Rockwell Automation, Inc. (NYSE:ROK) stock plunged on Wednesday after it reported its third quarter fiscal 2025 results, delivering revenue and adjusted earnings per share ahead of analyst expectations.
The company posted adjusted EPS of $2.82, beating the consensus estimate of $2.66. Total sales were $2.144 billion, up 5% from $2.051 billion in the prior year, exceeding the $2.07 billion estimate.
GAAP diluted EPS was $2.60, an increase of 29% year over year. Annual recurring revenue (ARR) grew 7% year over year, while the book-to-bill ratio remained at approximately 1.0, in line with historical norms.
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Intelligent Devices segment sales were $968 million, up 1% year over year on an organic basis. Segment operating margin was 18.8%, down from 20.2% in the prior year, driven by higher compensation and unfavorable currency, partially offset by productivity and price realization.
Software & Control segment sales grew 23% year over year to $629 million, or 22% on an organic basis. Segment operating margin increased to 31.6% from 23.6%, primarily due to higher volume, price realization, and productivity, partially offset by higher compensation.
Lifecycle Services sales were $547 million, a 6% decline year over year on an organic basis. The segment’s operating margin declined to 13.3% from 19.3%, reflecting lower volume and higher compensation, partially offset by productivity.
Income before income taxes was $342 million, up from $255 million in the prior year, and pre-tax margin increased to 16.0% from 12.4%, primarily due to the absence of prior-year restructuring charges.
During the quarter, Rockwell Automation repurchased ~0.5 million shares for $123 million. As of June 30, 2025, the company had approximately $1.0 billion remaining under its existing share repurchase authorization.
Return on invested capital (ROIC) for the twelve months ending June 30, 2025, was 15.0%, compared to 16.0% for the prior twelve months.
The company generated $527 million in cash from operations and $489 million in free cash flow, up from $279 million and $238 million, respectively, in the third quarter of fiscal 2024.
Chairman and CEO Blake Moret commented, “We are increasing our adjusted EPS outlook as we continue to outperform on our productivity and margin targets. Our expectations for fiscal 2025 customer spend and our topline growth remain largely unchanged with the exception of a slight benefit from tariff-based pricing and favorable currency. Even in this uncertain environment, our team is not waiting for macro-economic improvement to play offense. We are delivering customer value and expanding margins.”
Outlook
Rockwell Automation raised its fiscal 2025 adjusted EPS guidance from $9.20–$10.20 to $9.80–$10.20, compared to the $9.82 consensus estimate.
Reported sales growth guidance was raised from approximately $8.1 billion to approximately $8.2 billion, versus the prior $8.128 billion estimate. Organic sales growth is now expected to be between (2)% and 1%, unchanged from the previous outlook.
Price Action: ROK shares were down 9.13% at $314.22 at the last check on Wednesday.
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