Impact of Middle East Conflict on Emerson Q2 2026 Sales Growth Analysis

Executive summary: what the Middle East conflict does to Emerson’s Q2 2026 sales growth (and by segment)

Emerson management said the Middle East conflict was a ~one-point headwind to consolidated underlying Q2 2026 sales growth. ¹ This translated into reported Q2 underlying sales growth of ~5% that was below expectations, with the Middle East conflict responsible for approximately one point. ¹ Management also stated that excluding these headwinds (including the software contract renewal dynamic), Q2 underlying sales growth was approximately 3%. ²

To understand “across different segments,” the excerpts provide the segment-level direction and magnitude of conflict impact where explicitly stated, plus segment-level performance where the conflict impact is described as part of the drivers.

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Step 1: Consolidated Q2 2026 growth impact (the “one-point” headwind)

• Emerson reported underlying sales growth of 5% in Q2 2026, but below expectations due to a one-point impact from the Middle East conflict (in addition to other headwinds). ¹
• Emerson later clarified that Q2 results were also adversely affected by the Middle East conflict by approximately one point, and that excluding these headwinds, Q2 underlying sales growth was approximately 3%. ²

Therefore: the conflict reduced what otherwise would have been stronger Q2 growth by about ~1 percentage point at the consolidated level. ¹²

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Step 2: Segment-level effects (what the excerpts directly say)

1) Software and Systems segment

The clearest segment-specific conflict impact in the provided excerpts is for Intelligent Devices (part of Software/Systems), not for the whole segment. However, Emerson gave segment-level performance that allows you to bracket where the Middle East likely hurt.

• Emerson described that Software and Systems faced a 4.5% sales headwind from the software contract renewal dynamic, and reported underlying sales growth of 1% for the segment. ³
• Separately, Emerson stated that Intelligent Devices underlying sales were down 1% and that the Middle East conflict impacted this growth by two points, offsetting strength in power and LNG. ⁴

Implication across Software and Systems:

• Within Software and Systems, the conflict impact is concentrated in Intelligent Devices, where it was a ~2-point drag to that business’s growth. ⁴
• Because Intelligent Devices’ negative conflict effect was partly offset by strength in other Intelligent Devices sub-demand areas (power and LNG), the net outcome for Intelligent Devices was still down 1%, not worse. ⁴

So, the segment-level picture is:

• Software/Systems overall: underlying growth was 1%, but this includes both the major software renewal headwind and other factors beyond the conflict. ³
• Within Software/Systems (Intelligent Devices): conflict created a ~2-point drag, offset by power/LNG. ⁴

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2) Intelligent Devices (sub-segment within Software and Systems)

This is the most explicit segment/disaggregation for conflict impact:

• Intelligent Devices underlying sales were down 1%. ⁴
• The Middle East conflict impacted this growth by two points, offsetting strength in power and LNG. ⁴

Conclusion for Intelligent Devices:
The conflict was a material driver of weakness—a ~2 percentage-point headwind to Intelligent Devices’ underlying sales growth in Q2 2026. ⁴

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3) Test and Measurement (within Software and Systems)

For Test and Measurement, the conflict impact is not quantified directly in the excerpts, but the growth performance is provided:

• Test and Measurement was up 12% year over year in the quarter. ²
• Additionally, Test and Measurement continued to exceed expectations, up 12% year over year, and Ovation was up mid-teens. ⁵

Conclusion for Test and Measurement:
The excerpts show strong growth (+12%), suggesting the conflict did not dominate the segment’s Q2 results (or it was outweighed by other growth). ²⁵

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4) Control Systems and Software (within Software and Systems)

Again, the excerpts provide growth direction, but not conflict magnitude at the segment level:

• Emerson said Control Systems and Software was up 4% excluding the software renewal dynamic. ²
• Management also described software contract renewals as a “300-basis-point drag” on margin, which is a distinct headwind from the Middle East conflict. ⁴

Conclusion for Control Systems and Software:
The conflict’s quantified impact is not stated for this specific sub-segment, but the business still grew (+4% ex renewal dynamic). ²

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5) Safety and Productivity (standalone business group)

The conflict is not quantified for Safety and Productivity in the excerpts, but the segment’s underlying growth and margin drivers are described:

• Safety and Productivity was up 2% underlying in Q3 and 2% for the full year (these are guidance, not Q2). ⁶
• For Q2 performance context, Emerson said Safety and Productivity was up 2% underlying, driven by electrical products and stable project activity in North America, with European markets remaining soft. ⁴
• There is no explicit “Middle East conflict impacted by X points” statement for Safety and Productivity in the provided excerpts. ⁴

Conclusion for Safety and Productivity:
The excerpts attribute Q2 underlying performance primarily to North America and electrical products, and Europe softness, not to the Middle East conflict directly. ⁴

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6) Intelligent Devices vs. the consolidated “one-point” headwind reconciliation

There’s a built-in reconciliation challenge:

• Consolidated underlying growth: ~1 point headwind from Middle East conflict. ¹²
• Intelligent Devices: conflict impacted growth by two points. ⁴

This implies the conflict affected different business groups differently (and/or offsetting strengths existed), consistent with management’s statement that Intelligent Devices’ conflict headwind was offset by strength in power and LNG. ⁴ It also aligns with management’s narrative that the quarter saw disruption in the Middle East including manufacturing shutdowns and reduced field-service operations, but activity improved in April. ⁷

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How Emerson expects the conflict to flow into sales growth (Q2 → full-year, context for “expected impact”)

While your question asks specifically about Q2 2026, management’s framing of expectation helps interpret “expected to impact”:

• Emerson said the conflict caused a one-point impact to underlying sales in the quarter and that it would impact full-year 2026 underlying sales by one point. ⁷
• They also stated they modeled the conflict in the Middle East as a one-point headwind to consolidated Emerson’s sales growth in 2026. ³

So, the expectation is not a one-time Q2 event; management baked a ~one-point headwind into the full-year outlook. ⁷³

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Segment-by-segment answer (directly tied to the excerpts)

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Bottom line

For Q2 2026, Emerson expects/indicates the Middle East conflict to reduce its consolidated underlying sales growth by about one percentage point. ¹² The excerpts further show the largest explicitly quantified conflict drag within the segment breakdown in Intelligent Devices, where the Middle East conflict impacted growth by about two points (but was partly offset by strength in power and LNG, leaving Intelligent Devices down 1% underlying). ⁴ Other parts of Software/Systems—particularly Test and Measurement (+12%)—show strong growth in the quarter, with the excerpts not attributing their performance to the Middle East conflict. ²