Regal Rexnord Explores Sale Of Its Robotics Unit And Pauses Plant Consolidations
New CEO Aamir Paul opened a portfolio review and said plant execution is weighing on growth and margins, with 2027 guidance due with fourth-quarter results.
Regal Rexnord, which makes electric motors, power transmission components and automation products, is exploring a sale of its autonomous mobile solutions business, CEO Aamir Paul said on the company's third-quarter earnings call Tuesday. Paul, four months into the job, said a portfolio review with the board and outside advisors will look "everywhere."
A small robotics unit goes on the block
The business, known as AMS, supplies the hardware and software that let automated guided vehicles and autonomous mobile robots navigate factories and warehouses. It sits in the Automation & Motion Control segment.
Chief Financial Officer Rob Rehard said it is a low single-digit percentage of that segment's sales. Management sees no material earnings impact and will not speculate on value or timing, he said.
Paul said the decision was about fit, not only financials: "other people with great software expertise could turn this into a juggernaut." The company's results release says the quarter's net loss under standard accounting includes a non-cash goodwill impairment mainly tied to the same business.
Regal Rexnord shares were up 11.56% at $179.54 in Tuesday morning trading, for a market value of $10.7 billion.
How far the review could reach
Asked by a KeyBanc analyst whether the review means pruning or something bigger, Paul said there are no predetermined answers on sizing. "I'm sure there are parts we'll find even in IPS. So we'll look everywhere," he said, referring to the Industrial Powertrain Solutions segment.
He said the company will judge businesses on a rule of 30 (growth plus margin), return on invested capital, free cash flow and strategic fit. Management will also look at simplifying its cost structure.
Plants are straining under demand
Paul said demand accelerated over the last couple of quarters as plants shifted from consolidation toward growth, pressuring plant execution and material planning. The company has "broadly paused" plant consolidations to raise output and brought in third-party support.
Rehard said Industrial Powertrain Solutions sales fell 1.8% organically in the quarter as output at a few plants lagged orders, and its past-due backlog grew. Paul said that late backlog alone is worth about three and a half points of growth. Overall company orders rose 5.7% on a daily basis, and organic sales growth was 6.1%.
A couple of quarters are needed to reach peak performance, Paul said. Regal Rexnord will give 2027 guidance and recovery timing with fourth-quarter results.
Management said it will update on the robotics sale only when it has something definitive, and will confirm in the first-quarter cycle a date for a broader strategy review toward the end of next year.
Sources
- Regal Rexnord (RRX) Q3 Earnings and Revenues Beat Estimates — Yahoo Finance
- Regal Rexnord Non-GAAP EPS of $2.90 beats by $0.23, revenue of $1.59B beats by $30M, low | Seeking Alpha — seekingalpha.com
- Regal Rexnord: Q3 Earnings Snapshot — Associated Press
- Regal Rexnord (RRX) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates — Yahoo Finance
- REGAL REXNORD REPORTS THIRD QUARTER 2026 FINANCIAL RESULTS — prnewswire.com
