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Investing.com -- Regal Rexnord (NYSE:ZWS) Corporation (NYSE:RRX) saw its shares soar 7.9% after the industrial manufacturer reported first-quarter earnings that surpassed analyst expectations and provided robust full-year guidance.
The company posted adjusted earnings per share of $2.15 for the first quarter, beating the analyst consensus of $1.83 by $0.32. Revenue came in at $1.42 billion, exceeding estimates of $1.38 billion and growing 0.7% on an organic basis compared to the same quarter last year.
Regal Rexnord reaffirmed its full-year 2025 adjusted EPS guidance of $9.60 to $10.40, with the midpoint of $10.00 slightly above the analyst consensus of $9.65. The company expects mitigation actions to neutralize the impact of current tariffs on its 2025 adjusted EBITDA and EPS.
CEO Louis Pinkham commented, "First quarter marked a strong start to the year, with all segments exceeding guidance, in some cases by wide margins." He noted positive organic growth, margin improvements, and a 32% increase in free cash flow to $85.5 million.
The Power Efficiency Solutions segment was a standout performer, achieving 8.0% organic growth and a one percentage point expansion in adjusted EBITDA margin, driven by strong residential HVAC markets in North America.
Despite recent shifts in U.S. trade policy raising macro uncertainty, Pinkham expressed confidence in the company’s ability to create shareholder value in 2025, citing ongoing synergy execution and various growth and productivity initiatives.
Regal Rexnord also reported paying down $164 million of gross debt in the first quarter, with its net debt to adjusted EBITDA ratio standing at approximately 3.6x.
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