emr-20251231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from ____________________ to __________________

Commission file number 1-278

EMERSON ELECTRIC CO.

(Exact name of registrant as specified in its charter)


Missouri		43-0259330
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


8027 Forsyth Blvd
St. Louis,	Missouri	63105
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (314) 553-2000

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock of $0.50 par value per share	EMR	New York Stock Exchange
		NYSE Texas
2.000% Notes due 2029	EMR 29	New York Stock Exchange
3.000% Notes due 2031	EMR 31A	New York Stock Exchange
3.500% Notes due 2037	EMR 37	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common stock of $0.50 par value per share outstanding at December 31, 2025: 562.0 million shares.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Statements of Earnings

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three months ended December 31, 2024 and 2025

(Dollars in millions, except per share amounts; unaudited)


	Three Months Ended December 31,
		2024		2025
Net sales		$	4,175	4,346

Cost of sales		1,940		2,035
Selling, general and administrative expenses		1,224		1,242
Other deductions, net		228		204
Interest expense (net of interest income of $44 and $26, respectively)		8		90

Earnings before income taxes		775		775

Income taxes		182		169





Net earnings		593		606

Less: Noncontrolling interests in subsidiaries		8		1

Net earnings common stockholders		$	585	605






Earnings per share:
Basic		$	1.03	1.08




Diluted		$	1.02	1.07



Weighted average outstanding shares:
Basic		568.5		561.8
Diluted		571.1		564.1

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three months ended December 31, 2024 and 2025

(Dollars in millions; unaudited)


	Three Months Ended December 31,
	2024		2025
Net earnings	$	593	606

Other comprehensive income (loss), net of tax:
Foreign currency translation	(492)		(20)
Pension and postretirement	3		4
Cash flow hedges	10		8
Total other comprehensive income (loss)	(479)		(8)

Comprehensive income	114		598

Less: Noncontrolling interests in subsidiaries	1		—
Comprehensive income common stockholders	$	113	598

See accompanying Notes to Consolidated Financial Statements.

Consolidated Balance Sheets

EMERSON ELECTRIC CO. & SUBSIDIARIES

(Dollars and shares in millions, except per share amounts; unaudited)


	Sept 30, 2025		Dec 31, 2025
ASSETS
Current assets
Cash and equivalents	$	1,544	1,748
Receivables, less allowances of $123 and $124, respectively	3,101		2,972
Inventories	2,213		2,353
Other current assets	1,725		1,770
Total current assets	8,583		8,843

Property, plant and equipment, net	2,871		2,867
Other assets
Goodwill	18,193		18,182
Other intangible assets	9,458		9,205
Other	2,859		2,842
Total other assets	30,510		30,229
Total assets	$	41,964	41,939

LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings and current maturities of long-term debt	$	4,797	5,832
Accounts payable	1,384		1,339
Accrued expenses	3,616		3,349
Total current liabilities	9,797		10,520

Long-term debt	8,319		7,575

Other liabilities	3,550		3,552

Equity
Common stock, $0.50 par value; authorized, 1,200.0 shares; issued, 953.4 shares; outstanding, 562.8 shares and 562.0 shares, respectively	477		477
Additional paid-in-capital	85		16
Retained earnings	40,603		40,871
Accumulated other comprehensive income (loss)	(821)		(828)
Cost of common stock in treasury, 390.6 shares and 391.4 shares, respectively	(20,062)		(20,259)
Common stockholders’ equity	20,282		20,277
Noncontrolling interests in subsidiaries	16		15
Total equity	20,298		20,292
Total liabilities and equity	$	41,964	41,939

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Equity

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three months ended December 31, 2024 and 2025

(Dollars in millions; unaudited)


	Three Months Ended December 31,
	2024		2025

Common stock	$	477	477

Additional paid-in-capital
Beginning balance	169		85
Stock plans	(56)		(92)
Reclass negative APIC to retained earnings	—		23
Ending balance	113		16

Retained earnings
Beginning balance	40,830		40,603
Net earnings common stockholders	585		605
Dividends paid (per share: $0.5275 and $0.555, respectively)	(303)		(314)
Reclass negative APIC to retained earnings	—		(23)
Ending balance	41,112		40,871

