Emerson Electric
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Emerson Electric (EMR) investor relations material

Emerson Electric Q1 2026 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q1 2026 earnings summary3 Feb, 2026

Executive summary

  • Q1 2026 net sales grew 4% year-over-year to $4.3 billion, with underlying orders up 9% and strong demand in North America, India, and the Middle East & Africa, especially in automation and Software & Systems.

  • Adjusted segment EBITA margin reached 27.7%, and adjusted EPS rose 6% to $1.46, despite a $0.06 headwind from software contract renewals.

  • Backlog ended at $7.9 billion, up 9% year-over-year; book-to-bill ratio was 1.13.

  • Annual Contract Value (ACV) of software grew 9% year-over-year to $1.6 billion.

  • Declared a quarterly dividend of $0.555 per share, payable March 10, 2026.

Financial highlights

  • Free cash flow for Q1 2026 was $602 million, with a margin of 13.9%.

  • Gross profit increased 3% to $2.31 billion; gross margin was 53.2%.

  • Price contributed 3 points to growth; MRO represented 65% of sales.

  • Software & Systems margin was 31.3%; Intelligent Devices margin was 26.9%; Safety & Productivity margin was 20.9%.

  • Operating cash flow for Q1 2026 was $699 million, down from $777 million a year ago.

Outlook and guidance

  • Full-year 2026 net sales growth expected at ~5.5%, with underlying sales up ~4% and a 1.5% favorable FX impact.

  • Adjusted segment EBITA margin guidance is ~28%.

  • Adjusted EPS guidance raised to $6.40–$6.55.

  • Free cash flow for 2026 expected at $3.5B–$3.6B, with a margin above 18%.

  • Plans to return ~$2.2B to shareholders via ~$1B share repurchases and ~$1.2B dividends.

Explain Q1 short-term debt increase
Address Control Systems & Software margin decline
Reconcile Q1 FCF decline with FY26 outlook
Assess Venezuela market opportunity
How does AI accelerate software ACV growth?
Intelligent Devices margin decline drivers?
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Frequently asked questions

Manufacturing Giant

Emerson Electric is an American manufacturing company with global operations that provides a wide range of products and services in the industrial, commercial, and consumer markets. It operates in two main business segments: Automation Solutions, which caters to industrial processes and includes measurement instrumentation, valves, and process control systems; and Commercial & Residential Solutions, which provides a variety of products and services for heating, air conditioning, and refrigeration. The company is headquartered in Ferguson, Missouri, and is listed on the NYSE.

Evolving With the Times

Emerson Electric was established in 1890 in St. Louis, Missouri, by Civil War Union veteran John Wesley Emerson. Initially, the company was involved in the production of electric motors and fans, capitalizing on the burgeoning electrical age. During the mid-20th century, Emerson started diversifying its portfolio through acquisitions, expanding into a broader range of products and services, including tools, electrical components, and engineering services. This strategic expansion continued into the latter part of the century and the new millennium, as Emerson shifted focus towards process control systems and software, and climate technologies. A list of companies among Emerson Electric’s competitors includes Honeywell, Schneider Electric, and ABB, to name a few.

Automation Solutions

Within its Automation Solutions business arm, Emerson Electric specializes in providing advanced technologies and services designed to automate industrial processes. This division delivers a broad array of products, including measurement and analytical instrumentation, valves, actuators, regulators, and control and safety systems. Automation Solutions also encompasses a suite of related software and services for process optimization, asset management, and consulting, catering to sectors such as oil and gas, chemicals, power generation, life sciences, and food and beverage.

Commercial & Residential Solutions

The Commercial & Residential Solutions segment of Emerson Electric focuses on providing a wide range of products and services that cater to the comfort, safety, and efficiency needs of both commercial and residential environments. This division manufactures climate technologies, including heating, ventilation, air conditioning, and refrigeration solutions. Additionally, it supplies tools, home products, and appliance solutions that support contractors and residents in the maintenance, repair, and management of their spaces.

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