Company: ROK
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001024478-25-000035
Chunk: 79

Company: ROCKWELL AUTOMATION, INC
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 8
Chunk 79
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 pricing. The Producer Price Index (PPI), published by the Bureau of Labor Statistics, measures the average change over time in the selling prices received by domestic producers for their output. PPI growth has remained in the low single digits during the second quarter, which is consistent with the prior five quarters. Producer prices continue to remain elevated, however, year over year increases remain decelerated from the surges in 2023 and 2022.

Non-U.S. Economic Trends

In the second quarter of 2025, sales to customers outside the U.S. accounted for less than half of our total sales. These customers include both indigenous companies and multinational companies with a global presence. In addition to the global factors previously mentioned in the Overview section, international demand, particularly in emerging markets, has historically been driven by the strength of the industrial economy in each region, investments in infrastructure, and expanding consumer markets. We use changes in key countries' gross domestic product (GDP), IP, and PMI as indicators of the growth opportunities in each region where we do business. Industrial output outside the U.S. was mostly positive in the second quarter of fiscal 2025. Manufacturing PMI readings outside the U.S were mixed with readings in Asia Pacific generally better than readings in Europe, Canada, and Mexico.

Outlook

We expect sequential improvement in our sales and margins through 2025 as we continue to deliver on our cost reduction and margin expansion initiatives introduced in 2024. We expect over $250 million of year-over-year benefits from cost reduction and margin expansion actions in 2025 including continuing benefits from restructuring actions we initiated last year and benefits from reduced costs of direct and indirect purchases, increased manufacturing efficiency, and price actions.

Based on currently enacted tariffs, we estimate our cost exposure to be about $125 million for the second half of 2025. We continue to manage the impact of tariffs through actions including pricing and the use of alternative sources of materials and redundant manufacturing locations. Resiliency actions we took in recent years enable us to build certain high value product lines in more than one geographic location. In consideration of these mitigating actions, tariff costs are expected to be neutral to EPS in the current year.

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Summary of Results of Operations

The following table reflects our sales and operating results (in millions, except per share amounts and percentages):

 Three Months EndedMarch 31,Six Months EndedMarch 31, 2025202420252024SalesIntelligent Devices (a)$896 $974 $1,