Semiconductor orders surged 70% in test and measurement.
Emerson delivered a strong Q3 with 6% sales growth and an EPS beat, and raised its full-year guidance driven by a robust US market and booming power and semiconductor verticals. Power generation (Ovation orders up 31%) and semiconductor test (orders up 53%) are the most prominent growth vectors, with demand extending into 2028.
Buzzberg readSemiconductor orders surged 70% in test and measurement.Emerson delivered a strong Q3 with 6% sales growth and an EPS beat, and raised its full-year guidance driven by a robust US market and booming power and semiconductor verticals. Power generation (Ovation orders up 31%) and semiconductor test (orders up 53%) are the most prominent growth vectors, with demand extending into 2028.Read full analysisCollapse analysis
Emerson delivered a strong Q3 with 6% sales growth and an EPS beat, and raised its full-year guidance driven by a robust US market and booming power and semiconductor verticals. Power generation (Ovation orders up 31%) and semiconductor test (orders up 53%) are the most prominent growth vectors, with demand extending into 2028.
Growth in the US is strong (up 10%), while China is still down 3% but stabilizing and Europe is roughly flat.
Middle East conflict continues to drag on revenue (~$25M/quarter headwind), but management is prepared for a rapid rebound if a US-Iran deal stabilizes the region.
Underlying orders grew 7% in the quarter.
Revenue$4.873B
+7% QoQ
EPS$1.71
+11% QoQ
Gross margin54.48%
reported
Op margin20.54%
reported
What changed this quarter
01
Demand
Semiconductor orders surged 70% in test and measurement.
Management expressed confidence in strong demand secular trends, raised guidance, and highlighted robust order growth and project funnel expansion.
02
Demand
Power generation orders up 31% in Ovation business.
Semiconductor orders surged 70% in test and measurement.. Management expressed confidence in strong demand secular trends, raised guidance, and highlighted robust order growth and project funnel expansion.
03
Capex
Project funnel grew to $12.4 billion, up 8% year over year.
Management highlighted significant investment in power generation, including both utility and behind-the-meter projects driven by data centers, with the project funnel for power growing to $3 billion. They noted the power generation build-out is accelerating, and they are…
04
Guidance
Middle East headwind expected to persist into fourth quarter.
Guidance · revenue to 3.5%
AI, capex & demand read
AI
Platform & monetization
Management highlighted AI as a key driver, citing the appointment of a Chief Technology and AI Officer to lead AI-enabled automation and help customers achieve autonomous operations. They also mentioned winning NI semiconductor test systems for a leading manufacturer to help capture AI market opportunities.
Demand
Bookings & conversion
Semiconductor orders surged 70% in test and measurement.. Management expressed confidence in strong demand secular trends, raised guidance, and highlighted robust order growth and project funnel expansion.
Capex
Investment and capacity
Management highlighted significant investment in power generation, including both utility and behind-the-meter projects driven by data centers, with the project funnel for power growing to $3 billion. They noted the power generation build-out is accelerating, and they are seeing greenfield opportunities coming online.
Tone · Confident
Management expressed confidence in strong demand secular trends, raised guidance, and highlighted robust order growth and project funnel expansion.
Supply-chain alpha
A1
Emerson's Ovation orders (power generation control systems) are up 31%, booked well into 2028, including both fleet modernizations and new-built gas turbines for behind-the-meter data center power.
The Middle East conflict (Strait of Hormuz closure) is causing a $25M quarterly revenue headwind, preventing the company from shipping goods to the region. However, management indicates orders could rebound rapidly once a US-Iran agreement is reached.
“The long-term capital outlook is robust, and we remain confident in the growth potential of the Middle East.”
Emerson's Ovation orders (power generation control systems) are up 31%, booked well into 2028, including both fleet modernizations and new-built gas turbines for behind-the-meter data center power. — Power generation capex cycle is at an upswing, with turbomachinery suppliers likely seeing off-take commitments benefit them as well.
Hey, good afternoon, guys. Hello. The ovation order is, I think you said, up 31%. I think you said, Mike, up 31%. But what kind of lead times are you looking at now? Are you taking orders well into, I would imagine, well into maybe even the back half of 2017?
Semiconductor test demand is surging for production/validation in RF and mixed-signal chips, up 70% in orders, from AI-driven applications. — Indicates that AI compute expansion is driving high-volume needs in chip test, not just design, which supports continued fab utilization and equipment demand.
… this fiscal year. Please turn to slide five. Underlying orders grew 7% in the third quarter, with broad-based demand across the portfolio as customers are investing in automation to enhance productivity, reliability, and resilience in their operations. North America and Asia drove the growth, led by the continued strength in the US, India, Japan, and Southeast Asia. Demand in Europe and China remained soft, but showed signs of improvement in the quarter. Test and measurement orders growth of 19% exceeded expectations with semiconductor up 70% and double digit growth in aerospace and defense and the portfolio business. We are seeing a continuation of the unprecedented investment in power generation. with orders in our ovation business up 31%. Electrification is also driving exceptional activity in grid modernization and ACV in Aspen Tech's digital grid management suite was up 28%. Our project funnel grew $1.2 billion to $12.4 billion, up 8% year over year. Secular Tailwinds are supportive of sustained capital activity in our growth verticals, which were up $1 billion sequentially. Power was up $450 million from the second quarter and now accounts for $3 billion of the …
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