• Revenue: Underlying sales grew 6% in 2024.

• Adjusted EPS: $5.49, at the high end of August guidance.

• Free Cash Flow: $2.9 billion, exceeding guidance.

• Adjusted Segment EBITDA Margin: 26%, up 100 basis points from the prior year.

• Gross Margin: 50.8% for 2024, a record for Emerson.

• Test & Measurement Sales: $1.46 billion, down 12% for the year.

• Backlog: $7.2 billion at year-end.

• Share Repurchase: Approximately $435 million executed above August guidance.

• 2025 Guidance - Underlying Sales Growth: Expected to grow 3% to 5%.

• 2025 Guidance - Adjusted EPS: Expected between $5.85 and $6.05.

• 2025 Guidance - Free Cash Flow: Expected to be $3.2 billion to $3.3 billion.

• 2025 Share Repurchase Plan: Approximately $2 billion, with $1 billion in the first quarter.

• Warning! GuruFocus has detected 7 Warning Sign with EMR.

Release Date: November 05, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Emerson Electric Co (NYSE:EMR) announced a proposal to acquire the remaining shares of AspenTech, which is expected to unlock significant value creation potential for shareholders, employees, and customers.

• The company plans to repurchase approximately $2 billion of common stock in fiscal 2025, demonstrating a strong commitment to returning capital to shareholders.

• Emerson Electric Co (NYSE:EMR) delivered strong financial performance in 2024, with adjusted EPS at the high end of guidance and free cash flow exceeding expectations.

• The company has a robust project funnel, with strong activity in LNG, life sciences, and sustainability, indicating continued growth opportunities.

• Emerson Electric Co (NYSE:EMR) achieved record gross margins of 50.8% in 2024, reflecting the success of its portfolio transformation and operational efficiency.

Negative Points

• The Safety and Productivity business, which represents 8% of 2024 revenue, is being reviewed for strategic alternatives, indicating it does not align with the company's automation focus.

• Discrete Automation orders were down mid-single digits for the year, although they turned positive in Q4, highlighting challenges in this segment.

• The company is cautious about the recovery in China, particularly in the discrete and chemical markets, which could impact growth expectations.

• Test & Measurement orders were down 7% in the quarter, although there is optimism for recovery in 2025, indicating current challenges in this business.

• The proposed acquisition of AspenTech involves complexities, including regulatory obligations and the need for a special committee agreement, which could delay the transaction.