ロックウェル・オートメーション (ROK) 2026年度第4四半期決算説明会：2027年度の成長およびマージン見通し

ロックウェル・オートメーション（NYSE: ROK）は、堅調なコア売上高の成長、大幅な営業利益率の拡大、フリーキャッシュフローの増加を達成し、2026年度を締めくくりました。経営陣は、自動化需要や新製品、生産性向上施策を追い風に、2027年度もオーガニック成長の継続と収益性の改善を見込んでいます。

主なポイント

• 2026年度第4四半期のコア売上高は、関税還付金および合弁会社Sensiaの解消影響を除いたベースで前年同期比7%増加しました。報告ベースの売上高は1%増、オーガニック売上高は3%増となりました。
• 全社営業利益率は320ベーシスポイント拡大して24.5%となりました。調整後EPS（1株当たり利益）は関税還付関連項目による0.11ドルの押し上げを含め、16%増の3.88ドルとなりました。
• 通期のコア売上高は9%増加し、調整後EPSは27%増の13.42ドル、全社営業利益率は330ベーシスポイント拡大して22.2%となりました。
• セグメント別では「ソフトウェア＆コントロール」が成長を牽引し、第4四半期のオーガニック売上高は15%増加しました。経営陣によると、基調的な需要と市場シェアの拡大を反映し、Logixの売上高は25%増加しました。
• 半導体向け売上高は第4四半期に約50%急増しました。半導体およびデータセンター事業は合計で同社売上高の約10%を占めており、経営陣は2027年度に10%台半ばの成長を見込んでいます。
• 2027年度について、経営陣はオーガニック売上高の成長率を6%〜9%、全社営業利益率を23%、調整後EPSを14.50ドル〜15.50ドル、フリーキャッシュフロー転換率を100%とする業績見通し（ガイダンス）を示しました。

主要財務実績

ロックウェルは米国政府から1億300万ドルの関税還付金と500万ドルの関連利息を受け取りました。また、顧客への見積還付金8,500万ドルを未配分売上高の減額として計上しました。関連費用および税金を控除した結果、関税還付関連項目は調整後EPSを0.11ドル押し上げました。

事業および営業実績

「インテリジェント・デバイス」セグメントの第4四半期オーガニック売上高は、新製品の投入や食品・飲料、タイヤ、半導体市場での成長に支えられ、5%増加しました。セグメント利益率は180ベーシスポイント上昇して21.6%となりました。自律走行搬送ロボット（AMR）事業は2桁の売上高成長を記録し、黒字化を達成しました。

「ソフトウェア＆コントロール」セグメントのオーガニック売上高は15%増加し、セグメント利益率は280ベーシスポイント拡大して34%に達しました。Logixの売上高は前年同期比25%増、前四半期比でも1桁台半ばの成長となりました。経営陣は、この業績が在庫補充や前倒し購入によるものではなく、基調的な需要を反映したものだと説明しました。

「ライフサイクル・サービス」セグメントのオーガニック売上高は2%増加し、セグメント利益率は16.4%となりました。BBレシオ（受注出荷比率）は0.97と、同社の過去の第4四半期の季節的傾向を上回りました。契約更新は引き続き堅調だったものの、ARR（年間経常収益）の伸びは経営陣の予想を下回りました。

ディスクリート（個別製造）産業向け売上高は、半導体、データセンター、自動車需要に牽引され20%増加しました。自動車向け売上高は15%増となり、過去2年間で最も力強い四半期となりました。電子商取引（EC）および倉庫自動化向けは第4四半期に1桁台後半の成長を記録し、通期では30%近く増加しました。

ハイブリッド産業向け売上高は1桁台半ばの伸びとなりました。ライフサイエンス向けが1桁台後半の増加となった一方、食品・飲料向けは1桁台前半の増加にとどまりました。プロセス産業向け売上高は、鉱業および化学の低迷をエネルギーと金属の成長が補い、1桁台前半の増加となりました。

鉱業向け売上高は、プロジェクトのタイミングや前年同期の高いハードルが影響し、約10%減少しました。エネルギー向け売上高は、信頼性とエネルギー安全保障への投資に支えられ、1桁台後半の伸びとなりました。

地域別では米国が第4四半期および2026年度通期で最も好調であり、通期のオーガニック成長率は12%を超えました。経営陣は、2027年度も北米が同社で最も急成長する地域であり続けると見込んでいます。

業績見通し（ガイダンス）

2027年度の売上高見通しには、2026年度の顧客向け関税還付引当金による100ベーシスポイントの押し上げ効果が含まれています。Sensiaの事業売却は、報告ベースの成長率を約1.5パーセントポイント押し下げ、第1四半期と第2四半期に均等に分かれる形で計1億ドルの減収要因になると見込まれています。

経営陣は、2027年度第1四半期の売上高が季節的要因により前四半期比で減少した後、緩やかに回復していくと見込んでいます。第1四半期のオーガニック売上高は1桁台半ばの成長、調整後EPSは約3.00ドル、オーガニック増収に伴う限界利益率は30%台半ばになると予測されています。

通期では、「インテリジェント・デバイス」セグメントのオーガニック売上高および報告ベース売上高は1桁台半ばの成長となり、利益率は約100ベーシスポイント拡大する見込みです。「ソフトウェア＆コントロール」の売上高は1桁台後半の増加が見込まれます。「ライフサイクル・サービス」のオーガニック売上高は1桁台前半の成長となり、利益率は約100ベーシスポイント改善すると予想されています。

リスクおよび注視事項

経営陣は、特にメモリーやその他の電子部品においてインフレが依然として重荷になっていると述べました。メモリーの調達状況は管理可能とされたものの、プリント基板（PCB）や一部の特定部品は調達がより困難な状況が続いています。

鉱業をはじめとする資本集約型産業では、プロジェクトの遅延が続いています。ロックウェルによると、これらのプロジェクトは中止ではなく期間が延長されているものの、その実施時期が売上高計上のタイミングに不透明感をもたらしています。