Accumulated other comprehensive income (loss)
Beginning balance	(868)		(821)
Foreign currency translation	(485)		(19)
Pension and postretirement	3		4
Cash flow hedges	10		8
Ending balance	(1,340)		(828)

Treasury stock
Beginning balance	(18,972)		(20,062)
Purchases	(946)		(252)
Issued under stock plans	46		55
Ending balance	(19,872)		(20,259)

Common stockholders' equity	20,490		20,277

Noncontrolling interests in subsidiaries
Beginning balance	5,873		16
Net earnings	8		1
Stock plans	15		—
Dividends paid	—		(1)
Other comprehensive income	(7)		(1)
Ending balance	5,889		15

Total equity	$	26,379	20,292

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Cash Flows

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three Months Ended December 31, 2024 and 2025

(Dollars in millions; unaudited)


	Three Months Ended
	December 31,
	2024		2025
Operating activities
Net earnings	$	593	606

Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	383		359
Stock compensation	68		55

Changes in operating working capital	(154)		(357)
Other, net	(113)		36


Cash provided by operating activities	777		699

Investing activities
Capital expenditures	(83)		(97)
Purchases of businesses, net of cash and equivalents acquired	(37)		—

Other, net	(22)		(28)


Cash used in investing activities	(142)		(125)

Financing activities
Net increase (decrease) in short-term borrowings	2		(485)
Proceeds from short-term borrowings greater than three months	—		3,473
Payments of short-term borrowings greater than three months	—		(2,099)
Payments of long-term debt	(2)		(587)
Dividends paid	(301)		(312)
Purchases of common stock	(899)		(250)

Other, net	(91)		(104)
Cash used in financing activities	(1,291)		(364)

Effect of exchange rate changes on cash and equivalents	(98)		(6)
Increase (decrease) in cash and equivalents	(754)		204
Beginning cash and equivalents	3,588		1,544
Ending cash and equivalents	$	2,834	1,748

Changes in operating working capital
Receivables	$	156	119
Inventories	(86)		(141)
Other current assets	(5)		(52)
Accounts payable	(53)		(33)
Accrued expenses	(166)		(250)
Total changes in operating working capital	$	(154)	(357)

See accompanying Notes to Consolidated Financial Statements.

Notes to Consolidated Financial Statements

EMERSON ELECTRIC CO. & SUBSIDIARIES

(Dollars and shares in millions, except per share amounts or where noted)

(1) BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited consolidated financial statements of Emerson Electric Co. ("Emerson", "we", "us", "our" or the "Company") include all adjustments necessary for a fair presentation of operating results for the interim periods presented. Adjustments consist of normal and recurring accruals. The consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all disclosures required for annual financial statements presented in conformity with U.S. generally accepted accounting principles (GAAP). For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2025.

On November 20, 2025, Emerson announced that with the completion of the Company's transformation, it has revised its management organization and updated its reportable segments. Effective in fiscal 2026, Emerson now reports results for five segments: Control Systems & Software and Test & Measurement, which are combined and reported as the Software & Systems group; Sensors and Final Control, which are combined and reported as the Intelligent Devices group; and Safety & Productivity. Prior year amounts have been reclassified to conform to the current year presentation. See Note 13 for further details.

(2) REVENUE RECOGNITION

Emerson is a global technology and software company that provides innovative solutions for customers in a wide range of end markets around the world. The majority of the Company's revenues relate to a broad offering of manufactured products and software which are recognized at the point in time when control transfers, while a smaller portion is recognized over time or relates to sales arrangements with multiple performance obligations. See Note 13 for additional information about the Company's revenues.

The following table summarizes the balances of the Company's unbilled receivables (contract assets), which are reported in Other assets (current and noncurrent), and its customer advances (contract liabilities), which are reported in Accrued expenses and Other liabilities.


	Sept 30, 2025			Dec 31, 2025
Unbilled receivables (contract assets)		$	1,891		1,900
Customer advances (contract liabilities)		(1,105)			(1,171)
Net contract assets (liabilities)		$	786		729

The majority of the Company's contract balances relate to (1) arrangements where revenue is recognized over time and payments from customers are made according to a contractual billing schedule, and (2) revenue from term software license arrangements where the license revenue is recognized upfront upon delivery. Revenue recognized for the three months ended December 31, 2025 included $428 that was included in the beginning contract liability balance. Other factors that impacted the change in net contract assets were immaterial. Revenue recognized for the three months ended December 31, 2025 for performance obligations that were satisfied in previous periods, including cumulative catchup adjustments on the Company's long-term contracts, was immaterial.

