Updated Aug 13 at 11:21am ET.
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Rockwell is connecting two of its software tools to help manufacturers automate quality control. By linking its VisionAI tool with its Plex quality management system, the company is allowing factories to use cameras and artificial intelligence to spot defects on the assembly line and log them automatically.
This is a step toward Rockwell's goal of growing its high-margin software business. While the company is known for hardware like controllers and motors, software that uses AI to reduce waste and improve traceability makes its platform harder for customers to leave. It also provides more predictable, recurring revenue compared to one-time equipment sales.
Source: PRNewsWire
Factory orders in Germany jumped in June as businesses bought more parts and equipment to protect against supply chain problems. This is a helpful sign for Rockwell because Germany is a major manufacturing hub that relies heavily on automation hardware and software.
While costs for raw materials have been rising, the fact that factories are still spending on equipment suggests that the push to modernize and secure supply chains is outweighing those higher costs for now.
Source: WSJ
Rockwell reported third-quarter revenue of about 2.31 billion dollars, which was better than analysts expected. Organic sales, which strip out the effects of currency moves and acquisitions, grew 10 percent. This growth was led by companies building data centers and semiconductor plants, which are currently the brightest spots for the business.
Management raised its full-year profit forecast to about 13.15 dollars per share at the midpoint. While some traditional manufacturing areas like automotive are just starting to improve, the high demand for chips and AI infrastructure is doing the heavy lifting. This supports the idea that Rockwell is successfully shifting its focus toward the high-growth parts of the economy.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Ken's Foods is installing Rockwell's on-machine architecture to run its end-of-line operations. This setup reduces the amount of cabling needed and makes it easier for staff to see what is happening on the production line. While this is a routine customer win, it shows how Rockwell's hardware helps food and beverage companies modernize older factories. These types of upgrades are a steady source of business that balances out the more volatile spending in sectors like electronics.
Source: PRNewsWire
Aalo Atomics has chosen Rockwell to provide the control platform for its Aalo-X test reactor. These modular nuclear plants are being developed specifically to provide the massive amounts of steady electricity needed by modern AI data centers.
This is a notable win because it puts Rockwell at the center of the search for new energy sources for the AI boom. If modular reactors become a standard way to power data centers, Rockwell will have an early lead in providing the software and hardware that keeps them running safely.
Source: PRNewsWire
Analysts adjusted their price targets following the company's recent earnings report. Most experts are cautious, with 26 of 40 rating the stock as a hold, though the average target of $495 suggests an 11% upside from current prices.
Management has a perfect record of beating expectations over the last two years, usually by a wide margin. This suggests they are very good at under-promising and over-delivering.
| Expectation | |
|---|---|
| EPS | $3.70 |
| Revenue | $2.40B |
PRNewsWire · Press release · Aug 11
Seeking Alpha · Opinion · Aug 4
Business Wire · Press release · Aug 4
PRNewsWire · Press release · Jul 22
Business Wire · Press release · Jul 21
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