経営陣は、2027年度のガイダンスにおいて顧客の設備投資が全面的に再開することは想定していません。設備投資の回復がより力強いものとなれば、売上高はガイダンス予想レンジの上限に向かう可能性があります。

「ライフサイクル・サービス」のARRも、プロジェクトの遅延や導入規模の縮小による影響を受けています。インフレによってIT機器のコストが上昇したため、マネージドサービスの展開規模を縮小した顧客も見られます。

自動車業界の顧客は依然として関税の不透明感に直面しており、食品・飲料分野の設備投資も、メーカーが原材料費、包装費、運営コストへの対応に注力していることから低調な推移が続いています。

アナリスト質疑応答のハイライト

経営陣は、半導体とデータセンターを合わせたバーティカル市場が2027年度に10%台半ばのペースで成長すると予想しており、顧客によるAIインフラや次世代コンピューティング能力の増強に伴い、力強い需要が継続する可能性があると指摘しました。

自動化サイクルについて、経営陣はコントローラーの出荷数量がパンデミック前の水準を上回ったものの、依然としてさらなる成長余地があると述べました。同社はLogixの好調な勢いについて、幅広いエンド市場からの需要、新製品、そして市場シェアの拡大によるものとしています。

ロックウェルの2027年度見通しは、設備投資の全面的な加速を前提としていません。経営陣は米国の生産能力投資について、まだ「4回表裏（中盤の入り口）」程度にあると表現し、新規工場建設（グリーンフィールド）、近代化、新製造ラインの導入、既存設備の改修（レトロフィット）に至る幅広い好機が存在するとしています。

経営陣は、ソフトウェアとサービスの両方に支えられ、ARRの成長率が5%から7%へ加速すると予想しています。社内での重点課題としては、契約更新手続きの簡素化、取引摩擦の低減、そしてハードウェア、ソフトウェア、サービスの包括的な販売能力の向上が挙げられています。

生産性向上施策は、利益率の見通しにおいて引き続き中核をなしています。ロックウェルは製造、間接費、販管費（SG&A）、ソフトウェア開発の全体でこれらの取り組みを進めており、これには開発スピードと業務効率を高めるためのAI活用も含まれます。

決算説明会（アーニングスコール）書き起こし全文

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決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Thank you for holding, and welcome to Rockwell Automation's quarterly conference call. I need to remind everyone that today's conference call is being recorded. [Operator Instructions]. At this time, I would like to turn the call over to Aijana Zellner, Head of Investor Relations and Market Strategy. Ms. Zellner, please go ahead.

Aijana Zellner

Thank you, Julianne. Good morning, and thank you for joining us for Rockwell Automation's Fourth Quarter Fiscal 2026 Earnings Release Conference Call. With me today is Blake Moret, our Chairman and CEO; and Christian Rothe, our CFO.

Our results were released earlier this morning, and the press release and charts are available on our website. These materials as well as our remarks today will reference non-GAAP measures. Reconciliations of these non-GAAP measures are included in both the press release and charts. A replay of today's webcast and a transcript of our prepared remarks will be available on our website at the conclusion of today's call.

Before we begin, please note that our comments today include forward-looking statements regarding the expected future results of our company. Our actual results may differ materially due to a wide range of risks and uncertainties described in our earnings release and SEC filings. And with that, I'll hand it over to Blake.

Blake Moret

Thanks, Aijana, and good morning, everyone. Before we turn to our fourth quarter results on Slide 3, I'd like to make a few opening comments.

First of all, since we're talking to you from Milwaukee, Wisconsin, it seems only fitting that we congratulate the Milwaukee Brewers on winning the World Series. Fiscal 2026 was a great year for Rockwell, too. We delivered growth at the high end of our long-term framework, drove significant margin expansion and generated strong double-digit earnings growth, all in a year marked by inflationary pressures tariff uncertainty and geopolitical volatility.

Our performance reflects the differentiated value resulting from our strategy, offering and operating model. We're gaining share in key product areas, and we achieved our long-term enterprise operating margin target of 22% 3 years after setting the target. I'm especially proud of the unique new products and productivity improvements we've delivered over that time.

We had a very strong Q4 even before the benefit from tariff refunds received from the U.S. government and we initiated a tariff refund program for eligible customers. The net impact reduced reported sales by approximately $85 million and increased adjusted EPS by $0.11.

For the clearest picture of our results in the quarter and for the full year, we will detail the impact of the IEEPA tariff refunds on company results. This impact is included in the bridges on Slide 3 and 6 and you'll find a complete recap on Slide 8 of the earnings deck. Individual business segment, industry and regional results do not reflect the impact of tariff refunds.

On Slides 3 and 6, you see core growth, which does not include the impact of tariff refunds. That core growth reflects the strength and diversity of our end markets. We continue to perform well in our traditional markets, including automotive, food and beverage, energy and life sciences, while expanding our presence in additional growth areas, including semiconductor data centers and warehouse automation.

I'm particularly happy with our strong market access across discrete, hybrid and process industries, positioning us to capitalize on opportunities across a wider range of end markets. Customers continue to turn to Rockwell to improve productivity, resilience, quality, safety and workforce effectiveness. As industrial operations become more AI-enabled and increasingly autonomous, customers are looking for ways to orchestrate people, AI agents, workflows and industrial systems in real time. We believe this represents a significant opportunity for Rockwell and plays directly to our strength.

Let's now turn to our fourth quarter results on Slide 3. Excluding the impact of the tariff refunds and the Sensia joint venture dissolution, core sales grew 7% in the quarter. Remember that we grew double digits in Q4 of fiscal year '25. Demand remained healthy with sales in all 3 business segments coming in largely in line with expectations. Consistent with prior quarters, products out through our longer-cycle solutions business with continued strength in data center, semiconductor and automotive.

