Al Root

Tuesday, industrial-automation company Emerson Electric reported better-than-expected fiscal-fourth-quarter results while announcing several strategic actions.

The company has a lot going on. Investors, however, might be happiest with the business outlook.

Emerson announced earnings per share of $1.48 on sales of $4.6 billion for the fiscal quarter ended Sept. 30. Wall Street was looking for earnings per share of $1.47 on sales of $4.6 billion respectively, according to FactSet.

Earnings were in line with expectations. But this is Emerson's fiscal year end and it gave investors an early look into 2025. Things are shaping up nicely.

For the coming fiscal year, Emerson expects earnings per share of $5.85 to $6.05 on sales of $18.1 billion to $18.5 billion. Wall Street currently projects earnings per share of $5.91 on sales of $18.2 billion, respectively.

Underlying sales growth is expected to be about 4% in the coming year. That's a little slower than the 6% growth experienced in fiscal year 2024. Still, the midpoint of 2025 sales guidance is better than analysts expected.

Along with solid earnings and guidance, the company had several announcements for investors to digest. Emerson offered to buy all the stock in industrial software provider Aspen Technology it didn't own for $240 a share in cash. Emerson also announced plans to sell its safety and productivity business which makes tools for homeowners and construction professionals. Management also plans to buy back some $2 billion in shares in fiscal 2025.

Emerson owns about 55% of AspenTech stock. Aspen shares closed at $237.59 on Monday. Emerson bought about $1 billion in stock back in fiscal 2024.

Overall, investors look pleased. Emerson stock was up 5.6% in early trading Tuesday while S&P 500 and Dow Jones Industrial Average futures were up 0.2% and 0.1%, respectively.

Coming into Tuesday's trading, Emerson stock was up about 13% year to date.

Write to Al Root at allen.root@dowjones.com

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November 05, 2024 09:09 ET (14:09 GMT)

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