Rockwell Automation, Inc. (NYSE:ROK) stock fell Tuesday after the industrial automation company reported fiscal third-quarter results.

CEO Blake Moret said continued strength in semiconductor, data center and warehouse automation, along with improving demand in automotive and life sciences, drove growth across the business.

The company reported adjusted earnings of $3.49 per share, up 22% from a year earlier and above the analyst consensus estimate of $3.38. Revenue increased 8% year over year to $2.313 billion, beating estimates of $2.243 billion.

Organic sales rose 10%, while currency translation added 1% to sales. Organic annual recurring revenue (ARR) increased 6%.

Pre-tax income climbed to $470 million from $342 million a year earlier, and the pre-tax margin expanded to 20.3% from 16.0%.

Growth was supported by strong demand for products including POINT I/O and PowerFlex drives, as well as expansion in production logistics and software. The company also cited customer wins in the food and beverage and life sciences markets.

Rockwell said Lifecycle Services growth remained weak because of subdued capital spending in some industries. It also pointed to inflationary pressures and geopolitical uncertainty as ongoing challenges.

Margins, Cash Flow And Buybacks

Gross margin improved 70 basis points to 49.5%, helped by higher sales volume, a favorable product mix and benefits from the dissolution of the Sensia joint venture.

Enterprise operating margin expanded 280 basis points, including an estimated 40-basis-point benefit from the Sensia transaction.

The company repurchased $145 million of stock during the quarter and had about $1.2 billion remaining under its existing buyback authorization as of June 30.

Operating cash flow totaled $724 million, while free cash flow reached $654 million during the fiscal third quarter.

Segment Performance

Intelligent Devices revenue increased 12% to $1.1 billion, while segment operating margin improved to 20.0% from 18.8%, driven by favorable currency translation, higher sales volume and product mix.

Software & Control revenue climbed 19% to $751 million. Segment operating margin expanded to 34.8% from 31.6%, primarily due to higher sales volume.

Lifecycle Services revenue declined 12% to $482 million. Despite the sales decline, segment operating margin improved to 15.1% from 13.3%, aided by strong project execution and margin gains following the Sensia joint venture dissolution.

Outlook

Rockwell raised its fiscal 2026 adjusted EPS guidance to $13.00 to $13.30 from a prior range of $12.50 to $13.10. The new range brackets the analyst consensus estimate of $13.02.

The company also increased its fiscal 2026 sales outlook to $8.968 billion-$9.134 billion from its prior forecast of $8.759 billion-$9.093 billion. Analysts expect revenue of $8.974 billion.

Rockwell now expects fiscal 2026 organic sales growth of 7.5% to 9.5%, with a midpoint of 8.5%, 150 basis points higher than its previous forecast. The updated outlook includes about 150 basis points of favorable currency impact.

The company continues to expect mid-single-digit organic ARR growth and free cash flow conversion of 100%.

Management said fiscal 2026 pricing is expected to contribute about 250 basis points, including 100 basis points from tariff-related pricing and 150 basis points from underlying pricing. Tariffs are expected to have a neutral impact on earnings as pricing actions offset related costs.

Rockwell also expects to repurchase about $850 million of shares during fiscal 2026.

ROK Price Action: Rockwell Automation shares were down 7.00% at $447.32 at the time of publication on Tuesday, according to Benzinga Pro data.

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