Rockwell Automation, Inc.
) reported second quarter fiscal 2013 adjusted earnings of $1.33
per share, up 11% from $1.20 per share earned in the prior-year
quarter. The results beat the Zacks Consensus Estimate of $1.30.
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Earnings exclude net effect of non-operating pension costs and
their related tax effect of 9 cents per share in the reported
quarter and 4 cents in the year ago quarter. Including this,
earnings from continuing operations were $1.24 per share compared
with the prior-year quarter's earnings of $1.16.
Total revenues were $1.533 billion in the reported quarter, down
2% year over year. The results missed the Zacks Consensus
Estimate of $1.594 billion.
Cost of sales decreased 4% year over year to $906 million in the
quarter. Gross profit remained flat at $616 million compared with
the year-ago quarter. Gross margin expanded 90 basis points (bps)
year over year to 40.5% in the quarter.
Selling, general and administrative expenses declined 1% to $377
million from the prior-year quarter. Segment operating income was
$285 million in the quarter compared with $276 million in the
second quarter of 2012. Operating margin expanded 100 basis
points year over year to 18.7%.
Architecture & Software:
Net sales for the segment went down 4% to $639 million in the
quarter. Organic sales decreased 3%. Segment operating earnings
in the reported quarter were $169.9 million compared with $170.6
million in the year-ago quarter. Segment operating margin
increased to 26.6% from 25.7% a year ago.
Control Products & Solutions:
Net sales decreased 1% to $883.6 million in the quarter. Segment
operating earnings in the reported quarter inched up 9% to $115.3
million. Segment operating margin in the quarter expanded 120
(bps) year over year to 13%.
Rockwell Automation had cash and cash equivalents of $967.1
million as of Mar 31, 2013, compared with $903.9 million as of
Sep 30, 2012. Total debt was $1.14 billion as of Mar 31, 2013
compared with $1.06 billion as of Sep 30, 2012.
The debt-to-capitalization ratio was 36.1% as of Mar 31, 2013,
flat compared with Sep 30, 2012. In the second quarter of fiscal
2013, the company generated a cash flow from operating activities
of $370 million compared with $64.5 million in the prior-year
quarter. Return on invested capital was 29.8% as of Mar 31, 2013
compared with 30.5% as of Mar 31, 2012.
During the reported quarter, Rockwell Automation repurchased 1.4
million shares for $125.9 million. As of Mar 31, 2013, the
company had $723 million worth of shares remaining under the $1
billion share repurchase authorization.
Rockwell Automation lowered its sales guidance to the range of
$6.25 to $6.45 billion for fiscal 2013 from the previous range of
$6.35 to $6.65 billion. Outlook for earnings per share was also
revised to a new band of $5.40 to $5.70 per share from the
previous range of $5.35 to $5.75 per share.
Rockwell Automation will benefit from its expansion in the
emerging markets, investment in Logix and its recent acquisition
of China-based medium voltage drives business. However,
uncertainty in the global economic scenario, which can lead to
cautious capital-spending, further deterioration in the Chinese
economy and margin headwinds in the form of increased growth
spending remain concerns. Rockwell currently retains a short-term
Zacks Rank #3 (Hold).
Based in Milwaukee, Wisconsin, Rockwell Automation is an original
equipment manufacturer (OEM) of industrial automation equipment,
application specific integrated software and consulting design
services. Rockwell's peers in the same industry are
HollySys Automation Technologies, Ltd.