Milwaukee-based manufacturer
Regal Rexnord expects current and potential tariffs on imports from Canada, China and Mexico, as well as on steel and aluminum, to cost the business approximately $60 million, an impact the company, with annual revenue of about $6 billion, calls "negligible."
The manufacturer of electric motors and power transmission components said Wednesday the $60 million estimate reflects the fact that most of the goods the company imports from Canada and Mexico are currently exempt from tariffs. This is because those goods are compliant with the United States-Mexico-Canada Agreement.
"The company has well-developed plans in place intended to fully mitigate the impacts of tariffs in the year – at current levels and under a scenario where there is no USMCA exclusion," according to a Wednesday announcement. "These mitigation plans may include supply chain realignments, production relocations, and productivity and pricing actions, and should enable the company to be at least price/cost neutral on a dollar basis. The company expects to be neutral on a margin basis by the end of 2025 under the tariff regime currently in effect, or by the first half of 2026 under a scenario where there are no USMCA exclusions."
Regal Rexnord leadership expects tariffs to have a “negligible impact” on the company’s first quarter 2023 results. Earlier this year, company leadership provided 2025 earnings per share guidance of between $9.60 and $10.40, reflecting approximately 10% growth.
“I would like to reiterate that while we are cautiously optimistic entering 2025, we are remaining measured in our approach to guidance,” said
Rob Rehard, executive vice president and chief financial officer during Regal Rexnord’s latest earnings call. “We are using current market conditions to set our expected guidance range. And as discussed, we see a stronger second half versus the first half based on current order trends and backlog characteristics.”
The company recorded revenue of $6.03 billion in 2024, down 3.5% from 2023.
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