Core Viewpoint - Rockwell Automation emphasizes the transformative potential of AI in reshaping industrial landscapes, highlighting China's unique advantages in leveraging AI capabilities through rich application scenarios and a complete industrial system [1][2]. Group 1: AI and Industrial Transformation - AI is identified as a core driver of new productivity, with the potential to significantly enhance industrial competitiveness during China's 14th Five-Year Plan [1]. - The demand for computing power is expected to rise alongside energy needs, but AI can also optimize energy consumption, contributing positively to carbon neutrality efforts [3][4]. - Rockwell Automation's survey indicates that 41% of manufacturers have adopted AI/ML technologies to address skill gaps and labor shortages, with 95% planning to invest in AI/ML within the next five years [6]. Group 2: Green Energy and Opportunities - China's energy transition is seen as a foundation for new productivity, with a focus on green energy sources that can support AI development [4][5]. - The country has abundant clean energy resources, particularly in the northwest, but the challenge lies in effectively utilizing and transmitting this energy [5]. - The integration of AI with energy systems presents significant business opportunities across the entire energy supply chain, from generation to distribution [2][4]. Group 3: Global Supply Chain and Market Dynamics - Despite global supply chain challenges, Chinese companies are accelerating their globalization efforts, leveraging their substantial industrial supply capacity [8]. - Rockwell Automation's collaboration with companies like Yichao Packaging illustrates the shift from traditional machinery to intelligent solutions, enhancing international competitiveness [8].

Core Insights - Rockwell Automation has showcased its innovative solutions at the China International Import Expo (CIIE) for five consecutive years, focusing on four key themes: digital intelligence, sustainability, technological innovation, and openness [2] - The company aims to leverage the CIIE platform to connect with a wide range of ecosystem partners, driving technological innovation from concept to large-scale development, thereby contributing to sustainable development [2] - The company plans to deepen its focus on sectors such as healthcare, transportation, technology, and energy, recognizing the growing demand driven by factors like aging population and environmental pressures [3] Company Strategy - Rockwell Automation emphasizes the importance of understanding market demands through resources accessed at the CIIE, enhancing its ability to connect industry needs with available resources [2] - The company is committed to facilitating cross-industry collaboration to advance the industrial chain towards higher-end, intelligent, and green solutions [2] - The company recognizes the global influence of the Chinese market and aims to integrate valuable global resources to enhance the value of Chinese industries on a worldwide scale [3] Industry Trends - The Chinese "14th Five-Year Plan" highlights the acceleration of new momentum in digital, green, and intelligent sectors, which aligns with Rockwell Automation's focus on new quality productivity [3] - The healthcare sector is identified as a significant area of growth, with the potential for industrial capabilities to be applied within hospital systems, reflecting a broader societal impact [3]

Core Insights - Rockwell Automation has showcased its innovative solutions at the China International Import Expo (CIIE) for five consecutive years, focusing on four key themes: digital intelligence, sustainability, scientific innovation, and openness [1][2] - The company aims to leverage the CIIE platform to connect with a wide range of ecosystem partners, driving technological innovation from concept to large-scale development [1] - Rockwell Automation emphasizes the importance of understanding market demands and resource connections to address industry and societal challenges for sustainable development [1][2] Industry Focus - The company is concentrating on sectors such as healthcare, transportation, technology, and energy, with a particular emphasis on the healthcare sector due to the increasing demand driven by aging populations and lifestyle factors [2] - The integration of industrial capabilities into healthcare systems is seen as a significant opportunity, as the demand in this sector is broader and has higher replicability compared to industrial scenarios [2] Strategic Vision - Rockwell Automation aligns its strategy with China's 14th Five-Year Plan, which aims to accelerate the development of new driving forces in digital, green, and intelligent sectors [2] - The company recognizes the global influence of the Chinese market and aims to enhance its layout to connect valuable resources worldwide, extending the reach of Chinese supply chains [2]

Rockwell Automation hitting an all-time high after better than expected sales growth for fiscal 2026. Earnings and revenue also came in higher than expectations. Rockwell also saying it is dissolving its joint venture with SLB.Joining us now exclusively is Rockwell Automation chairman and CEO Blake Morett. Blake, it's great to have you back on the program. Welcome.>> Great to be here. >> You know, uh, Wall Street really seeming to hone in on your guidance for 2026. What does it signal both about the company ...

