Emerson Q4 Adjusted EPS Rises 15% as Orders Increase 14%

Emerson reported on November 4, 2026 that fourth-quarter net sales rose 7% to $5.201 billion and adjusted earnings per share increased 15% to $1.86, alongside an initial fiscal 2027 outlook and a 7% quarterly dividend increase.

The results cover the quarter ended September 30, 2026 and are presented on a continuing-operations basis. GAAP EPS climbed 24% to $1.33 from $1.07, while pretax earnings increased to $997 million from $760 million. That lifted the pretax margin to 19.2% from 15.6%, showing profitability expanding faster than revenue. Adjusted EPS excludes intangible amortization, restructuring and related costs, and other specified items.

Volume supplied four percentage points of the quarter’s sales growth and price supplied three, with better volume and segment mix driving performance above expectations, according to the earnings presentation. Price-cost and cost reductions outpaced inflation.

Orders and Backlog Show Demand

Underlying orders increased 14% in the quarter and 9% for the full year. Underlying sales and orders exclude currency translation and significant acquisitions and divestitures; orders also exclude AspenTech. Software & Systems orders grew 18% and Intelligent Devices orders 13%, with regional growth led by North America at 15% and the Middle East at 42%.

President and Chief Executive Officer Lal Karsanbhai pointed to “exceptional long-cycle project activity in our growth verticals.” Power, LNG and aerospace and defense led that activity, although China remained weak.

Software & Systems generated $1.712 billion of quarterly sales with 14% underlying growth, compared with 4% growth on $2.916 billion of sales at Intelligent Devices. Safety & Productivity added $573 million of sales and 2% underlying growth. The quarter-ending project funnel was $13 billion, while backlog excluding AspenTech stood at $8.2 billion, up 11% from a year earlier.

Cash Generation Supports Higher Returns

For the full fiscal year, net sales increased to $18.982 billion from $18.016 billion, while adjusted EPS rose 10% to $6.59. Operating cash flow grew 8% to $3.978 billion and free cash flow rose 9% to $3.535 billion. Emerson calculates free cash flow as operating cash flow less capital expenditures, which totaled $443 million. The company returned $2.2 billion to shareholders during fiscal 2026.

The new quarterly dividend is $0.595 per share, payable December 10, 2026 to shareholders of record on November 13, 2026.

Fiscal 2027 Plan Increases Cash Returns

Emerson’s initial fiscal 2027 framework targets approximately 5% reported and underlying sales growth, GAAP EPS of about $5.70 and adjusted EPS of about $7.25. Operating cash flow is projected at $4.3 billion to $4.4 billion, with free cash flow of $3.8 billion to $3.9 billion after approximately $500 million of capital expenditures.

The plan assumes roughly $3.8 billion returned to shareholders through about $2.5 billion of share repurchases and $1.3 billion of dividends. The framework also includes approximately $1.5 billion of first-quarter repurchases.

Full-year underlying sales guidance is 7% to 8% for Software & Systems, approximately 4% for Intelligent Devices and 3% to 4% for Safety & Productivity. Management’s outlook assumes growth driven by the United States, India and the Middle East and Africa, sustained momentum in power, LNG, life sciences, semiconductor and aerospace and defense markets, and continued weakness in Europe.

The connection between the two years is therefore order conversion: the backlog and long-cycle project activity underpin the sales plan, while the cash-flow targets underpin the increase in shareholder returns. Software & Systems is expected to lead that growth, with Europe’s weakness the main regional qualification in management’s assumptions.