On one hand,
Rockwell Automation’s sales decreased 5.9% in its fiscal second quarter, but on the other hand, that figure represented an improvement from the 8.4% decrease in the first quarter.
The Milwaukee-based maker of industrial automation products also maintained its organic sales guidance for the year, calling for between a 4% drop and a 2% gain. The company’s reported sales outlook improved by a percentage point, now calling for between a 4.5% drop and 1.5% gain as foreign currency translation is expected to be less of a drag.
That outlook comes as Rockwell’s sales have been down 7.1% in the first half of its fiscal year and many of the company’s customers face uncertainty about tariffs and the direction of the economy.
“Even with our customers continuing to adopt a cautious approach to their CapEx investments in this uncertain environment, we saw a number of strategic projects across a variety of industries and geographies in the quarter,”
Blake Moret, chairman and chief executive officer of Rockwell Automation, said on the company’s earnings call.
Moret pointed to wins and growth with customers in power generation for data centers, panel building, food and beverage, warehouse automation, e-commerce and semi-conductors.
He did note business in automotive and energy industries faced challenges, adding those areas in particular saw customers delaying projects.
“Delays, not cancellations,” he said. “Cancellations remain in a low historical band and so we absolutely do expect that these customers are going to pull the trigger on some of these investments.”
He declined to put a specific estimate on when those delayed projects would move forward, but noted there were some cases where things delayed during the first quarter had already moved forward in April
“As all manufacturers are looking for more certainty and consistency with the tariffs and the cost that might come along with tariffs, what they’re looking for as well is making sure that the demand is still there from their end customers. In the majority of cases, they expect that this is a pause, not anything that lasts for a long, long time,” Moret said.
“There is still a generally optimistic long-term view among most of our customers – especially those with high exposure to the U.S. – because the idea of U.S. manufacturing as a good thing for the U.S. economy, resonates with a lot of us and of course, Rockwell is a net beneficiary of that,” he added.
Moret also said that changes the company made in the wake of the COVID-19 pandemic are providing benefits in the current environment. Those actions included steps to have redundant manufacturing capacity at locations around the world.
“We made significant investments in our operational resilience during the supply chain crisis and they have been instrumental in helping us navigate through the current situation by giving us additional flexibility in our supply chain and manufacturing footprint,” he said.
