Rockwell Automation (ROK) quarterly earnings fall short of expectations, need to wait and see for order recovery
(Source=Rockwell Automation)
[알파경제=김민영 기자] The quarterly performance of Rockwell Automation (ROK, hereinafter referred to as Rockwell), a leading American company leading the field of industrial automation and digital transformation, fell short of market expectations.
According to NH Investment & Securities, Rockwell’s sales in the fourth quarter of fiscal 2024 (July-September) were $2.04 billion, a 20.6% decrease from the previous year, and operating profit was $410 million, a 28.4% decrease.
EPS (earnings per share) shrank by 19.9% to $2.09. Quarterly sales and EPS fell short of market consensus by 1.1% and 5.0%, respectively.
Sales by business sector decreased by 19.2% and 38.9% in the intelligent device (ID) and software & control (S&C) sectors, respectively, compared to the previous year, while the life cycle service (LS) sector increased by 2.9%.
Operating profit margin was 20.1%, down 2.2 percentage points compared to the same period last year. The assessment is that this is because profitability deteriorated due to decreased sales volume and negative product mix despite efforts to reduce incentives and reduce costs.
As guidance for FY2025, the company presented sales of $8.2 billion and adjusted EPS of $9.2, with an operating profit margin of 19.0% as the target.
Byeon Byeon-man, a researcher at NH Investment & Securities, said, “The United States is expected to see good performance starting in 2024, and a gradual recovery in demand is expected in Europe and Asia.”
Rockwell Automation stock diagnosis (Source = Choice Stock)
In fact, it is pointed out that there was excess inventory in the distribution network during 2024, and that this inventory adjustment affected the company’s product shipments.
Another cause for concern is the slowdown in end-user demand as we approach the end of the year.
By industry, strong demand continues in the data center, e-commerce, and warehouse automation sectors, but electric vehicle projects are delayed, and in the food & beverage and life science sectors, investment in new facilities is put on hold and investments are focused on improving existing facilities.
Researcher Byeon Byeon-man said, “Project delays and investment holds have appeared in the downstream industry,” and advised to wait and see for channel inventory adjustments and order recovery.
Reporter Kim Min-young of Alpha Economy (kimmy@alphabiz.co.kr)