Core Insights - Rockwell Automation Inc. reported adjusted earnings per share (EPS) of $3.34 for Q4 fiscal 2025, exceeding the Zacks Consensus Estimate of $2.94 and up from $2.53 in the prior-year quarter [1][9] - Total revenues for the quarter reached $2.32 billion, a 13.8% increase year over year, surpassing the Zacks Consensus Estimate of $2.21 billion [2][9] - The company expects reported sales growth of 3-7% and organic sales growth of 2-6% for fiscal 2026, with adjusted EPS projected between $11.20 and $12.20 [13] Financial Performance - Including one-time items, earnings were $1.23 per share in Q4, down from $2.09 in the prior-year quarter [2] - Gross profit increased by 21.1% year over year to $1.12 billion, with a gross margin of 48.4%, up from 45.5% in the previous year [3][9] - Selling, general and administrative expenses decreased by 2.9% year over year to $471 million, while consolidated segment operating income rose 27.1% to $520 million [4] Segment Performance - Intelligent Devices segment net sales were $1.09 billion, up 15% year over year, with operating earnings of $215 million [5] - Software & Control segment saw a 31% increase in net sales to $657 million, with operating earnings growing 83% to $205 million [6] - Lifecycle Services segment net sales decreased by 3% to $573 million, with operating earnings slightly down to $100 million [7] Annual Performance - For fiscal 2025, adjusted EPS was reported at $10.53, beating the Zacks Consensus Estimate of $9.96, with total revenues of $8.34 billion, a 0.9% increase from fiscal 2024 [8][10] - Cash flow from operations for the year was $1.54 billion, significantly up from $0.86 billion in the prior year [11] Shareholder Actions - In fiscal 2025, the company repurchased 1.5 million shares for $419 million, with $927 million remaining under the existing share-repurchase authorization [12] Strategic Developments - Rockwell Automation announced the dissolution of its Sensia joint venture, planning to regain ownership of the process automation business previously contributed to Sensia [14] Market Performance - Over the past year, Rockwell Automation shares have increased by 25.5%, outperforming the industry growth of 24.3% [15]

Market Overview - Technology stocks are significantly impacting the market, with Nvidia down 2.4%, Microsoft down 1.9%, and Amazon down 2.6% [1][11] - The S&P 500 dropped 1%, the Dow Jones Industrial Average fell 449 points (1%), and the Nasdaq composite fell 1.6% [11] Corporate Earnings - Corporate earnings and forecasts are under scrutiny, providing insights into the economy amidst limited information due to the government shutdown [2][7] - DoorDash experienced a sharp decline of 15.1% after announcing increased spending on product development [3][11] - Datadog's stock surged 21.1% following earnings that exceeded analysts' expectations, while Rockwell Automation rose 4.8% for similar reasons [3][11] Economic Context - The ongoing U.S. government shutdown is affecting various sectors, including airlines, which are facing staffing issues leading to a 10% reduction in air traffic across 40 high-volume markets [8][12] - Major indexes have had a record-setting year, raising concerns about potential overvaluation, particularly among large technology companies [6][11] Treasury Yields - Treasury yields have decreased, with the 10-year Treasury yield falling to 4.09% from 4.16% and the two-year Treasury yield dropping to 3.56% from 3.63% [9][12] Summary of Key Companies - American Airlines fell 2.4%, Delta Air Lines dropped 1.8%, and United Airlines decreased by 2.7% due to the impact of the government shutdown [8][12]

