Rockwell Automation Reports Mixed Q1 with EPS Beating Expectations

Rockwell Automation, Inc. (NYSE: ROK) reported its financial outcomes for the first quarter of fiscal 2025, revealing a challenging start to the year. The company, a leader in industrial automation and digital transformation, saw its reported sales fall by 8.4% to $1,881 million from $2,052 million in the same period last year. This decline was attributed to a decrease in organic sales by 7.6% and a minor impact from currency translation, which reduced sales by 0.9 percentage points.

Rockwell Automation Reports Mixed Results, EPS Beat

Despite the drop in sales, the company achieved a diluted EPS of $1.61 and an adjusted EPS of $1.83, reflecting a year-over-year decrease of 13% and 10%, respectively. The decline in EPS was primarily due to lower sales volume. However, Rockwell Automation’s cost-cutting measures and margin expansion projects have begun to yield benefits, as evidenced by the company’s pre-tax margin of 11.3% and total segment operating earnings of $321 million, down 10% from the previous year.

Cash flow from operating activities showed significant improvement, generating $364 million compared to $33 million in the first quarter of fiscal 2024. Free cash flow also increased to $293 million, a substantial turnaround from an outflow of $35 million in the same period last year. This increase was mainly due to the absence of incentive compensation payouts related to fiscal 2024 performance

Rockwell Automation’s first-quarter results were mixed when compared to expectations. The company reported an adjusted EPS of $1.83, which surpassed the anticipated EPS of $1.57. However, the reported sales of $1,881 million fell short of the expected revenue of $1.89 billion. This shortfall in sales was largely due to a decrease in sales volume across its segments, despite the company’s efforts to manage costs and expand margins.

The Intelligent Devices and Software & Control segments both experienced a 13% and 12% decline in sales, respectively, compared to the same period last year. In contrast, the Lifecycle Services segment saw a 5% increase in sales, driven by higher sales volume and margin expansion efforts. Despite these challenges, Rockwell Automation’s total annual recurring revenue increased by 11% year-over-year, indicating growth in its recurring revenue business.

While the company’s overall sales performance did not meet expectations, the better-than-expected EPS suggests that Rockwell Automation’s focus on operational excellence and cost discipline is starting to pay off. The company also noted that demand was stronger than anticipated, with sequential growth across all regions and business segments.

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Rockwell Automation Expects Sales Growth in the -5.5% to 0.5% Range for Fiscal 2025

Rockwell Automation has updated its guidance for fiscal 2025. The company now expects reported sales growth to range between a decline of 5.5% and an increase of 0.5%, factoring in an anticipated 1.5% negative impact from foreign exchange. The organic sales growth range remains unchanged at between a decline of 4% and an increase of 2%.

For earnings, Rockwell Automation reaffirmed its guidance for diluted EPS to be between $7.65 and $8.85, and adjusted EPS to range from $8.60 to $9.80. The company remains confident in its ability to achieve gradual sequential improvement in sales and margins throughout the fiscal year, despite potential impacts from tariffs and ongoing macroeconomic uncertainties.

CEO Blake Moret expressed confidence in the company’s strategic investments aimed at driving sustained growth and profitability. He emphasized Rockwell Automation’s strong position to support American manufacturers in creating the future of industrial operations, highlighting the company’s commitment to long-term productivity and margin expansion targets.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.