### Rockwell Automation Reports Third Quarter Fiscal 2024 Financial Results

### Rockwell Automation Reports Third Quarter Fiscal 2024 Financial Results Rockwell Automation, Inc (NYSE: ROK) today reported its financial results for the third quarter of fiscal 2024, ending June 30, 2024. #### Key Financial Metrics | Metric | Q3 FY 2024 | Q3 FY 2023 | Year-over-Year Change (%) | Wall Street Consensus Estimates (Q3 FY 2024) | |-----------------------------|-----------------|-----------------|---------------------------|----------------------------------------------| | Total Revenue | $2.051B | $2.239B | -8.4% | $2.06B | | Diluted EPS | $2.02 | $3.45 | -41.4% | $2.08 | | Adjusted EPS | $2.71 | $3.01 | -10.0% | | | Pre-tax Margin | 12.4% | 21.1% | -8.7 percentage points | | | Net Income | $232M | $400M | -42.0% | | **Interpretation:** Rockwell Automation's financial performance shows a notable decline in year-over-year revenue (-8.4%) and diluted EPS (-41.4%), largely attributable to lower sales volume and restructuring charges. Adjusted EPS also saw a decrease but managed to perform better than expected, considering the tight market conditions. #### Revenue Performance Across Major Segments | Segment | Q3 FY 2024 Revenue | Q3 FY 2023 Revenue | Year-over-Year Change (%) | Segment Operating Margin (Q3 FY 2024) | Segment Operating Margin (Q3 FY 2023) | |----------------------|--------------------|--------------------|---------------------------|---------------------------------------|---------------------------------------| | Intelligent Devices | $957M | $968M | -1.1% | 20.2% | 16.8% | | Software & Control | $512M | $751M | -31.8% | 23.6% | 34.8% | | Lifecycle Services | $581M | $520M | +11.8% | 19.3% | 9.3% | **Interpretation:** The Intelligent Devices segment saw a slight decline in revenue (-1.1%). Software & Control faced significant pressure, with revenue down by 31.8%, leading to a reduced operating margin. Conversely, Lifecycle Services displayed strong growth with an 11.8% increase in revenue and substantial margin improvement due to better project execution and lower incentive compensation. #### Key Operational Data | Metric | Q3 FY 2024 | Q3 FY 2023 | |-----------------------------------|----------------|----------------| | Total ARR Growth | +17% | | | Organic ARR Growth | +14% | | | Free Cash Flow | $238M | $240M | | Free Cash Flow Conversion | 87.8% | 88.4% | | ROIC | 16.0% | 20.9% | | Corporate and Other Expenses | $28.6M | $32.3M | #### Comments from Company Officers "Rockwell delivered another quarter of good execution with sales, margin, and EPS all above our expectations. While we saw progress on inventory de-stocking at our distributors and machine builders in Q3, our low-single-digit sequential growth in orders was lower than we expected," said Blake Moret, Chairman and CEO. Moret attributed project delays to weaker consumer demand, high-interest rates, and policy uncertainty. #### Dividends/Share Repurchase Program During the third quarter, Rockwell repurchased approximately 0.6 million shares of its common stock at a cost of $161.2 million. Approximately $0.5 billion remains available under the existing share repurchase authorization. #### Forward Guidance Rockwell updated its fiscal 2024 guidance as follows: - Reported sales growth target: ~ (8.5)% - Organic sales growth target: ~ (10.0)% - Diluted EPS guidance target: ~$8.32 - Adjusted EPS guidance target: ~$9.60 #### Stock Price Movement After the earnings release, Rockwell Automation's stock price experienced a decline of approximately 2.1%. This comprehensive financial overview highlights Rockwell Automation's performance amidst challenging market conditions, reflecting both their strategic execution and areas requiring attention moving forward.