Rockwell Automation(ROK) - 2025 Q1 - Quarterly Report

Sales Performance - Total sales for the three months ended December 31, 2024, were $1,881 million, a decrease of 8.4$806 million, down from 927 million, while the Software & Control segment saw sales drop to 529 million from $604 million[113]. - Lifecycle Services segment sales increased to$546 million from $521 million, reflecting a growth of 4.8$1,150 million, reflecting an 8% decrease year over year, while Latin America saw a 5% increase in sales[115]. - Intelligent Devices sales decreased by 13% year over year, with organic sales down by 12% for the three months ended December 31, 2024[122]. - Software & Control sales decreased by 12% year over year, with reported sales declining in all regions for the three months ended December 31, 2024[124]. - Lifecycle Services sales increased by 5% year over year, with organic sales also up by 5% for the three months ended December 31, 2024[126]. - Reported sales for the three months ended December 31, 2024, totaled $1.881 billion, down from$2.052 billion in the same period of 2023, reflecting a decrease of approximately 8.3%[150]. - Organic sales for North America were $1.151 billion for the three months ended December 31, 2024, compared to$1.247 billion in the same period of 2023, indicating a decline of about 7.7%[150]. Financial Performance - Net income attributable to Rockwell Automation for the three months ended December 31, 2024, was $184 million, compared to$215 million in the same period of 2023[113]. - Diluted EPS for the quarter was $1.61, down from$1.86 year over year, while adjusted EPS was $1.83 compared to$2.04[113]. - The total segment operating margin for the quarter was 17.1%, slightly down from 17.3% in the previous year[113]. - Total segment operating earnings decreased by 9.8% year over year for the three months ended December 31, 2024, primarily due to lower sales volume[118]. - Net income attributable to Rockwell Automation for the first quarter of 2025 was $184 million, or$1.61 per share, down from $215 million, or$1.86 per share in the first quarter of 2024[121]. - Segment operating margin for Intelligent Devices decreased to 14.9% from 16.2% year over year, while Software & Control margin increased to 25.1% from 25.0%[123][125]. Cash Flow and Financing - Cash provided by operating activities was $364 million for the three months ended December 31, 2024, compared to$33 million for the same period in 2023[135]. - Free cash flow was $293 million for the three months ended December 31, 2024, compared to a net outflow of$35 million for the same period in 2023[135]. - The effective tax rate for the three months ended December 31, 2024, was 16.4%, down from 18.1% for the same period in 2023[119]. - The company repurchased approximately 0.4 million shares of common stock at a total cost of $99 million during the first three months of 2025[137]. - The company replaced its former$1.25 billion unsecured revolving credit facility with a new $1.5 billion facility, expiring in June 2027, with an option to increase by up to$750 million[140]. - As of December 31, 2024, the company had approximately $245 million in short-term unsecured credit facilities available to non-U.S. subsidiaries, with$33 million committed under letters of credit[142]. - The company's credit ratings as of February 10, 2025, include Standard & Poor's A-2 short-term rating and A long-term rating, both with a stable outlook[143]. - The EBITDA-to-interest ratio required by the credit facility is at least 3.0 to 1.0, with compliance confirmed as of December 31, 2024[140]. - The company expects to limit other borrowings under its credit facility to ensure sufficient credit is available to repay maturing commercial paper[141]. Risk Management - The company uses foreign currency forward exchange contracts to manage foreign currency risks, with no open net investment hedges as of December 31, 2024[145]. - The company reported a pre-tax net gain of $8 million related to cash flow hedges reclassified into earnings during the three months ended December 31, 2023[146]. - Organic sales growth is calculated by comparing organic sales to reported sales in the prior year, excluding divestitures, providing insight into regional and operating segment performance[149]. Market Conditions - The Manufacturing PMI for December 2024 was reported at 49.3, indicating continued contraction in the manufacturing sector[109]. - The company expects approximately$250 million in year-over-year benefits from cost reduction and margin expansion actions in 2025[111].