Rockwell upbeat after strong first quarter

Revenue, net income top estimates

Rockwell Automation
Rockwell Automation's Milwaukee headquarters.

Milwaukee-based Rockwell Automation Inc. increased its full year guidance after reporting a strong start to the fiscal year, including a 3.8 percent increase in organic sales.

Rockwell Automation
Rockwell Automation’s Milwaukee headquarters.

For the quarter, Rockwell reported net income of $214.7 million, up 15.7 percent from the $185.5 million during the same period last year. Earnings increased from $1.40 to $1.65 per diluted share.

Revenue during the period was $1.49 billion, a 4.5 percent jump from the previous year. Foreign currency translation reduced sales by 1.1 percentage points and acquisitions added 1.8 percent.

Blake Moret, Rockwell president and chief executive officer, said the company returned to organic growth in the U.S. and saw double-digit growth in emerging markets.

“Four percent organic growth in the quarter is a great start to the fiscal year, better than we expected,” he said.

The quarter also topped Wall Street expectations including by 30 cents on earnings and $70 million on revenue, according to SeekingAlpha.

Moret said the company would increase its organic sales guidance by one percentage point across its range and up earnings guidance by 10 cents based on the macro outlook and first quarter performance.

He said the macro environment was largely consistent with the company’s assumptions earlier in the fiscal year. He said oil and commodity prices have been stable or inched up while projections call for improving GDP, industrial production and capital expenditure levels.

“Strong underlying demand for our products enables us to accelerate investments this year in core technologies and domain expertise, and to expand the new value we are providing in information solutions and connected services,” Moret said.

Rockwell’s strong quarter was driven particularly by its architecture and software segment, which reported an 8.3 percent increase in revenue to $696.4 million. Higher sales helped push the segment’s operating margins from 27.4 percent to 30 percent.

The control products and solutions segment, meanwhile, reported a 1.3 percent increase in revenue to $793.9 million. The segment’s operating margin declined from 15.3 percent to 13.6 percent with an increase in incentive compensation.

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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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