For the second straight quarter, Milwaukee-based Rockwell Automation increased its fiscal year guidance, now projecting that its revenue could top $9 billion this year.
Rockwell, a maker of industrial automation and digital transformation products, saw a strong increase in orders over the past year. Combined with supply chain challenges, especially for semiconductor components, the company’s order backlog ballooned.
As Rockwell works through the backlog, it has seen strong sales growth and has been able to increase its outlook for the year. In January, after the first quarter of its fiscal year, the company increased the midpoint of its guidance from a 9.5% increase to a 12% increase.
On Thursday, Rockwell again increased the midpoint of its guidance, this time going from a 12% increase to 14.5%.
The high-end of the company’s outlook now calls for a potential 16.5% increase in revenue. If Rockwell were to hit that level, its full-year revenue would reach $9.04 billion.
Rockwell is off to a good start toward reaching those higher level sales figures. In the second quarter, sales increased nearly 26% to $2.28 billion. For the first half of the year, sales are up 16.1%.
Profitability has also improved with net income reaching $300 million in the first quarter, up from $53.9 million in 2022. For the first six months of the fiscal year, net income has increased from $295.4 million to $684.3 million.
Rockwell currently has around $5.6 billion worth of order backlog yet to fill. The company expects to end the year with a $5 billion backlog. Its orders for the year are expected to total roughly $9 billion.
“This is playing out like we thought it would,” said Blake Moret, chairman, president and chief executive officer of Rockwell Automation. “We have said for some time now that we did expect orders and shipments to converge as lead times improve.”
Moret said supply chain issues are improving, including the availability of semiconductor components, although those issues remain the primary limiting factor in clearing the company’s backlog.
“The orders are continuing at a strong pace,” Moret said. “We’re also seeing, across all verticals, an increased focus on automation.”
He highlighted higher levels of spending on Rockwell’s products in electric vehicles, batteries, semiconductors and energy. He also noted many industries are struggling with the scarcity of available trained workforce.
“While we continue to pay close attention to macroeconomic conditions, we think the setup for multi-year growth in automation and information is there,” Moret said.