In our Intelligent Devices segment, Organic sales were up 5% versus prior year, driven by strong adoption of recent product introductions and year-over-year growth in food and beverage, tire and semiconductor. The auto AMR business delivered another quarter of double-digit sales growth and reached profitability as planned, marking an important milestone as we scale our physical AI and autonomous operations capabilities.

Software controlled organic sales grew 15%. Logix sales had a strong finish in Q4 and with 25% year-over-year growth and mid-single-digit sequential growth. Organic sales and life cycle services were up 2% year-over-year. Book-to-bill in this segment was 0.97, above our historical Q4 seasonality with new demand for the energy-focused process automation business that returned to Rockwell following the Sensia dissolution.

Organic annual recurring revenue was up 5% year-over-year, with high single-digit growth in software and low single-digit growth in life cycle services. While ARR growth did not meet our expectations, renewals remain strong, and we continue to add new customers across industries and regions. A good example is [ Booster], a German manufacturer of high-precision automotive components, we selected our cloud-native plex software to accelerate their digital transformation and improved visibility, traceability and quality across operations.

Enterprise operating margin expanded 320 basis points year-over-year to 24.5%. This includes over 1 point of positive impact from tariff refunds. Adjusted EPS was $3.88 and up 16% year-over-year. Price/cost was positive in the quarter and for the full year.

Moving to Slide 4 for Q4 industry highlights. Sales in discrete were up 20% year-over-year with strong growth in semiconductor, data center and automotive. Automotive sales grew 15% versus prior year and delivered its strongest quarter in 2 years as customers increasingly standardize on our software, controls and MES platforms to support next-gen manufacturing programs.

E-commerce and warehouse automation sales were up high single digits in the quarter against a difficult comparison as we grew 70% in the prior year. Importantly, underlying demand remained healthy, driven by continued modernization investments. For the full year, e-comm and warehouse automation grew nearly 30%, marking another year of exceptional growth and reinforcing our confidence in the long-term opportunity.

Semiconductor sales were up almost 50% year-over-year. Semi and data center business continues to see strong demand from investments in AI infrastructure and next-generation computing capacity, driving demand for our automation, software and power management solutions. With data center having scaled into a meaningful business for Rockwell, we will begin reporting semiconductor and data center as a combined vertical beginning in fiscal 2027.

Together, these markets represent about 10% of our revenue and are supported by powerful long-term growth drivers. Our Q4 win with QTS, a leading hyperscale data center provider highlights the expanding role Rockwell is playing in data centers. As QTS scales capacity to support AI-driven demand, the company is standardizing on Rockwell's technologies across automation, cybersecurity, asset management and digital infrastructure, positioning us to capture a broader share of spend and participate in future build-outs across its global footprint.

Moving to our hybrid industries. Sales in this segment grew mid-single digits with strong growth in life sciences and tire. Food and beverage sales were up low single digits in the quarter and finished the year with mid-single-digit growth. Customer investment remained focused on productivity, cost reduction and operational resilience.

Manufacturers continue to invest in automation and digital transformation initiatives to improve efficiency and operating performance. We're also seeing capacity investments in areas of strong consumer demand. At [ carry Ingredients], a global nutrition solutions provider, our process control, power, and production optimization capabilities are supporting a significant capacity expansion and future growth.

Life sciences sales grew high single digits versus prior year. Looking ahead, we see a healthy pipeline of capacity expansion and infrastructure projects with growing adoption of MES and process automation solutions creating opportunities across our entire portfolio. A great example of this is [ Stryker], a leading medical device manufacturer who selected Rockwell's integrated control and motion technologies to create a standardized platform to support future growth.

Moving to process, our sales here were up low single digits with continued growth in energy and metals partially offset by tougher prior year comps in mining and chemicals. Energy sales were up high single digits in the quarter, while capital deployment remains disciplined, Customers continue to invest in projects that enhance reliability and energy security, supporting a healthy pipeline across oil and gas, nuclear and renewables.

We see a particularly attractive opportunity in LNG, where global investments in new export capacity and infrastructure modernization are closely aligned with Rockwell's growing capabilities in automation, software and cybersecurity for these applications. One example is Perenco's Cap Lopez LNG development in Gabon, where Rockwell was selected by [ Dip stone], a global EPC company to provide an integrated suite of automation process safety, operator training and motor control solutions for this large-scale energy project.

Mining sales were down about 10% due to project timing and prior year comps. Customer investment remains focused on increasing production, improving productivity and enhancing operational resilience. We continue to see a strong pipeline tied to copper, lithium, iron ore and other critical minerals where investments in capacity expansion and autonomous operations are creating an attractive long-term opportunity across our portfolio.

A great example of a recent win in mining is with Vale, one of the world's largest mining companies, who chose Rockwell as a strategic modernization partner at its courageous mining complex, to create a scalable blueprint for future infrastructure upgrades supporting Vale's goals around safety, reliability and production growth.

Let's turn to Slide 5 for our Q4 organic regional sales. We saw another quarter of strong year-over-year growth across most of our regions. The U.S. was our strongest geography in the quarter and for the full year. Ending fiscal '26 with over 12% organic growth, we expect North America to continue to be our fastest-growing region in fiscal 2027.

Moving to Slide 6 for key highlights of full year fiscal 2026. As you can see, we had a strong fiscal with our core sales up 9% versus prior year. Organic ARR grew 5% with high single-digit growth in our software ARR. We had enterprise operating margin of over 22% for 3 straight quarters and will update our long-term margin targets at the upcoming Investor Day. Adjusted EPS grew over 20% year-over-year. Free cash flow conversion of 113% exceeded our expectations for the year.

Let's now turn to Slide 7 to review our fiscal 2027 outlook. We entered fiscal 2027 from a position of strength. Demand across both our traditional and emerging end markets remains healthy, and customers continue to invest in productivity, resilience and more autonomous operations. We expect our organic sales growth for the year to be in the 6% to 9% range. The midpoint of our guide assumes a seasonal sequential decline in Q1 followed by gradual improvement through the remainder of the year. Christian will provide more detail in his section.

