Emerson Electric Co. EMR reported second-quarter fiscal 2026 (ended March 31, 2026) adjusted earnings of $1.54 per share, which increased 4.1% year over year and came in line with the Zacks Consensus Estimate.
The quarter reflected resilient demand and pricing strength, partially offset by disruptions from the Middle East conflict and software contract renewal dynamics. The company’s underlying orders increased 5%, while backlog rose 9% year over year to $8.2 billion.
EMR Records Modest Sales Growth Amid Headwinds
Revenues of $4.56 billion rose 2.9% year over year with underlying sales growth of 0.5% but missed the consensus mark by 1.1%. Pricing contributed 3.5% to sales growth. Regionally, the Americas delivered 5% underlying sales growth, which helped offset declines of 4% in Europe and 5% in Asia, the Middle East and Africa.
Emerson’s Mixed Segmental Performance
The Intelligent Devices group’s net sales were $2.51 billion, up 2% year over year. However, underlying sales declined 1%. The group consists of two segments, namely Final Control and Sensors.
Final Control segment’s sales increased 2% year over year to $1.49 billion. The Sensors segment generated sales of $1.02 billion, reflecting a 2% year-over-year increase.
The Software & Systems group generated net sales of $1.50 billion, up 4% year over year. Underlying sales increased 1%. The group consists of two segments, namely Control Systems & Software and Test & Measurement.
Control Systems & Software reported sales of $1.09 billion, reflecting a slight decline year over year. Test & Measurement sales were $414 million, increasing 16% year over year.
The Safety & Productivity segment generated net sales of $547 million, up 5% year over year. Underlying sales increased 2%.
Emerson Electric Co. Price, Consensus and EPS Surprise
Emerson Electric Co. price-consensus-eps-surprise-chart | Emerson Electric Co. Quote
EMR Margins Reflect Cost Discipline
The cost of sales increased 3.8% to $2.14 billion from the year-ago quarter. Selling, general and administrative expenses rose 3.1% year over year to $1.32 billion.
The pretax earnings margin was 17.4% compared with 14.2% in the year-ago period. Adjusted segment EBITA margin was 27.6%, down 40 basis points from 28.0% in the prior-year quarter.
Emerson’s Cash Flow and Balance Sheet
Exiting the first six months of fiscal 2026, Emerson had cash and cash equivalents of $1.79 billion compared with $1.54 billion at the end of fiscal 2025. Long-term debt was $7.56 billion compared with $8.32 billion at the end of fiscal 2025.
In the first six months of 2026, the company generated net cash of $1.48 billion from operating activities compared with $1.02 billion in the year-ago period. Capital expenditure was $182 million, up from $170 million in the year-ago period. Emerson paid out dividends of $624 million and repurchased shares worth $542 million in the same period.
EMR Outlook Updated for Fiscal 2026
For fiscal 2026, Emerson now expects net sales growth of approximately 4.5% and underlying sales growth of around 3%, reflecting the impact of ongoing geopolitical challenges.
The company projects adjusted earnings per share in the range of $6.45-$6.55. Free cash flow is expected to be between $3.5 billion and $3.6 billion.
Management expects a stronger second half of the year, supported by solid order momentum, a robust backlog and continued strength in power, life sciences and LNG end markets.
EMR’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
Graco Inc. GGG posted quarterly earnings of 66 cents per share in the first quarter of 2026, missing the Zacks Consensus Estimate of 75 cents per share. This compares with earnings of 70 cents per share a year ago.
Graco posted revenues of $540.1 million for the quarter, missing the Zacks Consensus Estimate by 3.5%. This compares with year-ago revenues of $528.3 million.
Stanley Black & Decker, Inc. SWK reported first-quarter 2026 adjusted earnings of 80 cents per share, which beat the Zacks Consensus Estimate of 61 cents. The bottom line increased 6.7% year over year.
Stanley Black’s net sales of $3.85 billion beat the consensus estimate of $3.74 billion. The top line increased 2.7% from the year-ago quarter.
Ingersoll Rand Inc. IR reported first-quarter 2026 adjusted earnings of 77 cents per share, which surpassed the Zacks Consensus Estimate of 74 cents. The bottom line increased 7% year over year.
Total revenues of $1.85 billion beat the consensus estimate of $1.83 billion. The top line increased 7.6% year over year.
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This article originally published on Zacks Investment Research (zacks.com).