Emerson Electric's stock falls on Q4 results, cautious guidance

[Emerson company]
Aziz Shamuratov /iStock Editorial via Getty Images

Emerson Electric’s (EMR [https://seekingalpha.com/symbol/EMR]) shares fell 7.2% in premarket trading Wednesday after the industrial automation company reported [https://seekingalpha.com/news/4515550-emerson-electric-non-gaap-eps-of-1_62-in-line-revenue-of-4_86b-misses-by-40m] fiscal fourth-quarter results that matched profit expectations but came in just shy of revenue estimates, while issuing a cautious outlook for fiscal 2026.

Emerson (EMR [https://seekingalpha.com/symbol/EMR]) posted adjusted earnings of $1.62 a share, in line with Wall Street forecasts, on revenue of $4.86 billion, slightly below analysts’ expectations of $4.9 billion.

Net income rose to $653 million, or $1.12 a share, from $566 million, or $0.97 a share, a year earlier.

The company said earnings, before interest, taxes, depreciation and amortization, or ebitda, improved as margins expanded on higher pricing and cost controls, with adjusted segment ebita rising 10% to $1.33 billion, a margin of 27.5%.

Emerson’s (EMR [https://seekingalpha.com/symbol/EMR]) 2026 guidance called for sales growth of about 5.5% and adjusted earnings of $6.35 to $6.55 a share, suggesting modest upside after a strong fiscal 2025. The consensus estimate is $6.54 a share.

Operating cash flow fell 6% in the latest quarter to $1.01 billion, and management noted that underlying order growth slowed to 4%, down from 6% in the prior year’s quarter, signaling some moderation in demand.

Chief Executive Lal Karsanbhai highlighted progress in integrating the company’s AspenTech and Test & Measurement acquisitions, which together are expected to deliver $200 million in cost synergies. In a statement, he said Emerson’s portfolio remains “aligned with long-term secular trends,” but the guidance indicates more measured growth expectations amid a softer industrial backdrop.

The company also announced a 5% dividend increase to $0.555 a share and a new authorization to repurchase up to 50 million shares, signaling confidence in its balance sheet despite the near-term slowdown.

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