As of December 31, 2025, the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was approximately $9.2 billion. The Company expects to recognize approximately 75 percent of its remaining performance obligations as revenue over the next 12 months, with the remainder substantially over the following two years.

(3) COMMON SHARES

Reconciliations of weighted-average shares for basic and diluted earnings per common share follow. Diluted earnings per share are calculated using the two-class method. Earnings allocated to participating securities were inconsequential.


	Three Months Ended December 31,
	2024	2025

Basic shares outstanding	568.5	561.8
Dilutive shares	2.6	2.3
Diluted shares outstanding	571.1	564.1

(4) ACQUISITIONS AND DIVESTITURES

AspenTech

On March 12, 2025, Emerson completed its purchase of the remaining outstanding shares of common stock of AspenTech not already owned by the Company for approximately $7.2 billion. Emerson also incurred fees of $76 ($65 after-tax) and paid $76 to settle certain AspenTech share-based awards that were outstanding prior to the transaction closing. The purchase of the remaining outstanding shares and related costs were reported as an adjustment to Equity in 2025. Separately, AspenTech incurred $127 ($113 after-tax) of deal-related fees which were reported as acquisition/divestiture costs in Other deductions, net in 2025. AspenTech is now reported as a part of the Control Systems & Software segment in the Software & Systems business group, see Note 13.

Other Transactions

On November 15, 2024, AspenTech acquired Open Grid Systems Limited, a global provider of network model management technology and a pioneer in developing model-driven applications supporting open access to data through industry standards, for a total purchase price of $46, net of cash acquired. The Company recognized goodwill of $32 (none of which is expected to be tax deductible) and other identifiable intangible assets of $20, consisting of developed technology and customer relationships with a weighted-average useful life of approximately 5 years.

(5) PENSION & POSTRETIREMENT PLANS

Total periodic pension and postretirement (income) expense is summarized below:


	Three Months Ended December 31,
		2024		2025
Service cost		$	18	19
Interest cost		48		48
Expected return on plan assets		(73)		(75)
Net amortization		4		5
Total		$	(3)	(3)

(6) OTHER DEDUCTIONS, NET

Other deductions, net are summarized below:


	Three Months Ended December 31,
	2024			2025

Amortization of intangibles (intellectual property and customer relationships)		$	229	205
Restructuring costs		11		9
Acquisition/divestiture costs		13		1
Foreign currency transaction (gains) losses		1		13
Other		(26)		(24)
Total		$	228	204

For the three months ended December 31, 2025, the decrease in intangibles amortization was largely due to backlog amortization of $26 in the prior year related to the AspenTech acquisition. Other is composed of several items, including pension expense, litigation costs, provision for bad debt and other items, none of which is individually significant.

(7) RESTRUCTURING COSTS

Restructuring expense reflects costs associated with the Company’s ongoing efforts to improve operational efficiency and deploy assets globally in order to remain competitive on a worldwide basis. The Company expects fiscal 2026 restructuring expense and related costs to be approximately $100, including costs to complete actions initiated in the first three months of the year.

Restructuring expense by business segment follows:


	Three Months Ended December 31,
		2024		2025

Control Systems & Software		$	2	1
Test & Measurement		(1)		—
Software & Systems		1		1

Sensors		1		5
Final Control		7		2
Intelligent Devices		8		7

Safety & Productivity		1		1

Corporate		1		—

Total		$	11	9

Details of the change in the liability for restructuring costs during the three months ended December 31, 2025 follow:


	Sept 30, 2025			Expense		Utilized/Paid		Dec 31, 2025

Severance and benefits		$	116		4		25		95




Other		4			5		6		3
Total		$	120		9		31		98

The tables above do not include $2 and $2 of costs related to restructuring actions incurred for the three months ended December 31, 2025 and 2024, respectively.

SEC Form 10-Q filed by Emerson Electric Company