In This Article:
Rockwell Automation Inc. ROK is anticipated to witness declines in sales and earnings when it reports second-quarter fiscal 2025 results on May 7, before the opening bell.
The Zacks Consensus Estimate for Rockwell Automation’s earnings has been unchanged in the past 60 days at $2.09 per share. The consensus mark implies a 16.4% plunge from the year-ago actual. The consensus estimate for sales is pegged at $1.96 billion, indicating a 7.6% year-over-year decline.
Image Source: Zacks Investment Research
ROK’s Earnings Surprise History
Rockwell Automation’s earnings beat the Zacks Consensus Estimates in the trailing four quarters, the average surprise being 15.3%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Image Source: Zacks Investment Research
What the Zacks Model Indicates for Rockwell Automation
Our proven model does not conclusively predict an earnings beat for ROK this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Rockwell Automation has an Earnings ESP of 0.00%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Have Shaped ROK’s Q2 Performance
Rockwell Automation reported negative 7.6% organic growth in first-quarter fiscal 2025. The company noted a buildup of excess inventory among customers, particularly machine builders. Citing this, ROK stated that it did not expect a significant acceleration in order levels in fiscal 2025.
Also, after a prolonged contraction, the Institute for Supply Management’s manufacturing index showed expansion in January and February with readings of 50.9% and 50.3%, respectively. But this recovery was short-lived, with the index slipping into contraction again in March with a reading of 49%.
The New Orders Index also contracted in March (registering 45.2%) for the second consecutive month after three consecutive months of expansion. The Index was down 3.4 percentage points from the February figure of 48.6%. This is the lowest reading since May 2023 (when it was 43.4%). Customers have been pulling in orders due to anxiety about continued tariffs and pricing pressures. The impacts of this trend are also likely to get reflected in ROK’s order levels in the quarter under review.
Our model, thus, predicts an organic sales decline of 5.7% for the quarter, which is the primary reason for the expected decline in its top line.
ROK has faced margin headwinds in recent quarters, including higher logistics prices due to increased energy prices and constrained air freight lanes. Additionally, increased spending on talent and growth, unfavorable mix, and currency are expected to have impacted its margins. The combination of lower sales and elevated costs is anticipated to have led to a decline in its earnings in the quarter.