It has been about a month since the last earnings report for Emerson Electric (EMR Quick QuoteEMR - Free Report) . Shares have added about 5.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Emerson Electric due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Emerson Q4 Earnings Beat, Intelligent Devices Sales Rise Y/Y

Emerson reported fourth-quarter fiscal 2024 (ended Sept. 30, 2024) adjusted earnings of $1.48 per share, which beat the Zacks Consensus Estimate of $1.47. The bottom line increased 15% year over year.

Emerson’s net sales of $4.62 billion beat the consensus estimate of $4.57 billion. The top line increased 13% year over year, driven by solid performance of the Intelligent Devices segment. The underlying sales were up 4% year over year.

Segmental Details

Effective from the first quarter of fiscal 2023, the company started reporting under two segments, namely Intelligent Devices and Software and Control Automation Solutions.

The Intelligent Devices segments’ net sales were $3.28 billion, up 4% year over year. The segment’s sales increased 5% year over year to $12.2 billion in fiscal 2024. The segment consists of four subgroups, namely Final Control, Measurement & Analytical, Discrete Automation and Safety & Productivity.

Final Control’s sales increased 8% year over year to $1.2 billion. Measurement & Analytical generated sales of $1.1 billion, up 7% year over year. Discrete Automation’s sales totaled $643 million, reflecting a decline of 3% on a year-over-year basis. Safety & Productivity’s sales decreased 1% year over year to $352 million.

The Software and Control Automation Solutions segment generated net sales of $1.4 billion, up 41% year over year. Our estimate was $1.4 billion. The segment consists of three subgroups, namely Control Systems & Software, AspenTech and Test & Measurement.

Control Systems & Software reported sales of $780 million, reflecting an increase of 9% year over year. AspenTech generated net sales of $215 million, down 13% year over year. Test & Measurement sales were $360 million.

Margin Details

The cost of sales increased 8.2% year over year to $2.2 billion. The pretax earnings margin was 14.7% compared with 24.9% in the year-ago period. Adjusted EBITA margin was 24.6% compared with 24.2% in the year-earlier quarter. Selling, general and administrative expenses increased 18% year over year to $1.3 billion.

Balance Sheet & Cash Flow

Exiting the fiscal fourth quarter, Emerson had cash and cash equivalents of $3.6 billion compared with $8.1 billion at the end of fiscal 2023 (ended September 2023). Long-term debt was $7.2 billion compared with $7.6 billion at the end of fiscal 2023. In fiscal 2024, the company made a payment of long-term debt worth $547 million.

In the same period, the company generated net cash of $3.3 billion from operating activities, up 423% year over year. Capital expenditure was $419 million, up from $363 million in the year-ago period. Emerson paid out dividends of $1.2 billion in the same period.

Q1 Fiscal 2025 Outlook

For the first quarter of fiscal 2025 (ending December 2025), Emerson anticipates year-over-year net sales growth to be in the band of 2.5-3.5% and underlying sales growth to be in the range of 2-3%.

Emerson anticipates earnings per share to be in the range of 89-94 cents. Adjusted earnings per share are anticipated to be in the band of $1.25-$1.30. The Zacks Consensus Estimate of earnings is $1.28 per share.

FY25 Outlook

Emerson anticipates net sales growth of 3.5-5.5% from the year-earlier level. Underlying sales are expected to rise in the range of 3-5%.

Emerson projects earnings per share to be in the range of $4.42-$4.62. Adjusted earnings per share are estimated to be in the range of $5.85-$6.05. The company expects operating cash flow to be in the band of $3.6-$3.7 billion. Free cash flow is estimated to be in the range of $3.2-$3.3 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

At this time, Emerson Electric has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Emerson Electric has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Emerson Electric belongs to the Zacks Manufacturing - Electronics industry. Another stock from the same industry, Eaton (ETN Quick QuoteETN - Free Report) , has gained 5.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.

Eaton reported revenues of $6.35 billion in the last reported quarter, representing a year-over-year change of +7.9%. EPS of $2.84 for the same period compares with $2.47 a year ago.

Eaton is expected to post earnings of $2.82 per share for the current quarter, representing a year-over-year change of +10.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.2%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Eaton. Also, the stock has a VGM Score of C.