Quarterly guidance

Organic growth
5% to 6% organic growth expected in the fourth quarter.
Segment margin
Approximately 22% segment margin expected for the fourth quarter.
Industrial Automation margin
22% segment margin in the fourth quarter.
Building Automation margin
Margins expected to expand 70 to 90 basis points.
Process Automation and Technology margin
Around 21.5% in the fourth quarter.

Annual guidance

Organic growth
Full year organic growth raised to 4% to 5%, up from 3% to 4% previously.
Segment margin
Expected to be at the high end of the range at 20.5%.
Adjusted EPS
Raised to the range of $8.40 to $8.45, representing a $0.23 improvement at the midpoint.
Free cash flow
Raised $100 million to $2.1 billion.

Outlook

Demand environment
Demand remains strong across most of the portfolio with short-cycle orders up 8% excluding divestitures.
Energy upcycle
Process Automation and Technology is beginning a multiyear growth inflection fueled by robust project backlog and energy sector investments.
Inflation and pricing
Inflation is expected to remain at current levels into the first half of 2027, mitigated by strategic pricing averaging 4% for the year.
Order trends
Fourth quarter orders are expected to grow in the high single-digit range, excluding large LNG awards from the prior year.
Leverage and capital allocation
Gross leverage is committed to be reduced below 3x by lowering gross debt to under $13 billion by the end of 2026.