“we're taking meaningful steps to address ESS cost structure and expect to return to margin expansion in 2026.”

In context

“ntaining our full year ESS sales growth guidance of flat to up slightly and anticipate fourth quarter sales to be down low single digits year-over-year. A difficult macro backdrop for energy has weighed on our near-term guidance, but the long-term outlook remains strong. A third quarter increase in UOP orders of 9% is a signal of growing underlying demand from our customers, and we have good visibility into projects order strength continuing. On segment margin, we anticipate a meaningful fourth quarter contraction, resulting in a roughly 1 point reduction for the full year. Lower high-margin catalyst and licensing sales are offsetting commercial excellence and uplift from the LNG and Sundyne acquisitions. While cost inflation and market headwinds have presented a margin challenge in 2025, we're taking meaningful steps to address ESS cost structure and expect to return to margin expansion in 2026. Let's move to Slide 11 to go through updates on our 2025 EPS walk. Our earnings growth attribution comments separate out the year-over-year impact of Solstice spin-off at the end of the month, which is anticipated to reduce adjusted earnings per share by $0.21. We now expect segment profit growth, both organic and contribution from acquisitions to add $0.63 to adjusted EPS for the full year, $0.10 better than our previous view as we fully flow through better-than-anticipated third quarter operating results. Third quarter outperformance versus the midpoint of our guidance range benefited from a lower effective tax rate and reduced below-the-line expenses, which were also benefiting the full year. Fourth quarter segment profit contributions to earnings are in line with our prior expectation”