Annual recurring revenue is expected to grow 7% next year. We expect our enterprise operating margin to increase by about 1 point in adjusted EPS to be $15 at the midpoint. We expect free cash flow conversion of 100% in fiscal year '27. I'll now turn it over to Christian for more detail on our Q4 and financial outlook for fiscal '27. Christian?

Christian Rothe

Thank you, Blake, and good morning, everyone. Before I walk through our fourth quarter results, I want to direct your attention to Slide 8 and address the impact of the IEEPA tariff refund. First, we received $103 million of tariff refunds from the U.S. government, representing the vast majority of EPA tariffs we previously paid along with $5 million of related interest. Second, we initiated a customer refund program for price increases we previously implemented to recover those tariff costs. Based on our estimated redemption rate, we recorded $85 million of refunds to customers reflected as a reduction to unallocated sales on our P&L.

Slide 8 provides additional details on these items, including the interest benefit. All of these impacts are reflected in adjusted EPS and net of a related $8 million nonrecurring charge and the tax effect. The net tariff refund impact is $0.11 in the quarter and for the full year fiscal '26. For presentation purposes and clarity, all tariff refund activity is being reported in other unallocated items in the P&L. This preserves the presentation of our segment results.

With that context, let's turn to our fourth quarter results on Slide 9. Fourth quarter reported sales were up 1% versus prior year, with organic sales up 3%. As Blake mentioned earlier, our core sales growth in the quarter was 7%. The currency impact was neutral.

Price contributed about 2.5 points to organic growth with minimal incremental tariff-related pricing as we lap prior year actions. Full year price realization was similar to the fourth quarter. Price/cost was positive in the quarter and tariff price cost has remained EPS neutral since we implemented tariff-based -- tariff-related pricing.

Enterprise operating margin, as reported, expanded by 320 basis points year-over-year in Q4. Strong operating performance drove 140 basis points of margin expansion. Additionally, 130 basis points came from tariff refund items and about 50 basis points came from the Sensia dissolution.

The adjusted effective tax rate for the fourth quarter was 20.9%, up from 17.8% last year. This year-over-year increase primarily reflects [ Bess Pillar 2], partially offset by higher discrete tax benefit. For the full year fiscal '26, our adjusted ETR was 19.6%, in line with our guide. Free cash flow was $602 million in the fourth quarter, up $197 million year-over-year, and free cash flow conversion in the quarter was 139%. Tariff refunds contributed approximately 21 points to conversion.

Slide 10 provides an overview of sales and margin performance across our operating segments. As a reminder, segment results do not reflect the impact from the tariff refunds. Intelligent Devices margin of 21.6%, up 180 basis points year-over-year was driven by higher sales volume, favorable currency, positive price/cost and mix, partially offset by higher compensation.

Organic incremental margins were in the mid-40s. Software control margin of 34% was up 280 basis points versus prior year, driven by 15% organic sales growth. This segment saw year-over-year incrementals right around 50% on an organic basis. Life cycle services margin was 16.4%, better than our expectations and down 110 basis points year-over-year, primarily reflecting tough prior year comps and project mix. Overall, excluding the impact of the tariff refunds, Rockwell delivered incremental organic margins in the high 30s, reflecting strong operating leverage and underlying growth.

Let's move to the next Slide 11 for the adjusted EPS walk from Q4 fiscal '25 to Q4 fiscal '26. Core performance contributed $0.40 of year-over-year EPS growth, primarily driven by higher volume, followed by favorable mix and positive price cost, partially offset by higher compensation. Net tariff refund related items were an $0.11 tailwind. Currency was a $0.10 benefit. Lower share count from our opportunistic share repurchase program contributed a $0.05 benefit. Tax was a $0.15 headwind. All other items were a $0.03 tailwind to EPS.

Turning to Slide 12, I'll cover a few highlights from our full year '26. We entered the year with a strong productivity goal and exceeded it with productivity contributing meaningfully to our solid margin performance. Our teams continue to execute thousands of actions across the company to simplify how we operate improve efficiency and create capacity for growth.

In Intelligent Devices, full year incremental margins were in the high 30s, and the 20% segment operating margin was an expansion of 200 basis points year-over-year on both a reported and organic basis. This improvement was driven by volume growth with good leverage and positive price cost.

Software & Control delivered incremental margins in the high 50s with segment margins expanding by more than 400 basis points year-over-year to 33.8%. This was all about volume growth for Software & Control and it flowed through nicely. In Life cycle services, sales, earnings and segment margins were essentially flat year-over-year after adjusting for the Sensia dissolution.

At the total company level, enterprise operating margin for the full year was 22.2%, an increase of 330 basis points. Operating performance drove about 270 basis points of margin expansion and we received a slight full year benefit from tariff refund items and the Sensia dissolution. Underlying conversion was particularly strong. Excluding the impact of tariff refunds full year incremental margins were around 50% on an organic basis.

Engineering and development investment remained at about 8% of sales, supporting continued innovation and our long-term growth priorities. Adjusted EPS of $13.42 was up 27% and $1.72 better than the midpoint of our initial guide for the year, including the $0.11 benefit from tariff refunds. Free cash flow conversion was 113% for the year, including a 6-point benefit from tariff refunds.

ROIC was strong, reaching 20.4% on a trailing 12-month basis. Finally, we returned about $1.9 billion to shareowners through dividends and share repurchases during the year while still ending fiscal '26 at less than 2x leverage. Our capital structure and liquidity remains strong.

Moving on to the next slide, 13, and our fiscal '27 outlook. We expect organic sales growth of 6% to 9% or 7.5% at the midpoint. Reported and organic sales include a 100 basis point benefit from the fiscal year '26 customer tariff refund program accrual with strong growth at the midpoint of the guide at 6.5%. The Sensia divestiture represents about 1.5 point headwind to reported growth, resulting in expected reported sales growth of about 6% at the midpoint.

