What you'll learn:
- In the three months that ended Dec. 31, customers placed 10% more orders than they did a year ago.
- Many of the new orders will turn into revenues for Rockwell in the coming quarters.
- Rockwell’s profits last quarter totaled $178 million compared to $213 million a year earlier.
Orders at Rockwell Automation Inc. rose faster than expected in the company’s last quarter to more than $2 billion, providing a solid signal that the manufacturing sector is preparing to grow after two years in the doldrums.
“We believe our order outperformance reflects true underlying demand, based on the broad geographic outperformance, balanced mix of hardware, software, and solutions orders, and the fact that distributor and machine-builder inventories continue to reduce,” CEO Blake Moret told analysts and investors on a Feb. 10 conference call.
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In the three months that ended Dec. 31, customers placed 10% more orders with Milwaukee-based Rockwell than they did a year ago; gains versus the previous quarter were in the mid-single digits.
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Moret called out customers in the food and beverage and home and personal care industries as being active and pointed to strong growth from e-commerce and warehouse companies looking for automation products. Growth in those areas helped offset drops from automotive and semiconductor manufacturers.
Many of the new orders will turn into revenues for Rockwell in the coming quarters, and Moret and Rothe are sticking to their organic sales growth forecast from three months ago, when they were calling for a flat top line.
Fellow Endeavor Business Media publication IndustryWeek has recently written about the earnings reports and commentary from other industrial executive teams:
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For the last three months of 2024, sales came in at nearly $1.9 billion, down 8.5% from the same period a year before when the company was still working through a large backlog. Rockwell’s profits last quarter totaled $178 million compared to $213 million a year earlier.
The order upswing at Rockwell provides another data point suggesting the industrial sector will put up a better 2025 after tightening the purse strings in 2024.
Analysts at Bank of America Global Research last week said their latest capital spending calculations showed the industrial companies had cut outlays by 10% from 2023. But a post-election bump in sentiment and upbeat commentary about orders from key players such as 3M Co. and fellow automation player Emerson Electric Co. (see the sidebar) suggest better things ahead this year.
See also: Rockwell leaders see more near-term softness, slow build well into 2025
Shares of Rockwell (Ticker: ROK) jumped more than 12% to about $302 on its leaders’ earnings report and conference call. The move brought them back to their December intraday high and grew Rockwell’s market capitalization to about $34.2 billion.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than 25 years of business journalism experience and writes about public companies, markets and economic trends for Endeavor Business Media publications IndustryWeek, FleetOwner, Oil & Gas Journal, T&D World and Healthcare Innovation. He also curates the twice-monthly Market Moves newsletter that showcases Endeavor stories on strategy, leadership and investment.
With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati, initially covering retail and the courts before shifting to banking, insurance and investing. He later was managing editor and editor of the Nashville Business Journal before being named editor of the Nashville Post in early 2008. There, he oversaw the Post's online and print products, helped plan and produce events and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.