Why Rockwell Automation Shares Are Diving Today

Zinger Key Points
  • Rockwell Automation reports sales of $2.05B, falling short of the consensus, with adjusted EPS at $2.04, missing estimates.
  • Rockwell expects modest EPS growth weighted to H2 of the year as orders continue to rebound.

Rockwell Automation Inc ROK shares are trading lower after it reported first-quarter FY24 results below Street expectations.

Sales grew 3.6% Y/Y to $2.05 billion, missing the consensus of $2.099 billion. Organic sales increased by 1.0% Y/Y in the quarter.

Total ARR grew 20% Y/Y, and organic ARR rose 18% Y/Y in the quarter. Adjusted EPS of $2.04 missed the analyst consensus of $2.64.

Segment Details: Intelligent Devices sales declined 1.0% Y/Y to $927 million, Software & Control rose 5.3% Y/Y to $604 million, and Lifecycle Services climbed 10.5% to $521 million.

Total segment operating earnings were $356 million in the first quarter of fiscal 2024, down 11.3% Y/Y. Total segment operating margin was 17.3% compared to 20.2% a year ago.

The company held $439.5 million in cash and cash equivalents as of December 31, 2023. 

FY24 Outlook: Rockwell reaffirmed adjusted EPS of $12.00 – $13.50 (vs. consensus of $12.89), with reported sales growth guidance of 0.5% – 6.5% and organic sales growth of (2.0)% – 4.0%.

Blake Moret, Chairman and CEO said, “High levels of channel inventory and some lingering supply chain constraints continue to impact the timing of product shipments, but underlying conditions remain positive.”

“We continue to expect low-single-digit topline growth in FY24, with modest EPS growth weighted to the second half of the year as orders continue to rebound.”

Price Action: ROK shares are down 14.55% at $262.52 on the last check Wednesday.

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