Our enterprise operating margin guidance is 23% and up almost 100 basis points year-over-year. We expect to achieve about 300 basis points of underlying price in fiscal '27 and these pricing actions, along with productivity will help to offset ongoing inflationary pressures. The Sensia dissolution will also give us a slight margin tailwind for the year.

Our adjusted EPS guidance is a range of $14.50 to $15.50 or $15 at the midpoint. The midpoint of our organic sales growth -- sorry, at the midpoint of our organic sales growth, we expect incremental margins in the high 30s, excluding tariff refunds.

We're also stepping up investments in our advanced manufacturing and digital infrastructure, including construction of our U.S. greenfield facility. We are targeting CapEx spending of about 4% of sales in fiscal '27. We don't expect a significant impact to depreciation in 2027 as the largest investments won't be put into service until after the fiscal year ends.

In terms of the calendarization, as Blake mentioned, we expect a typical sequential decline in Q1, followed by a sequential improvement in subsequent quarters. This is true for both sales and margins as we progress through the year.

Now let me share some additional color on our first quarter. In Q1, we expect total company sales to be up mid-single digits organically year-over-year or up low single digits on a reported basis with organic incrementals in the mid-30s and adjusted EPS of around $3 per share. From a business segment standpoint, Intelligent Devices organic and reported sales in Q1 are expected to be up mid-single digits year-over-year with segment margins up slightly year-over-year.

Software & Control organic sales are expected to grow 10% and with margin in the low 30s and incremental margins in the low 40s. Lifecycle Services organic sales are expected to be up slightly year-over-year, while reported sales will be down high single digits with segment margin in the mid-teens, above the prior year.

For the full year, Intelligent Devices sales are expected to grow mid-single digits on an organic and reported basis with segment margin expanding about 100 basis points year-over-year. Software & Control sales growth is expected to be high single digits on an organic and reported basis, with margins up year-over-year as we lap some tough comps and absorb inflationary pressures. Lifecycle Services organic sales growth is expected to be up low single digits, with segment margin up about 100 basis points year-over-year. As a reminder, the Sensia dissolution is a $100 million headwind to revenue split evenly between Q1 and Q2.

Let's turn to Slide 14 for our full year fiscal '27 adjusted EPS walk. We expect core performance to contribute $1.60 of EPS growth, reflecting the organic growth and margin expansion in our outlook. A lower share count is expected to provide a $0.20 tailwind, while net tariff refund related items are expected to be an $0.11 headwind. All other items combined are expected to be an $0.11 headwind. We expect our adjusted effective tax rate to be 20% for the year.

A few additional comments on fiscal '27 guidance for your models. Corporate and other expense is expected to be around $120 million. Net interest expense for fiscal '27 is also expected to be about $120 million. We expect average diluted shares outstanding of about 110.4 million, including approximately 600 million of planned share repurchases during the year.

We like the momentum we brought into the year. This team has shown the ability to adjust to the changing environment and continues to drive performance. We're planning to do that again in fiscal '27. With that, I'll turn it back to Blake for some closing remarks before we start Q&A.

Blake Moret

Thanks, Christian. We had a great year, and we see continued growth and expanded profitability in fiscal year '27. Rockwell has a very strong leadership team in place, with seasoned executives who understand both our traditional sources of value as well as the new ways to win.

We are leading a committed team of worldwide employees focused exclusively on industrial automation and digital transformation complemented by the best partners in the business. Automation Fair and Investor Day are less than 2 short weeks away in Boston. There has never been an automation fair that will showcase more new groundbreaking technology than this one. So I hope to see you there. Aijana will now begin the Q&A session.

Aijana Zellner

We would like to get to as many of you as possible, so please limit yourself to one question and a quick follow-up. Julianne, let's take our first question.

Operator

[Operator Instructions]. Our first question comes from Scott Davis from Melius Research.

質疑応答

Scott Davis

Blake, early in the comments, you said that you were going to start combining semis and data center into one, it's 10% of revenues, it's pretty material. What do you think the growth rate is of that kind of category, I think in terms of like a 5-year growth rate? Just trying to get a sense of what kind of tailwind this is for you guys.

Blake Moret

Yes. So we've obviously seen good growth leading up to fiscal '27. For fiscal '27, as you said, about 10% of the combined verticals, and we expect mid-teens growth for the year. And I expect that to continue, Scott. I mean it's well known that people are trying to make products smarter with embedded semiconductors as a part of the bills and material in addition to data center buildup.

And I just don't see that trend slowing down. We broke the 2 verticals together because of the large amount of commonality in the applications we're addressing. It's really all about the environmental control of these facilities with data centers. It's the central utilities plant in semiconductor, it's the building management systems and so we think that goes together. And as you said, it's an important part of our business that's growing fast. That's complemented by the continued growth in our traditional areas of value.

Scott Davis

Makes sense. And then you mentioned -- you also used the word project timing. I think specifically with mining, but perhaps maybe a little broader than that, I don't know. But to what extent do you think there was an impact on the quarter and anything that you can measure? I actually thought you might come in a little bit higher than 7% on the core. So I'm just trying to get a sense of if there were some timing issues that may have held that back a little bit.

Blake Moret

Yes. I think specifically in mining, we see a strengthening project funnel, but the delays in CapEx in mining and some of the other industries continues. Again, these are not projects that are being canceled. They're being extended out for the reasons that we've talked about in the past.

Mining, I think, has positive growth as do all of our verticals forecast for fiscal year '27, we just didn't see it materialize in Q4. But obviously, we're forecasting growth in fiscal '27. I would say, similar to home and personal care, if we look at the hybrid area, there's a lot going on out there, and we are forecasting growth for fiscal '27.

Operator

Our next question comes from Andrew Obin from Bank of America.

