Regal Rexnord Reports Mixed Q3 2024 Results, Net Income Turnaround

Regal Rexnord Corporation reported its financial results for the third quarter and the nine months ended September 30, 2024, showing significant changes in revenue and profitability compared to the previous fiscal period.

For Q3 2024, net sales totaled $1,477.4 million, a decrease of $172.4 million (10.4%) from $1,649.8 million in Q3 2023. This decline was attributed to an organic sales drop of 2.7% and a negative foreign currency translation impact of 0.2%. The sale of the industrial motors and generators businesses, which closed on April 30, 2024, accounted for a $128.0 million reduction in sales. In contrast, gross profit for Q3 2024 increased by $14.1 million (2.6%) to $556.3 million, driven by a $52.2 million increase in the Industrial Powertrain Solutions (IPS) segment, despite declines in the Automation & Motion Control (AMC) and Power Efficiency Solutions (PES) segments.

Income from operations for Q3 2024 was $174.1 million, a significant recovery from a loss of $(20.4) million in Q3 2023. Net income for the quarter was $73.0 million, compared to a net loss of $(138.6) million in the same period last year. The effective tax rate for Q3 2024 was 10.3%, compared to (10.1)% in Q3 2023.

For the nine months ended September 30, 2024, net sales decreased by $69.8 million (1.5%) to $4,572.7 million, with an organic sales decline of 6.2% and a negative foreign currency impact of 0.3%. However, gross profit increased by $176.3 million (11.7%) to $1,680.4 million, primarily due to the acquisition of Altra, which contributed $175.2 million. Total operating expenses decreased by $125.5 million (9.6%) due to the divestiture of the industrial motors and generators businesses.

The company reported a net income of $156.4 million for the nine months ended September 30, 2024, a turnaround from a net loss of $(110.9) million in the same period of 2023. The net income attributable to Regal Rexnord Corporation was $155.0 million, compared to a loss of $(113.3) million in the prior year.

Strategically, Regal Rexnord completed the divestiture of its industrial motors and generators businesses for $446.6 million, which impacted both revenue and operating expenses. The company also incurred transaction and integration-related costs of approximately $13.8 million for the nine months ended September 30, 2024, primarily related to the Altra merger completed in March 2023.

As of September 30, 2024, total assets were reported at $14,559.0 million, down from $15,431.4 million at the end of 2023, while total liabilities decreased to $8,085.9 million from $8,787.0 million. The company’s total equity increased to $6,485.8 million, reflecting a focus on debt reduction and operational efficiency.