Core Insights - The article discusses the expertise of a senior analyst and private portfolio manager with over 10 years of experience in generating value ideas in European and North American markets [1] Group 1: Analyst Profile - The analyst is a contributing author and analyst for the investing group iREIT®+HOYA Capital and Wide Moat Research LLC, covering various European markets including Scandinavia, Germany, France, UK, Italy, Spain, Portugal, and Eastern Europe [1] - The focus is on identifying reasonably valued stock ideas within these markets [1] Group 2: Investment Considerations - The article emphasizes the importance of conducting due diligence and research prior to any investment, particularly in short-term trading, options trading, and futures trading, which are noted as potentially extremely risky [2] - It highlights that investing in European and non-US stocks may involve specific withholding tax risks related to the company's domicile and the investor's personal situation [2]

Core Insights - The article discusses the expertise of a senior analyst and private portfolio manager with over 10 years of experience in generating value ideas in European and North American markets [1] Group 1: Analyst Background - The analyst is a contributing author and analyst for the investing group iREIT®+HOYA Capital and Wide Moat Research LLC, covering various European markets including Scandinavia, Germany, France, UK, Italy, Spain, Portugal, and Eastern Europe [1] Group 2: Investment Focus - The analyst focuses on identifying reasonably valued stock ideas within the U.S. and European markets [1]

Financial Data and Key Metrics Changes - The company reported a 14% year-over-year increase in sales for Q4, exceeding expectations, with about 1% growth attributed to currency effects and 4% from price increases [29][30] - Adjusted EPS for Q4 was $3.34, above expectations, driven by revenue outperformance and favorable pricing [30] - For the full year fiscal 2025, reported and organic sales increased by 1% to $8.3 billion, with adjusted EPS of $10.53, reflecting a 7% increase [33] Business Line Data and Key Metrics Changes - Intelligent devices segment saw a 14% year-over-year organic sales growth, driven by strong performance in power control and the CUBIC acquisition [9][10] - Software and control segment experienced a 30% year-over-year organic sales growth, with a margin increase of 880 basis points [30] - Lifecycle services segment reported a 4% decline in organic sales, with a book-to-bill ratio of 0.9, consistent with historical Q4 seasonality [11] Market Data and Key Metrics Changes - North America was the best-performing region, with expectations to remain strong in fiscal 2026, supported by a $2 billion investment over five years [19] - The discrete market saw a 20% year-over-year sales increase, particularly in e-commerce and warehouse automation, with automotive sales also exceeding expectations [15] - The process segment grew 10% year-over-year, with customers focusing on efficiency amid weaker demand and low commodity prices [18] Company Strategy and Development Direction - The company is focused on cost reduction and margin expansion, with a target of over 100 basis points margin improvement in fiscal 2026 [21] - Plans to streamline operations and enhance efficiency to deliver customer value and expand margins were highlighted [6][12] - The dissolution of the Sensia joint venture is expected to lead to lower revenue but higher operating margins, with a commitment to grow in the Oil and Gas market [12][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to gain market share and expand margins despite uncertainties in the macroeconomic environment [20][21] - The company anticipates reported sales growth in the range of 3%-7% for fiscal 2026, with a sequential sales decline expected in Q1 [20][21] - Management noted that increased stability in trade policy could unlock additional capital spending [20] Other Important Information - Free cash flow conversion for the year was 114%, with a record $1.4 billion in free cash flow [28] - The company made a voluntary $70 million contribution to its U.S. pension plan in Q4 [27] - Adjusted effective tax rate for Q4 was about 18%, up from 15% the previous year [30] Q&A Session Summary Question: What was the postmortem of the Sensia joint venture? - Management indicated that the joint venture faced challenges due to its broad scope and the impact of COVID-19 on energy markets, leading to a decision to simplify operations by dissolving the JV [46][48] Question: Can you provide insight into Logix volumes relative to pre-COVID levels? - Management noted that Logix unit volumes touched pre-COVID levels in the back half of the year, with expectations to return to and exceed those levels in fiscal 2026 [60][62] Question: What is the outlook for book-to-bill ratios moving forward? - Management expects the book-to-bill ratio to remain close to one, with gradual improvement anticipated in capital expenditure projects [70][72] Question: How does the company plan to achieve its margin targets? - Management emphasized ongoing cost reduction and productivity initiatives, with a focus on achieving the current margin target of 23.5% before considering new targets [95][98] Question: What level of inflation was observed in the quarter? - Management reported that inflation was relatively modest, with ongoing cost reduction efforts helping to offset inflationary pressures [103]

