Emerson Electric Co. (NYSE:EMR) shares fell 6.29% in premarket trading on Wednesday, after the industrial automation company missed revenue estimates for the fiscal fourth quarter, even as it met earnings forecasts and issued strong guidance for the year ahead.
For the quarter ended September 30, Emerson reported adjusted earnings of $1.62 per share, in line with analyst expectations. However, revenue came in at $4.86 billion, slightly below the consensus estimate of $4.9 billion, despite 4% underlying sales growth. The Software and Control segment led performance with 8% growth, offsetting slower expansion in other business areas.
“Emerson delivered a solid fiscal 2025, marked by continued margin expansion, robust cash generation and strong execution,” said Lal Karsanbhai, President and Chief Executive Officer. “Our portfolio is aligned with long-term secular trends positioned to drive sustainable growth into the future.”
The company’s adjusted segment EBITA margin improved to 27.5%, up 130 basis points from 26.2% a year earlier, reflecting stronger operational efficiency. Free cash flow totaled $843 million, down 7% year-over-year from $905 million, as higher working capital requirements weighed on results.
Looking ahead, Emerson provided a bullish forecast for fiscal 2026, expecting adjusted earnings per share between $6.35 and $6.55, above Wall Street’s $6.00 consensus. The company anticipates underlying sales growth of around 4% for the full year, supported by continued demand for automation, digital transformation, and sustainability-driven solutions.
Emerson also raised its quarterly dividend by 5% to $0.555 per share and authorized a new buyback of up to 50 million shares, supplementing the 20 million shares remaining under a prior authorization. Altogether, the company expects to return about $2.2 billion to shareholders in fiscal 2026, including $1 billion in share repurchases and $1.2 billion in dividends.
Despite the revenue shortfall, Emerson’s expanding margins, strong backlog, and shareholder return plans underscore confidence in the company’s ability to deliver sustained growth in the coming year.