Engineering and automation solutions company Emerson (NYSE: EMR) met Wall Streets revenue expectations in Q4 CY2025, with sales up 4.1% year on year to $4.35 billion. Its non-GAAP profit of $1.46 per share was 3.4% above analysts’ consensus estimates.

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Company Overview

Founded in 1890, Emerson Electric (NYSE: EMR) is a multinational technology and engineering company providing solutions in the industrial, commercial, and residential markets.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Emerson Electric grew its sales at a sluggish 1.6% compounded annual growth rate. This was below our standards and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Emerson Electric’s annualized revenue growth of 6.9% over the last two years is above its five-year trend, but we were still disappointed by the results.

This quarter, Emerson Electric grew its revenue by 4.1% year on year, and its $4.35 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 5.4% over the next 12 months, similar to its two-year rate. This projection is underwhelming and indicates its products and services will see some demand headwinds.

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Operating Margin

Emerson Electric has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 18.7%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Looking at the trend in its profitability, Emerson Electric’s operating margin rose by 4.2 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Emerson Electric generated an operating margin profit margin of 24.6%, up 5.2 percentage points year on year. The increase was solid, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Emerson Electric’s EPS grew at a solid 10.9% compounded annual growth rate over the last five years, higher than its 1.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Emerson Electric’s earnings to better understand the drivers of its performance. As we mentioned earlier, Emerson Electric’s operating margin expanded by 4.2 percentage points over the last five years. On top of that, its share count shrank by 6.3%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Emerson Electric, its two-year annual EPS growth of 11.5% is similar to its five-year trend, implying strong and stable earnings power.

In Q4, Emerson Electric reported adjusted EPS of $1.46, up from $1.38 in the same quarter last year. This print beat analysts’ estimates by 3.4%. Over the next 12 months, Wall Street expects Emerson Electric’s full-year EPS of $6.08 to grow 9%.

Key Takeaways from Emerson Electric’s Q4 Results

Despite in-line revenue, it was good to see Emerson Electric beat analysts’ EPS expectations this quarter. On the other hand, its EPS guidance for next quarter fell short of Wall Street’s estimates. Overall, this was a mixed quarter. The stock traded up 3.6% to $157.53 immediately following the results.

So do we think Emerson Electric is an attractive buy at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).