Emerson Boosts Full-Year EPS Guidance on Resilient Q2

Overview

• Emerson reported adjusted EPS of $1.54 for fiscal Q2 with underlying orders up 5% and underlying sales up 0.5%.
• The company raised full-year adjusted EPS guidance to $6.45–$6.55 and kept its adjusted segment EBITDA margin target near 28%, with plans for $3.5–$3.6 billion in free cash flow and about $2.2 billion in shareholder returns.
• A regional conflict in the Middle East cut about 1 point of Q2 sales, and management expects roughly $100 million more disruption in the second half with a similar-sized rebuild and restart opportunity to follow.
• Finance chief Mike Baughman said software contract renewal timing reduced reported sales growth by about 2 percentage points, expanded margin by 90 basis points, and lowered EPS by $0.09.
• Growth stayed concentrated in Software & Systems, Test & Measurement, and Ovation, where orders rose 18%, 12%, and 41% respectively, and the project funnel reached $11.2 billion with about $450 million in quarterly wins.