Emerson Electric Co (EMR) Q2 2024 Earnings Report

Emerson QQ2 2024 - Selected Metrics and Context:
- Revenue: $4.376B (GAAP) with reported YoY growth around 16.5% and QoQ 6.3% in the provided dataset; management emphasized 8% underlying sales growth in the quarter driven by process and hybrid markets.
- Gross margin: 52.2% in Q2 per earnings commentary (management cited a 430 bps improvement vs prior year); however, the dataset also contains a negative gross margin figure (-22.6%). Note: there is an apparent inconsistency between the GAAP gross margin reported in the call vs the data file; management commentary supports a historically improving gross margin trajectory toward >50% through the portfolio transformation.
- Operating income / margin: GAAP operating income shows a substantial negative figure in the data file; management commentary indicates meaningful operating leverage, with 54% leverage and robust EBITDA expansion (adjusted EBITDA margin 26%).
- EBITDA / Margin: Adjusted segment EBITDA margin improved by 140 bps to 26%; overall EBITDA reported as $1.166B in the data set; management framed EBITDA growth and margin expansion as driven by volume leverage, favorable mix, and productivity actions.
- Net income / margin: Net income of $501M with net margin around 11.4% in the provided data; management highlighted EPS growth and a 25% YoY increase in adjusted EPS to $1.36 (GAAP EPS reported as lower in the dataset; the call cites adjusted EPS of $1.36).
- EPS (GAAP vs. adjusted): GAAP EPS around $0.87–$0.88; Adjusted EPS $1.36 for Q2; YoY and sequential growth supported by margin expansion and mix.
- Free cash flow / cash flow: Free cash flow $661M in the quarter; operating cash flow $743M; cash balance at period end $2.318B; management guided to approx. $2.7B FCF for the full year.
- Backlog / orders: Backlog essentially flat at about $7.55B; book-to-bill >1 in H1 with continued funnel growth, including power-related content and offshore vessel awards.
- Leverage / balance sheet: Total debt and net debt elevated (net debt around $9.12B in the data); interest coverage negative in the dataset, though the earnings call asserts healthy profitability metrics; note that leverage dynamics should be assessed with the adjusted EBITDA framework and ongoing synergy realization.
- Dividend / payout: Payout ratio around 59.9% in the data; ongoing shareholder returns expected to be supported by FCF generation.
- Growth drivers: Process and hybrid markets, energy transition, decarbonization, and grid modernization; AspenTech and Ovation/DGM software synergies provide structural margin and cash flow uplift.