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Dec 31, 2024
Regal Rexnord Q4 2024 Earnings Report
Regal Rexnord reported its fourth quarter 2024 financial results, with diluted EPS of $0.62 and adjusted diluted EPS of $2.34, up 2.6% year-over-year.
Key Takeaways
Regal Rexnord reported a mixed fourth quarter, with sales down 9.1% year-over-year but adjusted diluted EPS up 2.6%. The company made good progress on growth, margin, and debt reduction initiatives, despite weaker-than-expected end markets. Strong performance in the IPS segment and exceeding synergy targets were key highlights.
Diluted EPS was $0.62, with adjusted diluted EPS at $2.34, marking a 2.6% increase year-over-year.
The company paid down $205 million of gross debt in Q4, with net debt/adjusted EBITDA (including synergies) at approximately 3.6x.
Adjusted gross margin reached 37.1%, up 60 basis points year-over-year, and adjusted EBITDA margin was 21.7%.
Synergies of $23 million were realized, exceeding the plan, and a strategic partnership with Honeywell on electric aircraft was announced.
Revenue by Segment
Forward Guidance
Regal Rexnord introduced guidance for 2025 GAAP Diluted Earnings per Share in a range of $4.42 to $5.22 and for Adjusted Diluted Earnings per Share in a range of $9.60 to $10.40.
Positive Outlook
- Continued good progress on growth initiatives.
- Solid outgrowth and healthy margin gains in the IPS segment.
- Solid progress in the PES segment, with Resi HVAC growing low-20s.
- AMC segment met sales commitment despite discrete automation weakness.
- Improving orders and green shoots in some key end markets.
Challenges Ahead
- Weaker-than-expected end markets in the fourth quarter.
- Softer mix caused the company to fall short of margin targets.
- General industrial and machinery/off-highway markets were weaker than expected, particularly in December.
- Uncertainties regarding currency headwinds.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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