Rockwell Automation, Inc. reported second quarter fiscal 2025 results.
"Rockwell delivered another quarter of strong operating performance with sales, margins, and EPS all above our expectations. We saw a healthy intake of orders across most of our lines of business, with total company book-to-bill in-line with our historical average of about 1.0. We also continue to add resiliency to our operations as we navigate a highly dynamic environment. I’m proud of how our employees and partners are working together to position Rockwell as the automation leader of choice for our customers in the U.S. and around the world," said Blake Moret, Chairman and CEO.
Fiscal Q2 2025 Financial Results
Fiscal 2025 second quarter reported sales were $2,001 million, down (6)% from $2,126 million in the second quarter of fiscal 2024. Organic sales decreased (4)% and currency translation decreased sales by (2)%.
Income before income taxes was $299 million in the second quarter of fiscal 2025 compared to $310 million in the same period last year. Pre-tax margin was 14.9% in the second quarter of fiscal 2025 compared to 14.6% in the same period last year. Total segment operating earnings were $408 million in the second quarter of fiscal 2025, up 1% from $404 million in the same period of fiscal 2024. Total segment operating margin was 20.4% compared to 19.0% a year ago. The increase in segment operating margin was primarily due to the benefits from cost reduction and margin expansion actions and positive price/cost, partially offset by higher compensation and lower sales volume.
Fiscal 2025 second quarter Net income attributable to Rockwell Automation was $252 million or $2.22 per share, compared to $266 million or $2.31 per share in the second quarter of fiscal 2024. Fiscal 2025 second quarter adjusted EPS was $2.45, down (2)% compared to $2.50 in the second quarter of fiscal 2024.
Cash flow generated by operating activities in the second quarter of fiscal 2025 was $199 million, compared to $120 million in the second quarter of fiscal 2024. Free cash flow in the second quarter of fiscal 2025 was $171 million, compared to $69 million in the same period last year. Increases in cash flow provided by operating activities and free cash flow were primarily due to lower tax payments, partially offset by higher working capital.
Fiscal Year 2025 Outlook
The table below provides updated guidance for fiscal 2025. Due to the dynamic nature of the tariff environment, the Company has not adjusted its full-year guidance for organic sales, which could increase as a result of tariff-based price realization. Rockwell intends to offset existing and any additional tariff cost through a combination of pricing and supply chain actions, which is incorporated in the EPS guidance.
|
Updated Guidance |
Prior Guidance |
|
|
Reported sales midpoint |
~$8.1B |
~$8.1B |
|
Organic sales growth(1) |
(4)% - 2% |
(4)% - 2% |
|
Inorganic sales growth |
~ 0% |
~ 0% |
|
Currency translation |
~ (0.5)% |
~ (1.5)% |
|
Reported sales growth |
(4.5)% - 1.5% |
(5.5)% - 0.5% |
|
Diluted EPS |
$8.23 - $9.23 |
$7.65 - $8.85 |
|
Adjusted EPS(1) |
$9.20 - $10.20 |
$8.60- $9.80 |
|
(1) |
Organic sales growth and Adjusted EPS are non-GAAP measures. See Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate Reconciliation for more information on these non-GAAP measures. |
"We are raising fiscal year 2025 margin and EPS targets based on strong execution, with clear focus defined by the Rockwell Operating Model. Structural productivity is helping us expand our margins and invest for the future, even against the backdrop of current uncertainty. Given our significant homefield advantage, Rockwell is uniquely positioned to deliver value from increased manufacturing and digital transformation investments in the U.S.,” Moret continued.
Following is a discussion of second quarter results for our business segments.
Intelligent Devices
Intelligent Devices second quarter fiscal 2025 sales were $896 million, a decrease of (8)% compared to $974 million in the same period last year. Organic sales decreased (6)% and currency translation decreased sales by (2)%. Segment operating earnings were $159 million compared to $161 million in the same period last year. Segment operating margin increased to 17.7% from 16.5% a year ago. The increase from prior year was driven by the benefits from cost reduction and margin expansion actions, positive price/cost, and favorable mix, partially offset by higher compensation and lower sales volume.
Software & Control
Software & Control second quarter fiscal 2025 sales were $568 million, a decrease of less than 1% compared to $569 million in the same period last year. Organic sales increased 2% and currency translation decreased sales by (2)%. Segment operating earnings were $171 million compared to $146 million in the same period last year. Segment operating margin increased to 30.1% from 25.7% a year ago. The increase from prior year was driven by the benefits from cost reduction and margin expansion actions and positive price/cost, partially offset by higher compensation.
Lifecycle Services
Lifecycle Services second quarter fiscal 2025 sales were $537 million, a decrease of (8)% compared to $583 million in the same period last year. Organic sales decreased (6)% and currency translation decreased sales by (2)%. Segment operating earnings were $78 million compared to $97 million in the same period last year. Segment operating margin was 14.5% compared to 16.6% a year ago driven by higher compensation and lower sales volume, partially offset by the benefits from cost reduction and margin expansion actions and strong project execution.
Supplemental Information
ARR - Total ARR grew 8% compared to the end of the second quarter of fiscal 2024.
Corporate and other - Fiscal 2025 second quarter Corporate and other expense was $33 million compared to $28 million in the second quarter of fiscal 2024.
Purchase accounting depreciation and amortization - Fiscal 2025 second quarter Purchase accounting depreciation and amortization expense was $36 million, down $1 million from the second quarter of fiscal 2024.
Tax - On a GAAP basis, the effective tax rate in the second quarter of fiscal 2025 was 17.1% compared to 14.5% in the second quarter of fiscal 2024. The adjusted effective tax rate for the second quarter of fiscal 2025 was 17.7% compared to 14.8% in the prior year. These increases were primarily due to lower discrete benefits recognized in the current year partially offset by a favorable geographic mix of pre-tax income.
Share repurchases - During the second quarter of fiscal 2025, the Company repurchased approximately 0.5 million shares of its common stock at a cost of $129 million. At March 31, 2025, approximately $1.1 billion remained available under our existing share repurchase authorizations.
Return on Invested Capital (ROIC) - ROIC was 14.2% for the twelve months ended March 31, 2025, compared to 18.0% for the twelve months ended March 31, 2024. The decrease is primarily driven by lower pre-tax net income, partially offset by a lower effective tax rate.
Conference Call
A conference call to discuss the quarterly results will be held at 8:30 a.m. Eastern Time on May 7, 2025. The call will be an audio webcast and accessible on the Rockwell Automation website (www.rockwellautomation.com/en-us/investors.html). Presentation materials will also be available on the website prior to the call.
Interested parties can access the conference call by using the following numbers: (888) 330-2022 in U.S.; (365) 977-0051 in Canada; +1 (646) 960-0690 for other countries. Use the following passcode: 5499533. Please call in 10 minutes prior to the start of the call.
Both the presentation materials and a replay of the call will be available on the Investor Relations section of the Rockwell Automation website through June 7, 2025.
