at $8.2 billion, up 7% from a year earlier, while book-to-bill was 1.0. Maintenance, repair and operations activity represented 65% of sales. Software & Systems: Underlying sales rose 11%, including 23% growth in Test & Measurement and 7% growth in Control Systems & Software. Segment margin was 31.8%, down 30 basis points from a strong prior-year comparison. The margin included a 1.5-point drag tied primarily to software contract renewals and a higher mix of lower-margin projects. Intelligent Devices: Underlying sales increased 5%, supported by the Middle East, project shipment timing and sensors. Segment margin rose 240 basis points to 27.9%, driven by volume leverage, price-cost and cost reductions. Safety & Productivity: Underlying sales grew 2%, led by electrical products and industrial activity in North America. Segment margin increased 80 basis points to 21.2% as price-cost discipline and cost reductions offset lower volume and inflation. Annual contract value for Emerson’s software portfolio increased 9% year over year to $1.68 billion. Management continues to expect annual contract value growth of more than 10% for the full fiscal year. Sales in the Americas rose 8%, including 10% growth in the United States. Software & Systems sales in the U.S. increased 14%, while Intelligent Devices increased 9%. Asia, the Middle East and Africa also grew 8%, led by 11% growth in the Middle East and Africa. China sales declined 3%, an improvement from the first half of the year, while Europe declined 1%. Karsanbhai said orders in Europe were positive during the quarter, while China improved sequentially. Test & Measurement orders increased 19%, including a 70% increase in semiconductor orders and double-digit gains in aerospace and defense. Orders in Emerson’s Ovation power-generation business increased 31%, reflecting investment in generation capacity, fleet modernization and grid infrastructure. Chief Operating Officer Ram Krishnan said power demand has largely been driven by fleet modernizations to date, though the company is beginning to see more new capacity projects. He cited gas-fired generation in North America, behind-the-meter data center opportunities, digital grid management and nuclear power as areas contributing to growth. Emerson’s project funnel expanded by $1.2 billion sequentially to $12.4 billion, up 8% from a year earlier. Power accounted for $3 billion of the funnel after growing by $450 million from the prior quarter. The LNG funnel increased $350 million to $2.2 billion. Management said the company won about $400 million from its project funnel during the quarter, with 80% coming from growth verticals. The company said its operations in the Middle East performed better than its reduced expectations despite continued supply-chain complexity and the regional conflict. Emerson’s field service engineers are operating at pre-conflict levels, though customer operating capacity remains at roughly 75%, according to Karsanbhai. Baughman said the Middle East created an approximately $25 million revenue headwind in the third quarter compared with the company’s February outlook, and Emerson expects a similar effect in the fourth quarter. The company continues to model an approximately $100 million fiscal-year impact from the conflict as the Strait of Hormuz remains effectively closed. Management said repair work is underway and large projects are progressing, while new opportunities are emerging in pipelines, storage and alternative export routes intended to improve energy security and reduce dependence on the Strait of Hormuz. Karsanbhai said customer activity in petrochemical and LNG expansions could move relatively quickly if conditions stabilize. Emerson repurchased $898 million of shares through the third quarter and maintained its plan to return approximately $2.2 billion to shareholders during fiscal 2026, including $1.2 billion in dividends and $1 billion in share repurchases. Karsanbhai also announced that Chief Technology Officer Peter Zornio will retire Dec. 31. Zornio joined Emerson in 2006 and has held leadership roles in the company’s automation business and technology organization. Rudy Sengupta will become senior vice president and chief technology and AI officer effective Aug. 15. Sengupta joined Emerson through its acquisition of NI and currently serves as vice president and general manager of Test and Analytics Software. Karsanbhai said the appointment supports Emerson’s strategy to advance AI-enabled automation and autonomous operations. Emerson Electric Co is a global technology and engineering company that designs and manufactures products and provides services for industrial, commercial and consumer markets. Founded in 1890, the company is headquartered in St. Louis, Missouri, and has built a long-standing presence in automation, control and climate-related technologies. Emerson's offerings are aimed at improving productivity, energy efficiency and reliability for a wide range of end markets. Emerson operates through two principal platforms—Automation Solutions and Commercial & Residential Solutions—providing process automation systems, measurement and analytical instrumentation, valves and actuators, control software, and related aftermarket services, alongside products for heating, ventilation and refrigeration, residential and commercial climate controls, tools and storage solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Emerson Electric Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Emerson Electric Co. EMR reported adjusted earnings of $1.71 per share for the third quarter of fiscal 2026 (ended June 2026), up 12.5% year over year. The figure beat the Zacks Consensus Estimate of $1.68 by 1.8%, aided by higher volume, favorable segment mix and cost reductions.Revenues increased 7% year over year to $4.87 billion and surpassed the consensus estimate of $4.79 billion by 1.6%. Underlying sales rose 6%, while underlying orders advanced 7%. Backlog, excluding AspenTech, increased 7% to $8.2 billion. Demand was broad-based