Regal Rexnord Raises Adjusted EPS Outlook as Data Center Sales Soar; $119 Million Impairment Drives Q3 Loss
Regal Rexnord raised the midpoint of its 2026 adjusted earnings guidance to $10.75 per share as data center sales more than quadrupled, but a $119 million goodwill write-down pushed the motion-control maker to a third-quarter GAAP loss. The company also said it is exploring a sale of its autonomous mobile solutions business.
Sales rose 6.1% to $1.59 billion from $1.50 billion a year earlier, according to the earnings release Regal Rexnord filed with an 8-K on Tuesday. Daily orders grew 6%, and data center sales rose 307%, or 169% excluding E-Pods, the company said.
Adjusted diluted EPS climbed 15.5% to $2.90 from $2.51, including an $0.18 net benefit from IEEPA tariff refunds. On a GAAP basis, the company lost $12 million, or $0.19 per share, compared with net income of $80 million, or $1.20 per share, a year earlier. The goodwill impairment, primarily tied to the autonomous mobile solutions business in its Automation & Motion Control segment, cut $1.78 from diluted EPS.
Adjusted EBITDA rose 3.5% to $351 million, or $337 million excluding the tariff refunds, which the company said was ahead of expectations.
Portfolio review
CEO Aamir Paul, four months into the role, said the company has begun a comprehensive portfolio review with its board and outside advisors.
"Today's announcement that we are exploring the sale of our autonomous mobile solutions business in the AMC segment reflects this approach," Paul said in the release. He added that orders grew 13% excluding data centers, with commercial HVAC orders up 47% and discrete automation orders up 26%.
Segment results
Automation & Motion Control sales jumped 24.5% to $500.6 million, with strength in data center, including $25 million of E-Pods sales, and discrete automation. Its adjusted EBITDA margin was 19.2%.
Industrial Powertrain Solutions sales fell 1.9% to $649.5 million on weakness in metals and mining. Power Efficiency Solutions sales rose 1.2% to $437.9 million, as commercial HVAC growth was partly offset by weaker residential HVAC and pool markets.
Guidance moves both ways
Regal Rexnord raised and narrowed its 2026 adjusted diluted EPS guidance to $10.60 to $10.90. It lowered and narrowed GAAP EPS guidance to $3.76 to $4.06, reflecting the impairment charge.
Free cash flow rose 11.3% to $193.7 million in the quarter. Net debt ended the quarter at 2.9 times adjusted EBITDA including synergies. The company declared a quarterly dividend of $0.35 per share, unchanged from a year earlier.
By the numbers
- Sales: $1.59 billion, up 6.1%
- Adjusted EPS: $2.90, up 15.5%
- GAAP EPS: $0.19 loss, versus $1.20 profit
- Goodwill impairment: $119 million
- Data center sales: up 307%
- 2026 adjusted EPS outlook: $10.60 to $10.90
Sources
- Regal Rexnord Form 8-K with third-quarter 2026 earnings release, filed Nov. 3, 2026 (accession 0000082811-26-000236)
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