Company: ROK
Filing Date: 2025-02-10
Form Type: 10-Q
Source: 0001024478-25-000010
Chunk: 24

Company: ROCKWELL AUTOMATION, INC
Filing Date: 2025-02-10
Form: 10-Q
Item: Part I, Item 1
Chunk 24
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:December 202499.349.3Fiscal 2024 quarter ended:September 202499.047.2June 202499.448.5March 202499.550.3December 202399.247.1Fiscal 2023 quarter ended:September 202399.649.0

Inflation in the U.S. has also had an impact on our input costs and 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 first quarter, which is consistent with the prior four 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 first 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 was mostly higher outside the U.S. in the first quarter of fiscal 2025 versus the fourth quarter of 2024. Manufacturing PMI readings outside the U.S in the largest countries where we do business had results reported below 50.

Outlook

We expect gradual 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 approximately $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. 

We continue to evaluate the potential impact of announced changes and further potential changes in trade policies and tariffs with the objective of maintaining profitability under a variety of scenarios. In 2024 our direct imports into the United States from third parties and our own manufacturing facilities in Mexico, Canada, and China were approximately $350 million, $100 million, and $100 million, respectively.