Emerson recasts two years of results for mark-to-market pension accounting

Emerson Electric Co. said on October 13, 2026 that it has elected mark-to-market accounting for its defined benefit pension and other postretirement benefit plans, meaning that "actuarial gains and losses will be recognized in earnings in the period in which they arise". The change, effective for the fiscal year ended September 30, 2026, came with recast historical results: nine-month net earnings common stockholders moved to $1.95 billion from $1.94 billion as previously reported, third-quarter diluted earnings per common share stayed at $1.28, and the company expects a pretax gain of less than $5 in the fourth quarter.

A $2 lift in the third quarter and $6 over nine months

The recast exhibit, whose dollar amounts are stated in millions, shows third-quarter net sales of $4,873, unchanged from the figure Emerson previously reported, and net earnings common stockholders of $720 against $718 as previously reported. Diluted earnings per common share stayed at $1.28, and adjusted earnings per common share stayed at $1.71. Adjusted EBITA was $1,305, or 26.8% of sales, against $1,186, or 26.1% of sales, in the third quarter of fiscal 2025.

For the nine months ended June 30, 2026, net earnings common stockholders moved to $1,947 from $1,941 as previously reported, diluted earnings per common share to $3.46 from $3.45, and adjusted earnings per common share to $4.72 from $4.71. The earlier quarters were smaller: first-quarter diluted earnings per share shifted to $1.08 from $1.07, while the second quarter was unchanged at $1.10. The recast also reprints items excluded from adjusted results, including $99 of restructuring and related costs and an $82 item labelled IEEPA tariff refunds that lifted third-quarter reported diluted earnings per share by $0.11 and was excluded from adjusted results.

A fourth-quarter mark-to-market gain expected at less than $5

Emerson said the annual mark-to-market adjustment will be recognized in the fourth quarter, using the plans' September 30 annual measurement date, and will principally reflect changes in discount rates, returns on plan assets and other actuarial assumptions. The company expects to record a pretax gain of less than $5 in the fourth quarter of fiscal 2026 on its current assumptions, and it cautioned that actual results could differ from those preliminary estimates.

The adjustment will be reported in Emerson's consolidated results but, in the filing's words, "will not be allocated to its reportable segments", and the company said the change will have no effect on total cash flows, the funded status of the plans, funding requirements or benefits payable to plan participants. Because the adjustment moves with market conditions and actuarial assumptions, Emerson will exclude the annual mark-to-market adjustment from adjusted earnings per share.

Recast, not restated, with the published outlook untouched

Emerson applied the change retrospectively, recasting the years ended September 30, 2024 and 2025 as well as the first three quarters of fiscal 2026. Full-year fiscal 2025 net sales were $18,016, net earnings common stockholders $2,270 against $2,293 as previously reported, and diluted earnings per common share $4.00 against $4.04. The largest single-period effect fell in the fourth quarter of fiscal 2025, when diluted earnings per common share dropped to $1.07 from $1.12; fiscal 2024 adjusted earnings per common share came out at $5.35 against $5.49 as previously reported.

The filing states that the recast information "does not represent a restatement of previously issued financial statements", and that the nine-month benefit was not reflected in the fiscal 2026 outlook Emerson had already published; the filing is not intended to reaffirm or update that outlook. That distinction matters because this is an accounting-change document rather than a quarterly earnings report: it carries recast financial statements and the disclosure itself, with no management commentary, no fresh guidance and no market reaction. The filing itself carries Item 2.02 on results of operations and Item 9.01 on financial statements and exhibits. The next dated checkpoint is Emerson's report on the fourth quarter and fiscal year ended September 30, 2026, which will carry the first annual mark-to-market adjustment.