Andrew Obin

Can you hear me?

Blake Moret

We can.

Andrew Obin

Excellent. Fantastic. So maybe a first question on Lifecycle Services. And obviously, to step back, you guys have really turned this business around over the past couple of years, but you're sort of talking about ARR, somewhat being disappointing. I sort of think about ARR in this business linked to sort of various projects related to OpEx. Yes, I think macro is quite good. Can you just maybe step back and tell us what's happening there? And why ARR has disappointed?

Blake Moret

Andrew, I'll start with some of the macro effects and then I'll talk about what we're doing internally with things that we can control. First of all, the ARR and Lifecycle Services is being affected, to some extent, by the delays in projects that often will go in with a big initial project, but with if we're doing a good job, ARR attached to it.

The second is that because a lot of these projects are on digital infrastructure networks and cybersecurity and so on, with the inflation that's affected IT equipment, in particular, we're seeing the scale being reduced on some of those rollouts. So initially, a food and beverage customer might be looking to roll out a managed services contract at 30 additional plants, and they may cut that in half. And so that's having some impact.

We're certainly fighting for every project that we have the opportunity to participate in, and we're working on the business internally through simplifying our processes to make it easier both to deliver these projects as well as to deliver them very profitably. And we do that through the growing trusted content offering, the use of our internal agentic orchestration tools to reduce key strokes.

And that's not just a productivity measure. That's also a revenue getting measure because if we can quote these things more efficiently than we'll win more of them. And then as we talked about, our investments over the next few years include digital infrastructure to make it easier for customers to place orders for hardware, software and services simultaneously.

Andrew Obin

Got you. And maybe just [indiscernible] a liter thunder from the Analyst Day next week. But you are guys rolling out, you started to roll out new logic controllers. I think larger ones this year, are you going to do more in calendar '27? Can you just tell us, a, what the experience has been with the customers? And b, does it impact sort of the financials that we see from the outside? How does the pace of the rollout sort of impact your reported financials?

Blake Moret

Well, to be sure, Andrew, the increased pace of new product introductions and Logix do contribute to the great growth and profitability that we saw in fiscal '26 and that we expect to continue to see in '27. So the L9, which is the newest processor, is the highest performance that we've offered. It's seen strong adoption in the market.

You'll of course, see that at automation fair software-defined automation with the ability to run logic on an open compute surface will be in full display. And then the other products and enablers probably at the head of the list, I would point out factory talk conductor, which applies a genetic orchestration to our software tools across control and operator interface design, operate and maintain are all impacted by the ability to simplify engineers effort to create these systems and then to manage them. So it is contributing to the financial results we're seeing because it's helping us gain share, and it's doing it very profitably.

Operator

Our next question comes from Andy Kaplowitz from Citi.

Andrew Kaplowitz

Your discrete markets look like they continue to accelerate at least a bid up 20% overall in the last quarter. It seems like it's pretty broad-based, including automotive. I know you've talked about some ongoing reticence in terms of larger CapEx projects, but it also seems like you have above average visibility into continued improvement in discrete in '27. So maybe just a little more color in the drivers of the growth. Obviously, we understand e-commerce and those kind of markets are improving, but just general comments.

Blake Moret

Well, we're winning in automotive. I mean the mid-teens growth that we saw and the positive outlook going forward is testament to the adoption at both our existing and new customers with our traditional sources of value. But also, they're obviously interested in what AI can do to make them more -- most productive in their manufacturing processes and with the things that Rockwell has developed.

I mentioned FactoryTalk conductor, Emulate3D but as well as the work that we're doing with partners. So I should mention that Rockwell and NVIDIA are collaborating to integrate AI and advanced computing into our platforms and services and this helps manufacturers in automotive and really across manufacturing support the workforce and expand U.S. productivity and capacity, and that's an important part of the equation as well.

Andrew Kaplowitz

And then Christian, could you give us a little more color into the puts and takes of your incremental margin forecast in '27? I know you said high 30s incremental despite concerns regarding memory chip inflation out there.

So I think you already mentioned 3% pricing that continues to be above average versus history. So maybe talk about how Rockwell has evolved to stay ahead on price versus cost and what kind of inflation you're facing? And then maybe anything on the ongoing productivity focused efforts you have for '27?

Christian Rothe

Yes, sure, absolutely, Andy. So yes, as we think about the shape of 2027, as we started out with our discussion today, yes, we've got a sequential down in the first quarter, and then we're going to go into incremental growth as we go through the year, both on a sales and margin perspective. The inflation side has not abated. That is -- we still have inflation.

The rate of change has come down. The number of notifications that we're getting from our suppliers around those changes in the price that they're selling to us. Those have come down. But we still have inflation and are experiencing inflation. The good news is that for the full year fiscal '26 and for the fourth quarter, we did have favorable price cost. And for the '26 time frame, it was slightly dilutive to our margins.

As we turn the corner, and we look at '27 though, and we think about the pricing actions that 300 basis points of price that we have in place today that we're expecting to achieve that should help us to stay apace with what's happening on the inflation side. And the productivity actions, I'm glad you brought that up. We're going to go into that more at our Investor Day.

But as you know, this has been an area of a lot of activity within Rockwell over the last couple of years. I talked about thousands of projects and initiatives that are happening inside the organization right now. That list continues to grow and everything from small projects to larger ones. It is not just in the factory. It's also happening with our indirect spending. It's happening with our SG&A spend levels. So there's a lot that's occurring.

I think the part that's exciting is that it's not just used for cost reduction. That is we're using it to increase the velocity inside of our business. So AI is a really good example of that. AI, yes, there's some soft savings. There's some hard savings, both hard savings help us to offset some of the incremental costs that we have related to deployment of those technologies.

But more importantly, it's driving velocity. It's -- we have a number of things you're going to see on the floor and automation fair in a couple of weeks that we're not even necessarily on the project plan to be achieved in fiscal '26. And the team was able to get those done because of the fact that we were able to get a lot of productivity out of our AI initiatives, especially in the software development side. So really good opportunity for us to continue to drive that velocity but also expand margins.

