Regal Rexnord reported higher third-quarter sales and orders, with strong demand in data centers and several automation markets. Adjusted EBITDA rose 4% from a year earlier, while the company posted a GAAP net loss, including a large non-cash goodwill impairment charge.
The industrial manufacturer also raised its adjusted earnings outlook for 2026 while lowering its GAAP earnings range. Separately, it said it is reviewing its business portfolio and exploring a sale of its autonomous mobile solutions business.
Financial performance
- Sales were $1.588 billion, up 6% from the third quarter of 2025. Daily orders also increased 6% year over year.
- Adjusted EBITDA was $351 million, up $12 million, or 4%, from a year earlier. Excluding net benefits from IEEPA tariff refunds, adjusted EBITDA was $337 million, which management said was slightly ahead of expectations.
- The company recorded a GAAP net loss of $12 million, compared with net income of $80 million a year earlier. Results included a $119 million non-cash goodwill impairment charge, equivalent to a $1.78 reduction in diluted earnings per share, primarily related to the autonomous mobile solutions business.
- Net debt to adjusted EBITDA, including expected synergies, was 2.9 times at quarter-end.
Demand and segment results
- Data center sales rose 307% year over year, or 169% excluding E-Pods. The Automation & Motion Control segment included $25 million of sales related to E-Pods.
- Orders grew 13% excluding data centers, according to CEO Aamir Paul. Commercial HVAC orders increased 47%, which the company attributed in part to new air-moving solutions; discrete automation orders rose 26%.
- Automation & Motion Control (AMC) sales were $500.6 million, up 24.5% year over year, or 25.2% organically. Growth was broad-based, with particular strength in data centers and discrete automation. Adjusted EBITDA margin was 19.2%, or 18.7% excluding net IEEPA refund benefits.
- Industrial Powertrain Solutions (IPS) sales were $649.5 million, down 1.9%, or 1.8% organically. Weakness in metals and mining was partly offset by strength in discrete automation and energy markets. Adjusted EBITDA margin was 26.0%, or 25.2% excluding net IEEPA refund benefits.
- Power Efficiency Solutions (PES) sales were $437.9 million, up 1.2%, or 0.4% organically.
Outlook and portfolio review
- Regal Rexnord lowered and narrowed its 2026 GAAP diluted EPS guidance to $3.76–$4.06. The range includes the goodwill impairment charge.
- It raised and narrowed its 2026 adjusted diluted EPS guidance to $10.60–$10.90, with a midpoint of $10.75.
- Paul said the company has begun a comprehensive review of its portfolio with its board and outside advisers, with the stated aim of directing capital toward its most attractive opportunities.
- As part of that effort, Regal Rexnord is exploring a sale of its autonomous mobile solutions business in the AMC segment. The announcement does not establish that a sale has been agreed or completed.
The disclosures point to stronger operating demand in several growth markets alongside continued weakness in some industrial end markets. The portfolio review and possible business sale signal a focus on reshaping the company’s holdings and capital allocation; the proposed sale remains under exploration.