Rockwell Automation's Mixed Q4: EPS Beats Amid 21% Sales Drop And Cautious FY25 Outlook

Rockwell Automation, Inc. ROK shares are trading lower after the company reported fourth-quarter results.

Sales fell 21% year over year (on a reported and organic basis) to $2.036 billion, missing the consensus of $2.065 billion.

Segment Details: Intelligent Devices sales declined 19% to $946 million, Software & Control fell 39% to $502 million, and Lifecycle Services increased 3% to $588 million.

Total ARR grew 16%, and organic ARR rose 14% in the quarter. Adjusted EPS was $2.47, beating the analyst consensus of $2.41.

Total segment operating earnings were $409 million, down 28%, with a segment operating margin of 20.1% compared to 22.3% a year ago. The decrease in segment operating margin was mainly due to lower sales volume and an unfavorable mix.

The company held $471.0 million in cash and equivalents as of year-end. In the fourth quarter, the company bought back around 0.5 million shares for $118.0 million. As of September, the company had $1.3 billion worth of shares remaining available under the existing share repurchase authorization.

FY25 Outlook: Rockwell expects adjusted EPS of $8.60 – $9.80 (vs. $9.67 estimate), with reported and organic sales growth guidance of (4)% to 2%.

Blake Moret, Chairman and CEO, said, “Orders for the quarter came in lower than expected, reflecting continued softness in many of our end markets. Operating performance was solid, with good sales conversion, margin, and EPS. The performance of our Lifecycle Services segment stands out, with its higher exposure to process end markets, growth in digital services, and continued margin expansion.”

“Given the uncertainty in the current macroeconomic environment and the typical seasonality in our longer cycle business, we are expecting our fiscal Q1 sales to be down from Q4 levels, followed by a gradual sequential improvement through the year.”

Investors can gain exposure to the stock via Tema ETF Trust Tema American Reshoring ETF RSHO and ProShares S&P Kensho Smart Factories ETF MAKX.

Price Action: ROK shares are down 4.52% at $280.73 at the last check Thursday.

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