Financial Data and Key Metrics Changes - The company reported a 14% year-over-year increase in sales for Q4, exceeding expectations, with organic growth driven by price increases and favorable currency effects [28][30] - Adjusted EPS for Q4 was $3.34, above expectations, primarily due to revenue outperformance and better segment mix [30] - For the full year fiscal 2025, reported and organic sales increased by 1% to $8.3 billion, with adjusted EPS of $10.53, reflecting a 7% increase [33] Business Line Data and Key Metrics Changes - Intelligent devices segment saw a 14% year-over-year organic sales growth, driven by strong performance in power control and autonomous mobile robots [9][10] - Software and control segment experienced a 30% year-over-year organic sales growth, with significant contributions from the Logix business [10][31] - Lifecycle services segment reported a 4% decline in organic sales, with a book-to-bill ratio of 0.9, consistent with historical Q4 seasonality [11][31] Market Data and Key Metrics Changes - North America was the best-performing region, with expectations for continued strength in fiscal 2026 [17][18] - The discrete market saw a 20% year-over-year sales increase, particularly in e-commerce and warehouse automation, which grew over 70% [14][15] - The process segment grew 10% year-over-year, with customers focusing on efficiency amid weaker demand [17] Company Strategy and Development Direction - The company is focused on cost reduction and margin expansion, with a target of over 100 basis points margin improvement for fiscal 2026 [19][21] - Plans to increase investments in plant and digital infrastructure, targeting capital expenditures of about 3% of sales [35] - The dissolution of the Sensia joint venture is expected to simplify operations and improve profitability in the oil and gas vertical [12][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to gain market share and expand margins despite uncertainties in the macroeconomic environment [19][20] - The company anticipates reported sales growth for fiscal 2026 to be in the range of 3%-7%, with a sequential decline expected in Q1 [19][20] - Annual recurring revenue is projected to grow in the high single digits for the upcoming year [20] Other Important Information - The company achieved a free cash flow conversion of 114% for the year, with free cash flow reaching a record $1.4 billion [28][30] - A one-time pre-tax charge of $136 million related to legacy asbestos exposure was recorded in Q4, impacting adjusted EPS [25][26] - The introduction of a new engineering and development expense line aims to enhance visibility into key metrics and improve gross margin reporting [24] Q&A Session Summary Question: What was the postmortem of the Sensia joint venture? - Management indicated that the joint venture faced challenges due to its broad scope and the impact of COVID-19 on energy markets, leading to a decision to dissolve it for simplification and improved profitability [45][46] Question: What is the outlook for Logix volumes relative to pre-COVID levels? - Management noted that Logix unit volumes are expected to return to pre-COVID levels in fiscal 2026, with strong market growth anticipated [58][60] Question: What is the current book-to-bill ratio and outlook for larger CapEx projects? - Management confirmed that the book-to-bill ratio is close to one time, with expectations for gradual improvement in capital spending as projects are delayed [67][68] Question: What level of inflation was experienced in the quarter? - Inflation was described as relatively modest, with ongoing cost reduction measures helping to offset its impact [98] Question: What is the pricing outlook for fiscal 2026? - Management expects a 1% underlying price increase and 1% from tariff-based pricing, emphasizing the importance of maintaining a balanced pricing approach [82][83]