Rockwell Automation (NYSE:ROK) shares plunged more than 15% Wednesday on the back of its latest quarterly results, which saw it miss top and bottom-line consensus expectations.
The company reported first-quarter earnings of $2.04 per share, $0.60 worse than the analyst estimate of $2.64. Revenue for the quarter came in at $2.05 billion, up 3.6% year-on-year but below the consensus estimate of $2.1 billion.
The company said Q1 orders were up sequentially across all business segments and regions, with particular strength in North America. However, high levels of channel inventory and some lingering supply chain constraints continue to impact the timing of product shipments, although the company notes underlying conditions remain positive.
"Rockwell had an encouraging start to the fiscal year, with both organic and total sales up low single digits year over year. Importantly, we saw an upward inflection in customer order activity, with total orders up double digits sequentially," said Blake Moret, ROK's Chairman and CEO.
For FY2024, Rockwell Automation sees earnings between $12 and $13.50 per share versus the consensus of $12.89.
Reacting to the report, analysts at Citi, who have a Buy rating and $351 price target on the stock, said it was a "slower-than-expected start."
"Despite a relatively softer start to FY24 (vs. expectations), ROK reiterated its FY24 guidance, which we think is supported by improving order activity as well as expectation of continued normalization of the channel inventory," said analysts at Citi. "We view reiterated order growth guidance of LSD (for FY24) and the company highlighting a double-digit sequential uptick in orders (across all segments and regions) as a positive."