Rockwell Automation, Inc. ROK shares surged after the company reported better-than-expected first-quarter results.

Sales fell 8.4% year over year and slid 7.6% organically to $1.881 billion, in line with the consensus of $1.881 billion.

Segment Details: Intelligent Devices sales declined 13.1% to $806 million, Software & Control fell 12.4% to $529 million, and Lifecycle Services rose 5% to $546 million.

Total ARR grew 11%. Adjusted EPS was $1.83 (-10% YoY), above the analyst consensus of $1.59.

Total segment operating earnings for the quarter fell 10% year-over-year to $321 million. Segment operating margin declined slightly to 17.1% from 17.3%, impacted by lower sales volume, though partially offset by cost reductions and margin expansion efforts.

Operating cash flow was $364 million, up from $33 million year over year. Free cash flow reached $293 million, compared to a $35 million outflow last year. The increase was mainly due to no payout of incentive compensation in the first quarter of fiscal 2025 related to fiscal 2024 performance.

“From a demand perspective, we are encouraged by better-than-expected order performance in the quarter with sequential growth across all regions and business segments. While there is still some macroeconomic and policy uncertainty weighing on customers' capex plans, Rockwell won multi-million dollar strategic orders across key industries, especially in the U.S., our home market,” commented Blake Moret, Chairman and CEO.

“Q1 margins and EPS came in well above our expectations this quarter, reflecting some early benefits of Rockwell’s renewed focus on operational excellence and cost discipline,” added Moret.

The company repurchased 0.4 million shares for $99 million during the quarter. As of December 31, $1.2 billion remained under existing repurchase authorizations.

Return on Invested Capital for the twelve months ended December 31, 2024, was 14.5%, down from 18.5% in the prior year, primarily due to lower pre-tax net income.

FY25 Outlook updates: Rockwell continues to expect adjusted EPS of $8.60 – $9.80 versus the $9.40 estimate.

The company lowered sales midpoint expectations to ~$8.1 billion from the prior view of ~$8.2 billion versus the $8.225 billion estimate.

The company updated fiscal 2025 reported sales growth range to (5.5)% – 0.5% due to ~(1.5)% FX impact to sales, reaffirmed organic sales growth range of (4)% – 2%.

Price Action: ROK shares are trading higher by 9.36% at $293.51 at the last check Monday.

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