EMR · Q1 2026 Earnings

Neutral

Emerson Electric

Reported February 3, 2026

30-second summary

Emerson printed Q1 FY2026 revenue of $4.35B (+4% YoY) and adjusted EPS of $1.46 — $0.06 above the ~$1.40 guide — with adj. segment EBITA margin of 27.7% (+70bps above ~27% guide, but -30bps YoY) and underlying orders +9%. FY2026 net sales growth (~5.5%) and underlying sales growth (~4%) were reaffirmed, and adj. EPS was raised at the low end to $6.40–$6.55 (mid +$0.025). Q2 is guided to 3–4% net / 1–2% underlying, implying a soft near-term print with a back-half ramp to hold the FY. The notable disclosure changes: the ~28% segment EBITDA margin target and the 10%+ ACV growth commitment are no longer in the press-release guide framework, while the ~$1.0B buyback was reaffirmed.

Headline numbers

EPS

Q1 FY2026

$1.46

Revenue

Q1 FY2026

$4.35B

+4.0% YoY

Gross margin

Q1 FY2026

53.2%

Free cash flow

Q1 FY2026

$0.60B

Operating margin

Q1 FY2026

17.8%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$4.35B	+4.0%	$4.86B	-10.5%
EPS	$1.46	—	$1.62	-9.9%
Gross margin	53.2%	—	—	—
Operating margin	17.8%	—	16.4%	+140bps
Free cash flow	$0.60B	—	$0.84B	-28.6%

Guidance

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Adjusted EPS	Q1 FY2026	~$1.40	$1.46	+$0.06 above guide	Beat
Net Sales Growth	Q1 FY2026	~4%	4%	in-line	Met
Underlying Sales Growth	Q1 FY2026	~2%	2%	in-line	Met
Adjusted Segment EBITDA Margin	Q1 FY2026	~27%	27.7%	+0.7pts above guide	Beat

New guidance

Metric	Period	Guide	YoY
Adjusted EPS	Q2 FY2026	$1.50 - $1.55	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EPS	FY2026	$6.35 - $6.55	$6.40 - $6.55	+$0.05 at low end	Raised
Net Sales Growth	FY2026	~5.5%	3% - 4%	-1.5 to -2.5pts	Lowered
Underlying Sales Growth	FY2026	~4%	1% - 2%	-2 to -3pts	Lowered
Adjusted Segment EBITDA Margin	FY2026	~28%	Withdrawn — no replacement	—	Withdrawn
Share Repurchase	FY2026	~$1.0B	Withdrawn — no replacement	—	Withdrawn
ACV Growth	FY2026	10% plus	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: Operating Cash Flow ($4.0B - $4.1B), Free Cash Flow ($3.5B - $3.6B)

Segment KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
Software & Systems	$1.453B	+5.0%
Intelligent Devices	$2.39B	+4.0%
Safety & Productivity	$0.503B	+3.0%
Control Systems & Software	$1.044B	+2.0%
Test & Measurement	$0.409B	+14.0%
Sensors	$0.996B	+2.0%
Final Control	$1.394B	+4.0%

Other KPIs

Q1 FY2026

Segment	Q1 FY2026
Underlying Orders Growth	9%
Underlying Sales Growth	2%
Adjusted Segment EBITA Margin	27.7%
Operating Cash Flow	$699M

Management tone

Transcript not available this quarter; tone analysis is anchored on the prepared-remarks excerpts disclosed in the press release.

The press-release anchor: "We delivered a fourth consecutive quarter of strong underlying orders growth, and we are experiencing robust demand for our automation technology, led by Software & Systems, with strength in North America, India and the Middle East & Africa." Management also flagged that capital allocation is pivoting toward returning cash to shareholders, with ~$2.2B planned via ~$1.0B repurchases and ~$1.2B dividends in 2026. That framing reaffirms the capital-return posture from last quarter rather than retracting it.

