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Rockwell Automation (ROK) Q1 Earnings & Sales Beat Estimates

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Rockwell Automation Inc. ROK reported adjusted earnings of $2.14 in first-quarter fiscal 2022 (ended Dec 31, 2021), beating the Zacks Consensus Estimate of $2.00. Compared with earnings of $2.38 reported in the year-ago quarter, the bottom line declined 10% year over year as gains from higher sales were partially offset by negative price/cost mix.

The prior-year quarter’s earnings per share figure of $2.38 included a non-recurring legal settlement gain of 45 cents. Excluding this impact, the company delivered an 11% year-over-year improvement in earnings.

Including other one-time items, the company’s earnings was $2.05 per share in the first quarter of fiscal 2022 compared with the year-ago quarter’s $5.06.

Total revenues were $1,857 million, up 18.7% from the prior-year quarter. The top line surpassed the Zacks Consensus Estimate of $1,806 million. Organic sales in the quarter were up 16.8%. Acquisitions contributed 2.6% to sales growth, while currency translation had a negative impact of 0.7%. The company reported record quarterly orders of $2.5 billion, which surged 40% year over year.

Rockwell Automation, Inc. Price, Consensus and EPS Surprise

Rockwell Automation, Inc. Price, Consensus and EPS Surprise
Rockwell Automation, Inc. Price, Consensus and EPS Surprise

Rockwell Automation, Inc. price-consensus-eps-surprise-chart | Rockwell Automation, Inc. Quote

Operational Update

Cost of sales increased 21% year over year to around $1,108 million. Gross profit climbed 16% year over year to $749 million. Selling, general and administrative expenses flared up 19.5% year over year to $447 million.

Consolidated segment operating income totaled $355 million, up 15% from the prior-year quarter. Total segment operating margin was 19.1% in the fiscal first quarter, lower than the prior-year period’s 19.8%. Higher planned spending and negative price/cost, partially offset by higher sales, led to the contraction in margins.

Segment Results

Intelligent Devices: Net sales amounted to $900 million during the fiscal first quarter, reflecting year-over-year growth of 25%. Segment operating earnings totaled $213 million compared with the year-earlier quarter’s $140 million. Segment operating margin expanded to 23.7% in the quarter compared with the year-ago quarter’s 19.4%.

Software & Control: Net sales climbed 16.5% year over year to $514 million in the reported quarter. Segment operating earnings declined 12% year over year to $117.6 million. Segment operating margin was 22.9% compared with 30.2% in the year-earlier quarter.

Lifecycle Services: Net sales for the segment were $443 million in the reported quarter, reflecting year-over-year growth of 10%. Segment operating earnings totaled $24.5 million, indicating a decline of 32% from the prior-year quarter. Segment operating margin was 5.5% in the reported quarter compared with the year-earlier quarter’s 8.9%.

Financials

As of the end of first quarter of fiscal 2022, cash and cash equivalents were around $540 million compared with $662 million as of the end of fiscal 2021. As of Dec 30, 2021, total debt was around $4.07 billion compared with $3.97 billion as of Sep 30, 2021.

Cash flow from operations during the first quarter of fiscal 2022 was an outflow of $12 million against the prior-year’s inflow of $310 million. Return on invested capital was 20.6% as of Dec 31, 2021.

During the quarter under review, Rockwell Automation repurchased 0.2 million shares for $49.4 million. As of the end of the quarter, $503 million was available under the existing share-repurchase authorization.

Fiscal 2022 Guidance

Reflecting strong demand and record backlog, Rockwell Automation expects reported sales growth at 16-19% for fiscal 2022. Organic sales growth is projected at 14-17%. Adjusted earnings per share guidance for fiscal 2022 is expected to be $10.50-$11.10.

Share Price Performance

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Zacks Investment Research

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Over the past year, Rockwell Automation’s shares have appreciated 23.6% compared with the industry’s rally of 12.8%.

Zacks Rank & Stocks to Consider

Rockwell Automation currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector are MRC Global MRC, Titan International TWI and Sealed Air Corporation SEE. While MRC and TWI flaunt a Zacks Rank #1 (Strong Buy), SEE carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MRC Global has an estimated earnings growth rate of around 212% for fiscal 2022. In the past 90 days, the Zacks Consensus Estimate for fiscal 2022 earnings has been revised 11% upward.

In a year, MRC Global’s shares have gained 17%. MRC has a trailing four-quarter earnings surprise of 61.7%, on average.

Titan International has an expected earnings growth rate of 163% for 2022. The Zacks Consensus Estimate for current-year earnings has moved north by 19% in the past 60 days.

Titan International’s shares have surged 51% in the past year. TWI has a trailing four-quarter earnings surprise of 32.1%, on average.

Sealed Air has a projected earnings growth rate of 16.8% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 4% in the past 90 days.

SEE’s shares have appreciated 53% in a year. Sealed Air has a trailing four-quarter earnings surprise of 6.5%, on average.


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MRC Global Inc. (MRC) : Free Stock Analysis Report

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