Investment Thesis
Emerson Electric exhibits severe data integrity issues with a 219% gross margin that is mathematically impossible, suggesting widespread financial reporting errors or data compilation failures. The combination of concerning liquidity metrics (0.84x current ratio, 0.62x quick ratio), weak return metrics (3.0% ROE, 1.4% ROA), and modest revenue growth of 3.0% YoY raises fundamental questions about operational efficiency and financial health that cannot be reliably assessed given the data quality problems.
EMR Strengths
- Positive free cash flow generation of $602M with 13.9% FCF margin demonstrates underlying cash generation capability
- Manageable leverage with 0.37x debt-to-equity ratio and adequate interest coverage of 5.3x
- Operating margin of 17.8% on reported basis shows reasonable operational efficiency despite data anomalies
EMR Risks
- Critical data integrity issue: 219% gross margin is mathematically impossible (gross profit exceeds revenue), indicating fundamental reporting errors
- Severely deficient liquidity with current ratio of 0.84x and quick ratio of 0.62x both below 1.0x, suggesting near-term cash management concerns
- Weak capital efficiency evidenced by ROE of 3.0% and ROA of 1.4%, indicating poor returns on shareholder capital and assets despite significant asset base of $41.9B
Key Metrics to Watch
- Gross margin recalculation and verification of revenue vs. cost of goods sold breakdown
- Current ratio trend and working capital management to address liquidity concerns
- Return on equity improvement and capital allocation decisions
EMR Financial Metrics
EMR Profitability Ratios
EMR Balance Sheet & Liquidity
EMR 5-Year Financial Trend
5-Year Trend Summary: EMERSON ELECTRIC CO's revenue has remained relatively flat over the 5-year period, with a 2% decline. The most recent EPS of $22.88 reflects profitable operations.
EMR Growth Metrics (YoY)
EMR Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $4.2B | $585.0M | $1.02 |
| Q3 2025 | $4.4B | $329.0M | $0.57 |
| Q2 2025 | $4.4B | $485.0M | $0.86 |
| Q1 2025 | $4.1B | $142.0M | $0.25 |
| Q3 2024 | $3.9B | $329.0M | $0.57 |
| Q2 2024 | $3.8B | $501.0M | $0.87 |
| Q1 2024 | $3.4B | $142.0M | $0.25 |
| Q3 2023 | $3.5B | $921.0M | $1.54 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
EMR Capital Allocation
EMR SEC Filings
Access official SEC EDGAR filings for EMERSON ELECTRIC CO (CIK: 0000032604)