Al Root
Rockwell Automation reported better-than-expected earnings and raised its forecast of full-year profits regardless of the uncertainty tariffs have brought to the economy. The stock took off.
Wednesday morning, the automation technology provider announced fiscal second-quarter earnings per share of $2.45 from sales of $2 billion. Wall Street was looking for EPS of $2.10 and sales of just under $2 billion, according to FactSet.
A year ago, Rockwell delivered EPS and sales of $2.47 and $2.1 billion, respectively. Sales have declined year over year for five consecutive quarters as a result of sluggish U.S. manufacturing activity.
Rockwell still expects fiscal 2025 sales to fall about 1% year over year, but it now expects EPS to land between $9.20 and $10.20, compared with an earlier call of $8.60 to $9.80. The midpoint of the new range, $9.70, is 50 cents higher than the old midpoint, while earnings for the latest quarter exceeded expectations by 35 cents.
That implies management didn't simply raise the forecast to reflect a strong quarter, but expects continued good times.
Shares were up almost 11%% in early trading at $280, while S&P 500 and Dow Jones Industrial Average futures were up 0.4% and 0.5%, respectively.
It looks like a solid print. "We saw a healthy intake of orders across most of our lines of business, with total company book-to-bill in line with our historical average of about 1.0," said CEO Blake Moret in a news release. "We also continue to add resiliency to our operations as we navigate a highly dynamic environment."
Tariffs are a major factor making the environment dynamic. Rockwell could raise prices to offset higher costs, but its new financial guidance didn't reflect that. The company intends to offset the effects of tariffs with a mix of price increases and cost cuts.
The fact that guidance went up despite tariffs is a positive for investors.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 07, 2025 09:38 ET (13:38 GMT)
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