Two disclosures from last quarter's framework are absent from this quarter's press-release guide table: the ~28% FY2026 segment EBITDA margin target and the 10%+ ACV growth commitment. Both were transcript-sourced last quarter rather than press-release table items, so the absence may reflect format rather than a substantive change — the conference-call transcript (when available) will clarify whether either was reaffirmed verbally. As of the press release alone, those two FY metrics are no longer falsifiable from the disclosed framework.

The EPS raise at the low end ($6.35 to $6.40) against a reaffirmed top line implies modest confidence in margin/mix holding into the year, consistent with Q1's 27.7% segment margin beating the ~27% guide by 70bps (though down 30bps YoY).

Answers to last quarter's watch list

Q1 FY2026 underlying sales growth vs. ~+2% guide — Q1 underlying sales printed +2%, exactly in line. FY underlying guide reaffirmed at ~4%, with Q2 guided to 1–2% implying an H2 ramp. Status: Resolved positively at Q1 level

Adj. segment EBITDA margin path to FY2026 ~28% — Q1 adj. segment EBITA margin printed 27.7% (+70bps above ~27% guide, -30bps YoY). The ~28% FY target is no longer in the press-release guide framework; transcript will determine whether it was reaffirmed verbally. Status: Partial — strong Q1, FY target visibility reduced

Operating cash flow build toward $4.0–4.1B FY2026 — Q1 OCF printed $699M; FY reaffirmed at $4.0B–$4.1B. Q1 is ~17% of FY midpoint, implying a typical back-half ramp.

Continue monitoring

Test & measurement orders deceleration — T&M revenue printed +14% reported / +11% underlying in Q1, sustaining double-digit growth off the steep +27% Q4 orders comp. Specific Q1 orders growth not disclosed.

Resolved positively

Ovation backlog conversion — Ovation-specific order disclosure was not broken out in the press release. ACV growth metric is no longer in the press-release guide framework, removing one proxy disclosure.

Not resolved

Europe Q1 print — Europe printed +3% YoY in Q1, matching Q4's +3% rather than reverting to the flat/negative framing management implied for FY2026.

Resolved positively

Capital allocation execution — FY2026 ~$1.0B buyback reaffirmed; Q1 purchases of common stock were $250M per the cash flow statement, consistent with a ratable pace. Status: On track

What to watch into next quarter

Q2 FY2026 underlying sales growth vs. 1–2% guide — Q2 is guided flat-to-down vs Q1. A print at the high end with order momentum sustained would support the H2 ramp needed to hold the FY ~4% underlying. A miss would put the reaffirmed FY at risk.

Reinstatement (or continued silence) on FY2026 segment EBITDA margin and ACV growth — both were transcript-sourced last quarter and absent from this quarter's press-release framework. Watch the Q1 conference-call transcript and Q2 disclosure for whether either is reaffirmed.

Q2 orders growth cadence — Q1 underlying orders +9% is the strongest in the four-quarter run. Watch whether Q2 sustains mid-to-high single digits, which would underwrite the H2 sales ramp.

Test & measurement growth durability — Q1 +14% reported / +11% underlying answered the deceleration concern. Watch whether Q2 sustains low-double-digit growth as the orders comp continues to widen.

AMEA inflection — Q1 0% YoY is materially weaker than Q4's +2%; with management citing India and Middle East & Africa strength, the China / other Asia drag is the implied source. A negative AMEA print in Q2 would confirm Asia as a structural headwind.

Segment margin path — adj. segment EBITA margin -30bps YoY in Q1 despite beating the guide. Watch whether Q2 sustains above 27% to support the EPS confidence implied by the low-end raise.

Sources

Emerson Electric Q1 FY2026 earnings press release, SEC EDGAR (https://www.sec.gov/Archives/edgar/data/32604/000003260426000006/a2026q1release_ex991.htm)
Emerson Electric Q4 FY2025 brief (prior-quarter guidance baseline for FY2026 segment margin, ACV growth, buyback, and underlying sales growth comparisons)

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