Operator

Our next question comes from Julian Mitchell from JPMorgan.

Julian Mitchell

First of all, I just wanted to understand a little bit more the overall organic sales guide. So I think you said, Christian, sort of mid-single-digit first quarter. And then you're up for the year tariffs, I think, sort of 6% to 7% at the midpoint as the comps get easier through the year.

So I just want to understand, is there something specific in Q1 weighing and it looks like there's a bit of an acceleration through the year afterwards year-on-year. Is that based off project conversion accelerating? Any thoughts around that, please?

Christian Rothe

Yes, Julian. So yes, we are talking about mid-single-digit growth organically, and that is, of course, taking out the impact of the Sensia dissolution that occurred. And so there is some seasonality, of course, that happens for us from Q4 into Q1, and then we go and grow from that point.

Nothing specifically to call out around anything that we see in the pipeline are project related that would dramatically change the view or what's happening around the sequential as we go through the year. So I think the way to think about it is that, again, it's just some modest changes from quarter-to-quarter. But broadly, it's -- we feel really good about how the year is shaping up for us.

Blake Moret

Yes. There's a certain amount of prudence at this point of the introduction of the guide. But hopefully, you're hearing the sentiment that customers are positive about their prospects going forward. We're hearing that from end users across multiple verticals and we're hearing it from machine builders as well. Their backlog is healthy, and this new innovation gives them opportunities to add value to their own offerings.

Julian Mitchell

That's helpful. And then just to put a finer point maybe on what you're seeing at the Logix platform. I think there was a mention of 25% growth recently on the prepared remarks. It looks like you're guiding, I suppose, software and control up high single digits and logic is probably similar to that given the ARR guide for the overall company. But maybe help us understand kind of where are we in that PLC or Logix cycle as you see it, how is the kind of inventories and sell in, sell out looking on that product, please?

Blake Moret

Sure. Well, you got the numbers right. 25% Logix growth in the fourth quarter. We're expecting Software & Control to be high single digits in fiscal year '27 with Logix in that ballpark. And this is underlying market demand as well as share growth. with our traditional offerings as well as the software that with Logix forms a control system, we think we've got the best in the business. And obviously, you'll see a lot of that in the next couple of weeks.

But in terms of positioning this, as we've talked about in the past, a number of units, the number of units have gone above pre-pandemic levels with respect to controllers, but there's still plenty of room to run in this respect. We don't see this impacted by any sort of restock or advanced buying, it's underlying demand, and it's broad-based across the traditional industries like automotive and food and beverage and life sciences and energy but also with the demand that we've talked about in semiconductor and e-commerce and warehouse and data center.

Operator

Next question comes from Nigel Coe from Wolfe Research.

Nigel Coe

Thanks for the details on the FY '27 guide. I thought it was interesting that we're seeing improving mining, chemical, end markets in '27. Just -- I'm guessing that's one of the reasons why you're seeing organic sales growth improving through the year. But maybe just talk about what you're seeing in those end markets and what gives you confidence that gets better there.

Blake Moret

Sure. So mining, we've talked before, we've got a really good readiness to serve in mining, particularly as the miners are moving to more autonomous operations, that's a great fit. And as I and members of the leadership team have had discussions with boards and C suite at the big miners, there really is a good fit with what we're doing and what they're trying to accomplish in terms of flexibility and throughput and safety and we're seeing that manifest itself in the funnel.

So a lot of the jobs that we're tracking and some of the wins that we have seen have a distinctly digital aspect to them. It's not just the traditional power control that's been a big part of that vertical penetration in the past. It's also as adding the things that Rockwell's uniquely position to do. And so that does inform some of the optimism that we're seeing, but it's backed up by tangible growth and funnel.

In chemical, that industry in general is, of course, under a lot of pressure from geopolitical volatility, pricing around the world and so on, we really focus on finished chemicals, pine chemicals versus bulk and so it's a segment of the market. And we do think that we're gaining share in that area as well. Again, we'll talk for years about plant [ PAX], And as we add AI capabilities to Logix and software around it that impacts plant PAX as well.

Nigel Coe

Okay. And then just on -- going back to the 1Q guide, Christian, I think incrementals a bit below the high 30s for 1Q. Maybe just correct me if I'm wrong there. And I'm assuming we've got sort of the worst comp on memory of the year there. So perhaps that's the reason. And my real question is, is memory just an inflation issue? Or are there leasing lead times, availability issues to think about as well?

Christian Rothe

Yes, sure. So you're right, when I went through my prepared comments, the incrementals, the organic incrementals for Rockwell in Q1 versus the prior year were at the mid-30s level. So you have that correct and absolutely, from an inflationary perspective, Q1 is going to be a more difficult quarter. And you brought up an important aspect around that, which is there's a difference.

There's a difference between what's happening on the inflationary side versus availability. And so on the inflationary side, memory is a really big driver for us, but it's really a broader drive on kind of a lot of the electrical components, and we talked a lot about what's happening in the demand environment around things that are impacted by data center and so that's why it's a little bit broader of a base there. But memory is from an inflation side, a bigger portion of it. From the component availability side, we're sitting actually pretty okay on the memory portion of it, but there's other electrical components, things like PCBs that are a little bit more difficult for us.

Now that being said, our team, the supply chain [indiscernible] chain organization has done a really good job of making sure that we've gotten ahead of this, that we're getting those components in. That doesn't mean that it's a one and done because we, of course, are using these, and these are a lot of the areas that we're getting some really good demand for our products. And so as we're depleting that inventory, we've got to make sure that we're putting it back into the funnel. So again, the team has done a good job. We're focused on trying to make sure that we're still in a position to keep on shipping and they've kept us in that place.

Operator

Our next question comes from Quinn Fredrickson from Baird.

