Rockwell Automation (ROK)
Q4 2012 Earnings Call
November 05, 2012 8:30 am ET
Rondi Rohr-Dralle - Vice President of Investor Relations & Corporate Development
Keith D. Nosbusch - Chairman, Chief Executive Officer and President
Theodore D. Crandall - Chief Financial officer and Senior Vice President
Scott R. Davis - Barclays Capital, Research Division
Charles Stephen Tusa - JP Morgan Chase & Co, Research Division
Julian Mitchell - Crédit Suisse AG, Research Division
Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division
John G. Inch - Deutsche Bank AG, Research Division
Jeffrey T. Sprague - Vertical Research Partners, LLC
Nigel Coe - Morgan Stanley, Research Division
Winifred Clark - UBS Investment Bank, Research Division
Shannon O'Callaghan - Nomura Securities Co. Ltd., Research Division
Previous Statements by ROK
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Thank you, DeLou. Good morning, and thanks, everyone, for joining us for Rockwell Automation's Fourth Quarter Fiscal 2012 Earnings Release Conference Call. With me today are Keith Nosbusch, our Chairman and CEO; and Ted Crandall, our Chief Financial Officer. Our agenda includes opening remarks by Keith that will include highlights on the company's performance in the fourth quarter and the full year and some commentary on our outlook. Then Ted will review the results for the quarter and our guidance for fiscal 2013. He will also spend some time today going through the components of pension expense, our new definition of segment operating earnings and our new non-GAAP measure of adjusted earnings per share. We'll take questions at the end of Ted's remarks.
Our results today were released this morning and the press release and charts have been posted to our website at www.rockwellautomation.com. Please note that both the press release and charts include reconciliations to non-GAAP measures. In addition, our supplemental financial data document is available on our website, and it includes reconciliations to our new non-GAAP EPS and segment earnings by quarter for 2008 through 2012.
A webcast of this call is accessible at that website and will be available for replay for the next 30 days. We appreciate you starting your week with us today. We've got a lot to cover, so the call may go a little bit longer than an hour.
Before we get started, I need to remind you that our comments will include statements related to the expected future results of the company and are, therefore, forward-looking statements. Our actual results may differ materially from our forecasted projections due to a wide range of risks and uncertainties that are described in our earnings release and detailed in all of our SEC filings.
So with that, I'll hand the call over to Keith.
Keith D. Nosbusch
Thanks, Rondi. Good morning, everyone. Let me start by saying to anyone affected by last week's hurricane and its aftermath that I appreciate your efforts to join our call today. I hope you were able to stay out of harm's way.
I'll start with highlights for the quarter and the full year, so please turn to Page 4 in the slide deck. I was pleased with 5% organic growth, especially given the tough comparison to last year's very strong fourth quarter. Growth rates continued to moderate due to the difficult economic environment, but once again, we had organic growth in all regions. Emerging markets grew 11% in the quarter with particular strength in Central and Eastern Europe and Africa.
Most of the growth this quarter came from our solutions businesses as our product businesses were essentially flat compared to last year. Process had another great quarter with 18% growth.
In the quarter, we initiated restructuring actions with corresponding charges of about $13 million. We're calling this out because the charges are considerably higher than a normal run rate for pay-as-you-go actions. These restructuring actions provide us with some headroom to rebalance investments in 2013.
Earnings per share were $1.38, about $0.01 lower than last year. Restructuring charges reduced EPS by about $0.07. Cash flow in the quarter was strong, and we repurchased another 1.4 million shares. So overall, a good end to a very solid year.
I'll make a few comments on the full year before I move to our outlook. We entered 2012 in the midst of global economic uncertainty, and that is still the prevailing environment. The prospects of a fiscal cliff in the U.S., the ongoing sovereign debt crisis in Europe and the slowdown in key emerging markets all weighed on economic growth this year. Despite that, we delivered organic growth of 6% for the full year and ended the year with record sales of up over $6.2 billion.
Canada had very strong growth of 20%, reflecting continued strength in the resource-based industries. Mexico also grew 20%, and industrial activity there remained strong. But our European region was the real standout with 6% organic growth in the face of a recession. I was encouraged that we grew in both developed and emerging EMEA, and I want to our acknowledge the EMEA leadership team who executed very well within difficult market conditions.
It's not on the chart, but Process sales grew 20% for the full year, and we continue to win both batch and continuous process applications. I was pleased that we were able to expand segment operating margin a full point while continuing to invest for growth.