Rockwell Automation results top estimates, annual forecast lags
By Aatreyee Dasgupta
Feb 5 (Reuters) - Rockwell Automation ROK.N on Thursday posted strong first-quarter profit and sales, as sustained industrial demand buoyed its topline and cost saving measures helped boost margins, but the midpoint of its narrowed full-year profit forecast range was below Wall Street estimates.
The company also reiterated the midpoint of its annual sales forecast at about $8.8 billion, which TD Cowen analysts in a research note said, "implies significant deceleration in H2 across discrete, hybrid, and process (automation manufacturing)."
Shares of the industrial automation maker fell nearly 8% during morning trading.
"The macro environment remains fluid with heightened geopolitical uncertainty around trade, regional conflict, and supply chain risk," CEO Blake Moret said during the quarterly earnings call.
While the Milwaukee, Wisconsin-based company's cost-savings measures helped offset the impact of the Trump administration's global tariffs, cost concerns in the current inflationary environment remain.
"Tariffs did not have a meaningful impact on total company earnings, but they were a drag of about 30 basis points on segment margins year over year," said CFO Christian Rothe.
Total segment operating margin for the first quarter increased to 20.7%, from 17.1% a year ago, on positive price and cost fundamentals from improved productivity and higher sales of more profitable items.
The company lifted the lower end of its adjusted profit forecast for 2026 to between $11.40 and $12.20 per share, compared with its previous view of $11.20 to $12.20 per share.
The midpoint of the new forecast comes 22 cents below analysts' estimate of $12.02 per share, according to data compiled by LSEG.
Rockwell continued to benefit from U.S. businesses reshoring manufacturing, as well as, from the ramp-up in investment in automation technologies as companies overhaul their production floors and lean towards AI adoption.
On an adjusted basis, Rockwell's quarterly profit rose about 49% from a year ago to $2.75 per share. Analysts' estimated $2.46 per share.
Total sales rose by nearly 12% to $2.11 billion in the quarter ended December 31.
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