Rockwell choosing its own strategy over Emerson

Company rejected takeover bids from Emerson in August, October

Rockwell Automation
Rockwell Automation's Milwaukee headquarters.

The chief executive of Rockwell Automation Inc. says the company’s results this year and outlook for growth next year demonstrates the strength of its own strategic plans and that’s where the company’s focus would remain.

Rockwell Automation
Rockwell Automation’s Milwaukee headquarters.

Rockwell announced last week it had rejected two takeover bids from St. Louis-based Emerson Electric Co. The second bid was for $27 billion and Emerson CEO David Farr made clear during his company’s earnings call Tuesday that he felt a deal could still make sense.

Blake Moret, Rockwell chairman and CEO, shot down several questions from analysts about whether the deal could happen at a higher price or in a different structure.

“We’re not going to speculate on what Emerson Electric or anybody else might do,” Moret said.

Rockwell reported its fourth quarter and full year results Wednesday morning with revenue up 7.3 percent for the year to $6.31 billion. In the fourth quarter, revenue was up 8.4 percent to $1.67 billion.

Net income in the quarter was up 10.5 percent to $204.6 million and earnings improved from $1.43 to $1.57 per diluted share. For the full year net income was up 13.2 percent to $825.7 million and earrings increased from $5.56 to $6.35 per share.

Rockwell forecasted its 2018 sales would be up 3.5 to 6.5 percent organically and reported revenue would be up 5 to 8 percent.

“We believe the company is well-positioned to create substantial additional value for our share owners by continuing to execute on our strategic plan,” Moret said.

The heart of Emerson’s pitch is that the combination of the two companies would create a stronger U.S. automation company. Farr said Emerson would bring strength in process automation while Rockwell would bring strength in hybrid and discrete applications.

But Moret said Rockwell is already “uniquely positioned as the world’s largest company dedicated to industrial automation and information.

“We deliver applications across all industries in process, hybrid and discrete on a single platform with one software environment, which is very attractive to both our customers and our distribution channel,” Moret said.

When analysts asked Moret about Emerson’s rationale for the offer, he said Rockwell continues “to see process as a great growth opportunity.” He also stressed the importance of Rockwell being able to offer a single platform and software environment.

“What matters is the outcome you bring to a specific customer,” Moret said. “Customers are voting with their wallets and that’s why we’re gaining share.”

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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