Emerson Electric Q3 2025 Earnings Call Highlights: Strong Profitability Amid Market Challenges

Emerson Electric Co reported Q3 2025 earnings with an adjusted EPS of $1.52, meeting guidance. Sales growth was impacted by easing surcharges, while the Intelligent Devices segment faced profitability challenges due to tariffs and unexpected FX impacts. However, the Test & Measurement segment showed significant recovery, and Emerson's industrial software ACV grew double digits to $1.5 billion.

Title: Emerson Electric Co Reports Q3 2025 Earnings

Emerson Electric Co (NYSE: EMR) reported its Q3 2025 earnings, with an adjusted earnings per share (EPS) of $1.52, meeting the top end of its guidance. The company's underlying sales growth was 3%, influenced by easing surcharges. Despite these challenges, the Test & Measurement segment experienced significant recovery, with orders up by 16%, indicating strong market demand. The industrial software annual contract value (ACV) grew double digits to $1.5 billion.

However, the Intelligent Devices segment faced profitability challenges due to tariffs and unexpected foreign exchange impacts, impacting its margin by 40 basis points. Europe's sales were down 7%, highlighting regional challenges in market performance. The discrete automation market, particularly in automotive and packaging in Western Europe and China, remains relatively depressed. The tariff environment remains dynamic, with Emerson's annualized gross incremental tariff impact now estimated at $210 million, affecting profitability.

The company's free cash flow generation was better than expected, resulting in a margin of 21.3%. The adjusted segment EBITDA margin was 27.1%, impacted by 40 basis points due to tariffs. The backlog increased to $7.6 billion, with a book-to-bill ratio of 1%. Price contribution was 2.5 points in the quarter.

Looking ahead, Emerson expects underlying sales growth of 5% to 6% and adjusted EPS between $1.58 and $1.62 in the fourth quarter. For the full year, the company expects underlying sales to be up approximately 3.5%, with adjusted EPS of approximately $6 per share.

References
[1] https://finance.yahoo.com/news/emerson-electric-co-emr-q3-070655503.html
[2] https://www.gurufocus.com/news/3039276/emerson-electric-co-q3-2025-earnings-adjusted-eps-of-152-beats-estimates-revenue-falls-short-at-4553-million
[3] https://www.ainvest.com/news/emerson-electric-q3-2025-earnings-strategic-buy-industrial-automation-transforms-2508/