Rockwell Automation Inc. ROK is anticipated to witness a decline in revenues and earnings when it reports first-quarter fiscal 2025 results next week. 

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The Zacks Consensus Estimate for Rockwell Automation’s earnings has moved down over the past 60 days to $1.61 per share. The consensus mark implies a 21% plunge from the year-ago actual. The consensus estimate for revenues is pegged at $1.87 billion, indicating an 8.7% year-over-year decline.

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ROK’s Earnings Surprise History

Rockwell Automation’s earnings surpassed estimates thrice in the trailing four quarters and missed on the remaining occasion, the average surprise being 6.4%.

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What the Zacks Model Indicates for Rockwell Automation

Our proven model does not conclusively predict an earnings beat for Rockwell Automation 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 -0.46%. 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.

Factors Likely to Have Shaped ROK’s Q1 Performance

The manufacturing sector continued to experience weakness in the October-December quarter. This was evident from the Institute for Supply Management's manufacturing index remaining below the 50% level for the period, averaging 48.1%. Demand has been subdued as companies have been refraining from making capital investments.  While the New Orders Index initially contracted in October with a 47.1% reading, it inched up to 50.4% in November and 52.5% in December. The index averaged 50% in the quarter. 

Rockwell Automation reported negative 10% organic growth in fiscal 2024. The company noted a buildup of excess inventory among customers, particularly machine builders. Citing this, ROK stated that it does not expect a significant acceleration in order levels in fiscal 2025. Consequently, we do not expect the recent recovery in industry-wide order levels to translate into improved performance for Rockwell Automation in the first quarter of fiscal 2025. 

Our model predicts an organic sales decline of 7.4% 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 costs 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 revenues and elevated costs is anticipated to have led to the decline in its earnings in the quarter.

Expectations for Rockwell Automation’s Segments

We expect the Intelligent Devices segment’s fiscal first-quarter revenues to decline 11% year over year to $823 million. Our prediction for the segment’s operating profit is $110.7 million, indicating a year-over-year decrease of 26%.

Our model predicts the Software & Control segment’s sales to be $502 million, indicating a 17% decline from the prior year’s actual. The segment’s operating profit, currently pinned at $103 million, indicates a 32% plunge from the year-ago quarter’s figure.

We expect the Lifecycle Services segment’s sales to be $576 million, implying 10.5% growth from the prior-year period’s actual. The estimate for the segment’s operating profit is $78 million. The figure indicates a 43% surge from the year-ago quarter’s figure.

ROK Stock’s Price Performance

In the past year, Rockwell Automation’s shares have dipped 5.1% compared with the industry’s 27.1% decline.

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Stocks That Warrant a Look

Here are some companies with the right combination of elements to post an earnings beat in their upcoming releases.

Flowserve Corporation FLS is expected to release its fourth-quarter 2024 results soon. It has an Earnings ESP of +2.60% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FLS’ earnings is pegged at 77 cents per share, which indicates year-over-year growth of 13.2%. It has a trailing four-quarter average surprise of 10.8%.

Northwest Pipe Company NWPX, expected to release its fourth-quarter 2024 results soon, has an Earnings ESP of +9.49% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for Northwest Pipe’s fourth-quarter 2024 earnings is pegged at 91 cents per share, indicating year-over-year growth of 68.5%. It has a trailing four-quarter average surprise of 32.4%.

Allegion plc ALLE, expected to release earnings soon, currently has an Earnings ESP of +1.34% and a Zacks Rank of 3.

The consensus estimate for Allegion’s earnings for the fourth quarter of 2024 is pegged at $1.74 per share, indicating year-over-year growth of 3.6%. ALLE has a trailing four-quarter average surprise of 9.9%.

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