Rockwell Automation to Repurchase Shares Worth $1B - Analyst Blog

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The board of on Rockwell Automation, Inc. ( ROK ) has sanctioned the repurchase of additional common stock of up to $1 billion on top of its prior repurchase authorization of $1 billion, initiated in June, 2012.

Under the previous $1 billion share buyback program, Rockwell Automation has repurchased around $777 million worth of shares. As of June 3, 2014, there were around 223 million shares outstanding.

In addition to its share buyback program, the company also announced a quarterly dividend of 58 cents a share. The dividend will be paid on Sep 10, 2014, to shareholders of record as of Aug 11, 2014. These programs are in sync with Rockwell Automation's commitment to create long-term value for investors.

Notably, Rockwell Automation facilitates returns to shareholders through dividends and buybacks. In the past four years, the company has returned over 80% of free cash flow or $2 billion to shareholders.

Rockwell Automation reported second-quarter fiscal 2014 (ended Mar 31, 2014) adjusted earnings of $1.35 per share, up 2% from the year-ago quarter. Total revenue also increased to $1,601 million in the quarter, up 5% year over year.

Rockwell Automation's cash flow from operations increased to $406 million during second-quarter 2014, as against $370 million in the year-ago comparable period. Strong balance sheet position and free cash flow, along with dividends and share repurchases are expected to generate long-term shareholder value.

Rockwell Automation reiterated its organic revenue growth rate to be 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 land in the range of $6.00 to $6.35 for the full year.

Moreover, Rockwell Automation will benefit from expansion in the emerging markets and through strategic acquisitions. However, uncertainty in the global economic scenario remains 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 solutions.

Currently, Rockwell Automation carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering include iRobot Corporation ( IRBT ), Blount International Inc. ( BLT ) and IDEX Corporation ( IEX ). All of these stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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