A maker of automation equipment and software that helps factories, power plants, and chemical plants run on their own, with brands like DeltaV and Ovation controlling complex industrial processes around the world. It grew out of a St. Louis workshop founded in 1890 by John Wesley Emerson, a Civil War veteran and judge who backed two brothers' patents for improved electric motors. Fittingly, the "Emerson" behind the name never ran the company—he was the silent financial backer who sold his stake within two years.
Q3 FY2026 revenue rose 7% to $4.9B with gross margin up 1.9pt on tariff refunds
Tariff refunds lifted Emerson's Q3 margin after two quarters of slippage. rose 7% to $4.9B and expanded 1.9 points to 54.5% as $82M in IEEPA tariff refunds cut cost of sales, while rose 24.8% to $916M. The company is back on its full-year sales track with debt little changed at $7.5B.
Key takeaways
expanded 1.9 points to 54.5% primarily because $82M in IEEPA tariff refunds were recorded in cost of sales, reversing the prior two quarters' declines of 0.4 points each.
rose 7% to $4.9B with up 6% on 3% higher volume and 3% higher price, the fastest quarterly growth since Q3 FY2025's 3.9%.
Software & Systems led with 11% sales growth driven by demand in power, semiconductor, and aerospace & defense; sales rose 6% on power and LNG strength.
Section summaries
Management's Discussion and Analysis
Q3 FY2026 net sales rose 7% to $4.9B; adjusted EPS grew 13% to $1.71, aided by IEEPA tariff refunds and operating leverage.
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Consolidated increased 7% to $4.9B, with up 6% on 3% higher volume and 3% higher price.
rose 24.8% to $916M and rose 22.5% to $718M , with up 23.1% to $1.28.
from continuing operations was $2.9B for the first nine months, up $238M , funding $898M in repurchases and $935M in dividends.
sales grew 3% but earnings declined on higher , and the full-year outlook was trimmed to ~5% growth and adjusted of ~$6.55.
What changed
The sale from the strategic review remains unresolved; Q2 FY2026 flagged resolution and timing as a watch item and this filing shows the segment still held with earnings down on restructuring.
reduction toward the ~$1B target shows little progress: was $7.526B at Q3 FY2026 versus $7.555B at Q2 and $8.319B at FY2025, a 9.1% drop from a year ago but still far above target.
Tariff impact shifted from pressure to benefit: Q1 and Q2 FY2026 saw margins diluted ~0.9 and ~0.8 points by tariffs, but Q3 recorded $82M in IEEPA tariff refunds that expanded margin 1.9 points.
Q3 of 7% beat the trimmed ~4.5% full-year guide trajectory after Q1 (4.1%) and Q2 (2.9%) came in below the original ~5.5% FY2026 plan.
The FY2025 risk on U.S. trade tariffs carried into this 10-Q with no new disclosure, and the item notes no significant change in market risk exposure versus the prior annual report.
What to watch
Resolution and timing of the sale from the ongoing strategic review.
Q4 FY2026 growth against the ~5% full-year net sales guide after Q3 came in at 7%.
Whether IEEPA tariff refunds recur or reverse in Q4 after the $82M Q3 benefit to .
reduction progress from $7.526B toward the ~$1B target as €500M notes were repaid in Q1.
expanded 1.9 pts to 54.5%, primarily due to $82M in IEEPA tariff refunds recorded in cost of sales.
Software & Systems led with 11% sales growth, driven by strong demand in power, semiconductor, and aerospace & defense.
sales rose 6% on strength in power and LNG, while grew 3% but saw earnings decline on higher restructuring costs.
from continuing operations was $2.9B for the first nine months, up $238M , supporting $898M in share repurchases and $935M in dividends.
Fiscal 2026 outlook calls for ~5% growth and adjusted of ~$6.55, with of ~$3.6B.
Quantitative and Qualitative Disclosures About Market Risk
There has been no significant change in our exposure to market risk during the three and nine months ended June 30, 2026. For a discussion of our exposure to market risk, refer to Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," contained in our Annual Repo…
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There has been no significant change in our exposure to market risk during the three and nine months ended June 30, 2026. For a discussion of our exposure to market risk, refer to Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025.