Emerson Electric (EMR) Q4 2024 earnings summary

Executive summary

• Announced proposal to acquire remaining AspenTech shares for $240/share in cash, aiming to fully integrate AspenTech and accelerate software-defined automation strategy.

• Achieved strong operational performance in FY2024, with sales of $17.5B and adjusted segment EBITA margin of 26.0%.

• Fiscal 2024 saw record adjusted EPS of $5.49, strong cash generation, and significant progress on portfolio transformation and Test & Measurement integration.

• Initiated review of strategic alternatives, including a potential cash sale, for the Safety & Productivity business, which represents 8% of 2024 revenue.

• Strategic actions announced mark the final phase of transformation into an industrial technology leader focused on advanced automation solutions.

Financial highlights

• FY2024 underlying sales grew 6% year-over-year to $17.49B; adjusted EPS reached $5.49, up 24% from 2023.

• Free cash flow was $2.9B, up 23% year-over-year, with a margin of 16.6%.

• Adjusted segment EBITA margin was 26.0% for FY24 and 26.2% in Q4.

• Test & Measurement contributed $0.45 to EPS, AspenTech $0.35.

• Gross margin reached a record 50.8%, up nearly 1,000 bps from 2021.

Outlook and guidance

• FY2025 underlying sales expected to grow 3%-5%; adjusted EPS guidance is $5.85-$6.05.

• Free cash flow projected at $3.2B-$3.3B; $2B share repurchase and $1.2B dividend planned for 2025.

• Q1 FY25 net sales growth expected at 2.5%-3.5%, adjusted EPS $1.25–$1.30.

• Process and hybrid markets expected to grow mid-single digits; discrete markets to recover in second half.

• China expected to return to growth in H2 2025; North America and Europe to see low to mid-single digit growth.