across Emerson’s business groups, led by Software & Systems. The company recorded persistent strength in North America, Japan, India and Southeast Asia. Bookings across longer-cycle projects remained strong, supported by the power and aerospace & defense markets.The Americas and the Asia, Middle East and Africa each registered 8% underlying sales growth. U.S. sales increased 10%, while the Middle East and Africa advanced 11%. Europe declined 1%, and China fell 3%, reflecting continued softness in those markets. Emerson Electric Co. price-consensus-eps-surprise-chart | Emerson Electric Co. Quote Software & Systems revenues increased 11% year over year to $1.64 billion, exceeding management’s prior underlying growth expectation of approximately 8%. The group’s adjusted EBITA margin was 31.8%.Within the segment, Test & Measurement sales climbed 23% to $445 million, supported by strength in the Power, Semiconductor and Aerospace & Defense verticals. Control Systems & Software revenues advanced 7% to $1.20 billion. Annual contract value rose 9% year over year to $1.68 billion. Intelligent Devices generated revenues of $2.68 billion, up 6% on a reported basis and 5% on an underlying basis. The adjusted EBITA margin expanded to 27.9% from 25.5% in the prior-year quarter. Performance benefited from strength in power, liquefied natural gas and midstream gas.Within the segment, Safety & Productivity revenues increased 3% to $552 million, with underlying growth of 2%. Its adjusted EBITA margin improved to 21.2% from 20.4%. Momentum in electrical products and North American industrial activity was partly tempered by continued weakness in Europe and Automotive markets. The cost of sales increased 2.7% to $2.22 billion from the year-ago quarter. Selling, general and administrative expenses rose 6.1% year over year to $1.34 billion. Pretax earnings (on reported basis) increased to $916 million from $734 million, while the pretax margin expanded 270 basis points to 18.8%. Adjusted segment EBITA rose to $1.39 billion from $1.23 billion. The corresponding margin improved 140 basis points to 28.5%, as price-cost actions and cost reductions offset inflationary impact.Exiting the third quarter of fiscal 2026, Emerson had cash and cash equivalents of $2.18 billion compared with $1.54 billion at the end of fiscal 2025. Long-term debt was $7.53 billion compared with $8.32 billion at the end of fiscal 2025.Operating cash flow jumped 34% to $1.43 billion. Free cash flow increased 36.4% to $1.32 billion, helped by operational results, tariff refunds and the tax payment timing.For the first nine months of fiscal 2026, free cash flow rose 9%, with a margin of 19.0%. Emerson paid out dividends of $935 million and repurchased shares worth $898 million in the first nine months. Emerson raised its fiscal 2026 net sales growth forecast to approximately 5% and underlying sales growth guidance to about 3.5%. The prior outlook called for net sales growth of roughly 4.5% and underlying growth of around 3%. Adjusted earnings are now projected at approximately $6.55 per share.For the fiscal fourth quarter (ending September 2026), management expects net and underlying sales growth of approximately 5%. Adjusted earnings are projected at about $1.85 per share, while the adjusted segment EBITA margin is expected to be roughly 28.5%.The company continues to expect fiscal 2026 free cash flow of approximately $3.6 billion and operating cash flow of about $4.1 billion. Emerson plans to return roughly $2.2 billion to shareholders through approximately $1 billion in share repurchases and $1.2 billion in dividends. EMR currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks from the same space are discussed below:Applied Industrial Technologies AIT carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Applied Industrial’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 4.0%.  In the past 60 days, the Zacks Consensus Estimate for Applied Industrial’s fiscal 2026 bottom line has inched up 0.1%.IDEX Corporation IEX presently carries a Zacks Rank of 2. IDEX’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 7.7%. In the past 60 days, the Zacks Consensus Estimate for IEX’s 2026 earnings has increased 1.4%.The Middleby Corporation MIDD currently carries a Zacks Rank of 2. Middleby’s earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 10.4%. In the past 60 days, the Zacks Consensus Estimate for MIDD’s 2026 earnings has increased 0.3%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Emerson Electric Co. (EMR) : Free Stock Analysis Report Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report IDEX Corporation (IEX) : Free Stock Analysis Report The Middleby Corporation (MIDD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

ST. LOUIS, Aug. 4, 2026 /PRNewswire/ -- Emerson (NYSE: EMR) today reported results1 for its third quarter ended June 30, 2026 and updated its full year outlook for fiscal 2026. Emerson also declared a quarterly cash dividend of $0.555 per share of common stock payable September 10, 2026 to stockholders of record on August 14, 2026. Management Commentary "Emerson had an outstanding third quarter with sales, margin expansion, earnings and cash flow all exceeding expectations," said Emerson President and Chief Executive Officer Lal Karsanbhai. "Demand was robust, with underlying orders up 7%, led by Software & Systems and broad-based growth in North America and Asia. The conflict in the Middle East remains fluid, and I am proud of our team's ability to deliver results and support our customers around the world." Karsanbhai continued, "We are raising our full year guidance, reflecting our strong third quarter performance and healthy demand. Secular tailwinds continue to support sustained investment in our growth verticals and provide a solid foundation as we finish 2026 and look ahead to 2027." 