Emerson — Fourth Quarter and Full Year 2026 Earnings Summary

Financial Performance:

• Net sales for Q4 2026 were $5,201 million, a 7% increase year-over-year (YoY) from $4,855 million in Q4 2025; full-year 2026 net sales were $18,982 million, up 5% from $18,016 million in 2025.
• Underlying sales growth was 7% in Q4 2026 and 4% for the full year 2026.
• Pretax earnings were $997 million in Q4 2026 (19.2% margin), an increase from $760 million (15.6% margin) in Q4 2025; full-year pretax earnings were $3,489 million (18.4% margin) compared to $2,905 million (16.1% margin) in 2025.
• Adjusted segment EBITA was $1,511 million in Q4 2026 (29.1% margin) versus $1,333 million (27.5% margin) in Q4 2025; full-year 2026 adjusted segment EBITA was $5,360 million (28.2% margin) versus $4,975 million (27.6% margin) in 2025.
• GAAP earnings per share (EPS) were $1.33 in Q4 2026 (up 24% from $1.07) and $4.79 for full-year 2026 (up 20% from $3.99).
• Adjusted EPS were $1.86 in Q4 2026 (up 15% from $1.62) and $6.59 for full-year 2026 (up 10% from $6.01).
• Operating cash flow was $1,075 million in Q4 2026 (up 6% from $1,011 million) and $3,978 million for full-year 2026 (up 8% from $3,676 million).
• Free cash flow was $916 million in Q4 2026 (up 9% from $843 million) and $3,535 million for full-year 2026 (up 9% from $3,245 million).
• Total assets were $41,814 million at September 30, 2026, compared to $41,964 million in 2025; total equity was $20,756 million compared to $20,298 million in 2025.
• Short-term borrowings and current maturities of long-term debt were $4,667 million at September 30, 2026, down from $4,797 million in 2025; long-term debt was $7,508 million, down from $8,319 million in 2025.

Guidance and Future Outlook:

• Emerson provided initial 2027 guidance assuming the return of approximately $3.8 billion through ~$2.5 billion in share repurchases and ~$1.3 billion in dividends.
• 2027 Net Sales Growth is guided at approximately 5% for Q1 and the full year.
• 2027 Underlying Sales Growth is guided at approximately 5% for Q1 and the full year.
• 2027 Adjusted EPS is guided at approximately $7.25 for the full year, with Q1 guidance of $1.58 to $1.62.
• 2027 Operating Cash Flow is guided at $4.3 billion to $4.4 billion.
• 2027 Free Cash Flow is guided at $3.8 billion to $3.9 billion.
• 2027 Share Repurchases are guided at approximately $2.5 billion.
• Management expressed confidence in 2027 plans citing a robust backlog and favorable demand trends in growth verticals.

Business Segments and Product Lines:

• Control Systems & Software sales grew 14% in Q4 2026 (underlying 14%) and 6% for the full year (underlying 5%).
• Test & Measurement sales grew 14% in Q4 2026 (underlying 15%) and 17% for the full year (underlying 15%).
• Software & Systems sales grew 14% in Q4 2026 (underlying 14%) and 8% for the full year (underlying 7%).
• Sensors sales grew 4% in Q4 2026 (underlying 3%) and 4% for the full year (underlying 3%).
• Final Control sales grew 5% in Q4 2026 (underlying 5%) and 4% for the full year (underlying 2%).
• Intelligent Devices sales grew 5% in Q4 2026 (underlying 4%) and 4% for the full year (underlying 3%).
• Safety & Productivity sales grew 2% in Q4 2026 (underlying 2%) and 3% for the full year (underlying 2%).
• Underlying orders increased 14% in Q4 2026 and 9% for the full year 2026.
• Demand was described as broad-based with substantial growth across all business groups and regions.

Market and Competitive Landscape:

• Q4 2026 sales growth by geography was 9% in the Americas, 1% in Europe, and 7% in Asia, Middle East & Africa.
• Full-year 2026 sales growth by geography was 7% in the Americas, (1)% in Europe, and 3% in Asia, Middle East & Africa.
• Management highlighted exceptional long-cycle project activity in growth verticals as a driver for order growth.
• The company describes its portfolio as resilient with a software-defined technology stack aligned with long-term secular trends.

Risks and Challenges:

• Forward-looking statements note risks including the scope, duration, and impacts of global conflicts (Russia-Ukraine, Middle East), economic and currency conditions, market demand, pricing, intellectual property protection, cybersecurity, tariffs, competitive factors, and inflation.
• Restructuring and related costs were $63 million in Q4 2026 and $227 million for full-year 2026.
• Amortization of intangibles was $251 million in Q4 2026 and $1,013 million for full-year 2026.

Management Commentary and Tone:

• CEO Lal Karsanbhai stated that Emerson "capped a strong 2026 with fourth quarter sales and profitability exceeding expectations."
• Management noted that underlying orders were supported by exceptional long-cycle project activity.
• The tone was confident, emphasizing a "robust backlog" and "favorable demand trends."

Other Key Points:

• Emerson declared a 7% quarterly cash dividend increase to $0.595 per share, payable December 10, 2026, to stockholders of record November 13, 2026.
• Non-controlling interests for AspenTech ceased as of March 12, 2025, following the completion of the buy-in.
• IEEPA tariff refunds net of charitable trust contribution resulted in a $9 million impact in Q4 2026 and a $91 million impact for full-year 2026.
• Capital expenditures were $159 million in Q4 2026 and $443 million for full-year 2026.
• Purchases of common stock were $1,000 million for full-year 2026.