Quinn Fredrickson

Blake, wondering if you could frame up how you're thinking about greenfield versus brownfield activity and broader CapEx release. Does the '27 outlook still contemplate some constraint around broader CapEx spend persists? Or do you see more of a broader release this year?

Blake Moret

Yes. We're not counting on a broadening of CapEx release in the guide. I think if we see more of that, that would push us more to the high end of the range of our revenue in the year. That being said, the new capacity reached a new high level mark in fiscal year '26, and we expect it to go still higher in '27.

[indiscernible] have asked me in the past, what inning do we think that we're in with respect to new capacity in the U.S. And I'd probably characterize it as around the fourth inning. So there's plenty ahead of us there. It's not necessarily greenfield. A lot of this is modernizations, new lines, retrofits in existing building envelopes, but there's still plenty of room to run, and we're winning at a high rate in those activities across multiple industries.

Quinn Fredrickson

That's helpful. And then you talked in an earlier question about ARR and some of the headwinds there, but it does look like you're expecting ARR growth to improve a bit to 7% from 5% this year. Could you just unpack which piece of the business specifically drive that acceleration? Is that principally just a better outlook in life cycle services? Or are there any pieces of your software ARR growth that also strengthened?

Blake Moret

Yes. I think we'll see improvement in both the software and the services element of ARR. For starters, the whole organization recognizes the importance of it. And we've done some things internally to underscore that as well as continuing to work on near-term business system enhancements that help reduce the friction in things like renewals and being able to make it easier for customers to do things across the portfolio of Rockwell offerings whether it's things that we've had for a long time or things that we've acquired in recent years.

So I think the business environment for demand for those offerings remains high, digital services, cloud native software like [ Plex and fix]. We continue to be very happy with the content and the value that comes from that. Now we just have to continue to work on simplifying the motion and making sure that we're getting what's due to us in those areas. And that's why we're optimistic about increasing the ARR in the coming year.

Operator

Our next question comes from Steve Tusa from Wells Fargo.

Charles Stephen Tusa

Can you just -- a lot of the questions have been asked, but I think it's really about kind of the top line trends. To end markets for you that don't necessarily define your company anymore, but are key auto and food and bev. Looking at the CapEx budgets, it's hard to see growth there. Can you maybe just talk about what's going on in those end markets for not necessarily the next 6 months, but for the next 12 months and beyond that, those are kind of been subdued but potentially could accelerate. Just curious what you're seeing there.

Blake Moret

Sure. Well, automotive, we have seen good growth in the most recent quarters, 15% in Q4, and we're expecting it to continue to be a good source of growth. We're seeing modernizations. We're seeing companies continue to balance their offering by going away from this headlong rush to all EV to building what customers want to buy, which includes internal combustion engine, propelled vehicles as well as hybrid vehicles. And those model changes are what drives more than anything else, our business there.

To be sure, there's still headwinds in that industry chief among them, uncertainty around tariffs, USMCA tariffs, Section 232 or maybe even a bigger issue for them right now. But we have a great offering. And as I talked about before, it's not just about the traditional PLCs and intelligent devices. We're selling more software into these customers into the tier suppliers as well as the brand OEMs and mobile robots. We had double-digit growth in the auto mobile robots and the single biggest serve vertical for automotive is automotive.

So the outlook looks good there both in terms of our offering as well as customers' needs to continue to evolve their offering and that's about 10% of our business. Food and beverage, about 20% of the business. CapEx has been subdued. Those companies are dealing with -- at the top of the list, driving cost out. They've been hit with continuing raw material cost, packaging and so on.

But that's not a bad thing for us because it's efficiency that we're helping them with. And broadening the types of applications that we're dealing with. In the past, we've talked a lot about confectionery, we're doing a lot with protein. And with obviously, GLP-1, that's more life sciences, but that's a great area of growth for us going forward.

It's going to change eating habits to some extent, but people are going to still want to eat and drink and they're going to want more choices in what they buy as more people enter the middle class. We've been talking about that for years and so we like where we're positioned there. It's just we're not seeing or counting on a sharp increase in CapEx in either of those verticals when we put the guide together. Christian, anything else there?

Christian Rothe

No, I think that's -- I think you summarized it really well.

Aijana Zellner

Julianne, we'll take one more question.

Operator

Certainly, our last question today comes from Joe O'Dea from Vertical Research.

Joseph O'Dea

Just wanted to get a little bit more color on the Intelligent Devices margin in the quarter. It was a particularly strong sequential incremental. And so anything with respect to pricing that occurred in the quarter makes productivity efforts and then bigger picture anything that's sort of underway in terms of some of the traction you're gaining on the margin expansion there.

Christian Rothe

Yes, sure. So I'll start, and then I think Blake will probably jump in with some comments. But the intelligent devices, yes, they did have a good quarter. And they're still below the long-term corridor that we had put in place of 22% to 24%, but having a 20% for the full year and coming in at 21.6% for the fourth quarter was a really good performance. As you mentioned, yes, we had some good benefit from pricing that occurred in the quarter.

The team has done a great job again on productivity the Intelligent Devices business is one of those areas that is going to be the largest -- it is our largest segment. So it's going to be the largest beneficiary of a lot of our productivity actions. A lot of that aligned really nicely. It didn't hurt that the auto AMR business turned to profitability in the fourth quarter as well. So that also took away a detriment to their segment margins that has been in place for the last couple of years. And again, good progress and good development within that business.

Blake Moret

Yes. And we expect to continue to work on the margins in that business, specifically with our auto AMRs, but across the portfolio, new product introductions help as well, being able to provide more value at lower cost is another piece of the equation and like Software & Control, they've picked up the pace there. And then I would just mention Cubic, the modular power control offering that we have continues to grow very well and very profitably.

Aijana Zellner

Great. That concludes this conference call. Thank you for joining us today.

Operator

At this time, you may disconnect. Thank you.