Rockwell Automation, Inc.
) reported second-quarter fiscal 2014 (ended Mar 31, 2014)
adjusted earnings of $1.35 per share, up 2% from $1.33 earned in
the prior-year quarter. Results, however, fell short of the Zacks
Consensus Estimate of $1.35. Shares dipped 7.15% as adjusted
earnings in the second quarter were negatively impacted by 8
cents due to a higher tax rate, owing primarily to the
year-over-year decrease in tax benefits related to the U.S.
research and development tax credit.
Rockwell Automation, Inc. - Quarterly
Earnings Per Share | FindTheBest
Adjusted earnings exclude the net effect of non-operating
pension costs and their related tax effect of 7 cents per share
in the reported quarter and 9 cents in the year-ago quarter.
Including these, earnings from continuing operations came in at
$1.28 per share compared with the prior-year quarter figure of
Total revenue was $1,601 million in the quarter, up 5% year
over year. Revenues also fell short of the Zacks Consensus
Estimate of $1,611 million. Organic sales grew 7% year over year
while currency translation reduced sales by 2 percentage points.
Growth was witnessed in all regions for the first time in over a
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Cost of sales increased around 4% year over year to $945 million.
Gross profit rose 6% to $656 million from $616 million in the
year-ago quarter. Gross margin expanded 50 basis points (bps)
year over year to 41%.
Selling, general and administrative expenses went up 4% from the
prior-year quarter to $392 million. Consolidated segment
operating income was $302 million, up 6% from $285 million in the
second quarter of 2013. The operating margin expanded 20 bps year
over year to 18.9% on the back of higher sales.
Architecture & Software: Net sales increased 7% year over
year to $687 million in the second quarter. Segment operating
earnings were $190.9 million, as against $170 million in the
year-ago quarter. Segment operating margin increased to 27.7%
from 26.6% a year ago.
Control Products & Solutions: Net sales rose 3% year over
year to around $914 million. Segment operating earnings decreased
3% to $112 million from $115 million in the year-ago quarter.
Segment operating margin contracted 80 bps year over year to
As of Mar 31, 2014, cash and cash equivalents amounted to $1234
million versus $1246 million as of Dec 31, 2013. As of Mar 31,
2014, long-term debt was $905 million, flat compared with the
year-ago level. The debt-to-capitalization ratio was at 31% as of
Mar 31, 2014 compared with 30% as of Dec 31, 2013.
Cash flow from operations was $406 million during second-quarter
2014, as against $370 million in the year-ago comparable period.
Return on invested capital was 30.6% as of Mar 31, 2014, compared
with 29.8% as of Mar 31, 2013.
During the reported quarter, Rockwell Automation repurchased 0.9
million shares for $110.7 million. As of Mar 31, 2014, the
company had $313.7 million worth of shares remaining under the $1
billion share repurchase authorization.
Rockwell Automation reiterated its organic revenue growth rate in
the range of 3.5-6.5% and segment margin to be about 20% for
fiscal 2014. The company expects adjusted earnings per share to
lie in the range of $6.00 to $6.35 for the full year.
Rockwell Automation will benefit from expansion in the emerging
markets and strategic acquisitions. Additionally, a strong
balance sheet position and free cash flow, along with dividends
and share repurchases are expected to generate long-term
shareholder value. However, uncertainty in the global economic
scenario remains a headwind.
Milwaukee, WI-based Rockwell Automation is a leading global
provider of industrial automation equipment, application-specific
integrated software and consulting design services. It also
offers industrial automation power, control and information
Currently, Rockwell carries a Zacks Rank #3 (Hold). However,
better-ranked stocks in the retail sector include
The Babcock & Wilcox Company
). While Gorman-Rupp holds a Zacks Rank #1 (Strong Buy), iRobot
and Babcock & Wilcox hold a Zacks Rank #2 (Buy).