Emerson Electric Company (EMR) Q3 2026 Earnings Report

The call reported broad-based growth, strong cash generation, margin expansion, raised guidance, and notable wins in key growth verticals (semiconductor, power, Test & Measurement and software). These positives were tempered by regional softness in China and Europe, ongoing Middle East conflict-related disruptions (modeled as a meaningful but manageable headwind), a software renewal dynamic that weighed on margins, and continued tariff/inflation noise. On balance the upbeat operational and financial results, raised guidance, and strong cash returns to shareholders outweigh the headwinds.

Emerson raised 2026 guidance, now targeting 5% GAAP sales growth (3.5% underlying), adjusted segment EBITDA margin of ~28% (28.5% expected in Q4) and adjusted EPS of about $6.55, with free cash flow of ~$3.6 billion and ~$2.2 billion of shareholder returns planned (≈$1.2B dividends, $1.0B buybacks; $898M repurchased through Q3). For Q4 management expects ~5% sales growth (minimal FX) and adjusted EPS ≈ $1.85; by segment they now see Software & Systems ≈ +6% FY and ≈ +10% Q4 (Test & Measurement raised to ~14% FY, Control Systems & Software ~3.5% FY including ~3 points renewal headwind), Intelligent Devices ~2% FY (3% Q4) and Safety & Productivity ~2% FY (1% Q4). Other key metrics: ACV up 9% to $1.68B (ACV growth target 10%+), Q3 underlying orders +7%, Q3 underlying sales +6%, backlog $8.2B with book‑to‑bill 1.0, and management is modeling roughly a $100M FY impact from the Middle East conflict (Q3 ≈ $25M headwind).