NI Acquisition Synergies and Margins
Q: Why accelerate NI synergies and impact on margins?
A: Emerson increased cost synergies from the NI acquisition by $20 million, accelerating the time frame from 5 years to 3 years. Despite higher synergies, the 31% margin target remains unchanged, as they may invest in growth opportunities. Management is confident in faster execution due to cultural similarities and effective integration.

Organic Order Visibility and Growth Outlook
Q: Can you sustain mid-single-digit organic order growth?
A: Emerson expects to finish the year with mid-single-digit order growth, supported by a strong MRO business (about 65% of Q1 revenue) and a robust project funnel. They booked approximately $400 million across over 90 projects in Q1, with continued activity in energy transition, sustainability, and metals and mining.

Discrete Market Recovery Outlook
Q: When will discrete markets recover?
A: Emerson anticipates a recovery in discrete orders in the second half of the year, with orders improving in Q3 and Q4 and sales turning positive in Q4 due to easier comps.

Process and Hybrid Markets Strength
Q: Are process markets lagging discrete softness?
A: Management believes process and hybrid markets are supported by robust secular drivers like energy security and sustainability, and are not expected to follow discrete market softness. They did not experience a boom-bust cycle and see disciplined capital spending by customers.

Impact of LNG Export Permitting Decision
Q: How does halted LNG export permitting affect you?
A: Although disappointed by the U.S. decision to hold LNG export permits, Emerson doesn't foresee a meaningful impact on 2024 projects. Global activities in Qatar, Mozambique, and Guyana provide ample opportunities, and current North American projects have necessary approvals.

China Sales and Outlook
Q: What is the outlook for China sales?
A: Emerson grew China sales by high single digits in the quarter and expects mid- to high single-digit growth for the year. They remain robust due to secular drivers, with power and chemical sectors driving growth.

Margin Expectations and Incrementals
Q: Why did incremental margin guidance lower despite beat?
A: The full-year incremental margin guidance decreased due to foreign exchange impacts, which added one point with lower profitability. Core drivers like volume leverage and price/cost remain the same.

Free Cash Flow Guidance
Q: Why maintain free cash flow guidance despite better outlook?
A: Emerson maintained its free cash flow guidance at $2.6 to $2.7 billion. While earnings and sales increased, yielding about $50 million more cash flow, it still falls within the guided range. Acquisition-related costs and elevated CapEx are tracking as expected.

Supply Chain Normalization
Q: Are supply chains normalized now?
A: Supply chains have normalized, improving Emerson's ability to procure electronics and increase production. The Measurement and Analytical business is the last to normalize, with overdue backlog shipping through Q2.

R&D Transformation at Test and Measurement
Q: How are you transforming R&D at Test and Measurement?
A: Emerson is prioritizing projects to focus on critical growth opportunities in key markets like EVs and semiconductors. By bringing discipline to resource allocation, they aim to drive more innovation at a better cost.

Revenue Synergies from NI Acquisition
Q: What are expectations for NI revenue synergies?
A: Emerson is exploring revenue synergies in markets like EV batteries and semiconductors, leveraging customer overlap and joint capabilities from R&D through production. While not ready to quantify, they are actively working on opportunities.

Project Funnel and Profitability
Q: Any differences in profitability or service attachment?
A: There are no significant differences in profitability between growth platforms and traditional projects. Emerson manages a $150 billion installed base, with service contracts and commitments for replacements and maintenance.

Price/Cost Expectations and Material Inflation
Q: Has price/cost expectation changed for the year?
A: Price contribution remains at 2 points for both the quarter and the year, with no change expected. Net material inflation is improving due to opportunities on direct materials and lower logistics costs.

Measurement and Analytical Business Growth
Q: What's driving strong growth in Measurement and Analytical?
A: The 28% sales growth is driven by supply chain normalization and easier comparisons due to prior challenges. Orders are up high single digits, reflecting a healthy demand environment.

Impact of Foreign Exchange on Margins
Q: How did FX affect margin guidance?
A: Foreign exchange assumptions added one point to the leverage number with lower profitability, leading to a lower incremental margin guidance despite a Q1 beat.

National Instruments Sales Guidance
Q: Is NI turning slower than expected?
A: The full-year NI sales guidance remains at $1.5 to $1.6 billion, consistent with prior guidance. The previously mentioned $1.6 billion was rounded, and there's no indication of slower performance.

Backlog and Order Activity
Q: How is your backlog and order activity trending?
A: Backlog stands at $7.6 billion, up significantly. Emerson booked about $400 million in projects in Q1 and continues to see strong order activity supported by MRO business and project funnel growth.

Sales Synergies Timeline from NI
Q: When will you realize sales synergies from NI?
A: Emerson is working on customer-specific sales synergies but is likely 3 to 6 months away from publicly detailing plans. Focus is currently on integrating cost synergies.

Outlook on Last 9 Months Organic Growth
Q: Any change in organic growth expectations?
A: No change in organic outlook; Emerson remains positive due to a strong environment and execution.

SAF Win with DG Fuels Scope
Q: What is included in the DG Fuels SAF win?
A: The win includes the entire automation stack: final control elements, sensing elements, DeltaV control system, and analytics packages—a holistic, full-package 100% Emerson solution.

Second Quarter EPS Guidance
Q: Why is Q2 EPS only slightly up sequentially?
A: The modest increase in Q2 EPS is due to lower test and measurement earnings sequentially, with no significant changes in the base business mix or trajectory.