2026 Outlook The following tables summarize the fiscal year 2026 guidance framework. As we pivot capital allocation to returning cash to shareholders, the 2026 outlook assumes returning ~$2.2B through ~$1B share repurchases and ~$1.2B of dividends. Conference Call Today, beginning at 3:30 p.m. Central Time / 4:30 p.m. Eastern Time, Emerson management will discuss the third quarter results during an investor conference call. Participants can access a live webcast available at https://ir.emerson.com 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 automation leader delivering solutions for the most demanding technology challenges. Headquartered in St. Louis, Missouri, Emerson is engineering the autonomous future, enabling customers to optimize operations and accelerate innovation. 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 represent management's expectations, based on currently available information. Actual results, performance or achievements could differ materially from those expressed in any forward-looking statement. Any forward-looking statements in this press release speak only as of the date of this press release. Emerson undertakes no obligation to update any such statements to reflect new information or later developments. Examples of risks and uncertainties that may cause our actual results or performance to be materially different from those expressed or implied by forward looking statements include the scope, duration and ultimate impacts of the Russia-Ukraine, Middle East 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, https://ir.emerson.com, 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. (tables attached) View original content to download multimedia:https://www.prnewswire.com/news-releases/emerson-reports-third-quarter-2026-results-raises-2026-outlook-302842664.html

For the quarter ended June 2026, Emerson Electric (EMR) reported revenue of $4.87 billion, up 7% over the same period last year. EPS came in at $1.71, compared to $1.52 in the year-ago quarter. The reported revenue represents a surprise of +1.64% over the Zacks Consensus Estimate of $4.79 billion. With the consensus EPS estimate being $1.68, the EPS surprise was +1.79%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Emerson Electric performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Net Sales- Intelligent Devices- Total: $2.68 billion compared to the $2.64 billion average estimate based on three analysts. The reported number represents a change of -14.3% year over year. Net Sales- Software & Systems- Control Systems & Software: $1.2 billion versus the three-analyst average estimate of $1.18 billion. The reported number represents a year-over-year change of +10.7%. Net Sales- Intelligent Devices- Final Control: $1.59 billion compared to the $1.58 billion average estimate based on three analysts. The reported number represents a change of +42.1% year over year. Net Sales- Intelligent Devices- Sensors: $1.09 billion versus the three-analyst average estimate of $1.06 billion. Net Sales- Software & Systems- Test & Measurement: $445 million versus $413.56 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +23.3% change. Net Sales- Safety & Productivity: $552 million versus $554.18 million estimated by three analysts on average. Net Sales- Software & Systems- Total: $1.64 billion compared to the $1.59 billion average estimate based on three analysts. The reported number represents a change of +13.9% year over year. Adjusted EBITA- Intelligent Devices- Total: $747 million compared to the $723.09 million average estimate based on three analysts. Adjusted EBITA- Software & Systems- Test & Measurement: $132 million versus the three-analyst average estimate of $111.57 million. Adjusted EBITA- Software & Systems- Total: $523 million compared to the $499.8 million average estimate based on three analysts. Adjusted EBITA- Safety & Productivity: $117 million compared to the $119.89 million average estimate based on three analysts. Adjusted EBITA- Software & Systems- Control Systems & Software: $391 million versus $388.23 million estimated by three analysts on average. View all Key Company Metrics for Emerson Electric here>>> Shares of Emerson Electric have returned +9.4% over the past month versus the Zacks S&P 500 composite's +1.7% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Emerson Electric Co. (EMR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Emerson Electric (EMR) came out with quarterly earnings of $1.71 per share, beating the Zacks Consensus Estimate of $1.68 per share. This compares to earnings of $1.52 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +1.79%. A quarter ago, it was expected that this maker of process controls systems, valves and analytical instruments would post earnings of $1.54 per share when it actually produced earnings of $1.54, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Emerson Electric, which belongs to the Zacks Manufacturing - Electronics industry, posted revenues of $4.87 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.64%. This compares to year-ago revenues of $4.55 billion. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Emerson Electric shares have added about 16.7% since the beginning of the year versus the S&P 500's gain of 11%. While Emerson Electric has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Emerson Electric was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.81 on $5.1 billion in revenues for the coming quarter and $6.49 on $18.79 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Manufacturing - Electronics is currently in the top 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Pioneer Power Solutions, Inc. (PPSI), is yet to report results for the quarter ended June 2026. This company is expected to post quarterly loss of $0.16 per share in its upcoming report, which represents a year-over-year change of -45.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Pioneer Power Solutions, Inc.'s revenues are expected to be $5.1 million, down 39.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Emerson Electric Co. (EMR) : Free Stock Analysis Report Pioneer Power Solutions, Inc. (PPSI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research