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In the last reported quarter, Rockwell Automation’s earnings and revenues missed the respective Zacks Consensus Estimates. While the bottom line declined year over year, the top line rose year on year.
The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average surprise being negative 0.21%.
Q3 Estimates
The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $1.98 billion, indicating growth of 7% from the prior-year quarter’s levels. The same for earnings is pegged at $2.33, suggesting an increase of 0.87% from the year-ago quarter’s figure. The earnings estimates have undergone downward revisions in the past 30 days.
Factors to Note
Rockwell Automation has been witnessing improvement in its order levels in the past few quarters. In the last reported quarter, total orders rose 37% year over year, driven by robust demand for core automation and digital transformation solutions. Per the Federal Reserve, total industrial production rose at an annual rate of 6.1% in the April-June quarter. This might have contributed to the company’s order book in the fiscal third quarter. Strong demand for software and cyber security services and a robust order backlog are likely to get reflected in Rockwell Automation’s fiscal third-quarter top line. Improved material flow from key suppliers is likely to have improved component shipments in the quarter.
These above-mentioned benefits might have been offset by the ongoing supply-chain constraints. The manufacturing supply chain continues to be strained by the sharp rise in demand and the ongoing shortages of electronic components, along with pandemic-related and other global events that have put additional pressures on manufacturing output and freight lanes. Inflated costs for commodities, components and freight services are expected to have dented the company’s margins in the quarter to be reported. The company’s focus on process improvement, price increase actions, functional streamlining and material cost savings are likely to have negated some of these impacts.
Segment Expectations
For the Intelligent Devices segment, the Zacks Consensus Estimate for third-quarter fiscal 2022 revenues is pegged at $902 million, suggesting an improvement of 2% from the prior-year quarter’s levels. The Zacks Consensus Estimate for operating profit in the segment is pegged at $189 million, suggesting a year-over-year decline of 2.6%.
The Zacks Consensus Estimate for the Software & Control segment’s third-quarter fiscal 2022 sales is at $580 million, suggesting year-over-year growth of 14%. The consensus mark for the segment’s operating profit is pegged at $154 million, calling for a 20% growth from the prior-year quarter’s levels. Rockwell Automation is poised well to benefit from broadening the portfolio of hardware and software products, solutions and services while gaining from investments in the cloud.
The consensus mark for the Lifecycle Services segment’s fiscal third-quarter sales is pegged at $491 million, indicating growth of 7.7% from the year-ago quarter. The segment is expected to generate an operating profit of $51 million in the quarter compared with the prior-year quarter’s $46.8 million.
Our proven model doesn’t predict an earnings beat for Rockwell Automation this season. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Rockwell Automation is -2.66%.
Zacks Rank: Rockwell Automation currently carries a Zacks Rank #3.
In the past year, Rockwell Automation’s shares have lost 26.3% compared with the industry’s decline of 26.9%.
Image Source: Zacks Investment Research
Stocks Poised to Beat Earnings Estimates
Here are some Industrial Product stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
MRC Global Inc. (MRC - Free Report) currently has an Earnings ESP of +30.27% and a Zacks Rank of 1. The Zacks Consensus Estimate for first-quarter 2022 earnings has moved up 14% in the past 30 days to 25 cents per share, suggesting year-over-year growth of 213%.
The Zacks Consensus Estimate for MRC Global’s quarterly revenues is pegged at $847 million, which indicates an increase of 23.4% from the prior-year quarter’s levels.
Crane Holdings, Co. (CR - Free Report) currently has an Earnings ESP of +6.98% and a Zacks Rank of 2. The Zacks Consensus Estimate for second-quarter 2022 earnings is currently pegged at $1.78 per share, suggesting a 2.7% decline from the year-ago quarter’s tally.
The Zacks Consensus Estimate for quarterly revenues is pinned at $800 million, highlighting year-over-year growth of 0.5%. Crane Holdings has a trailing four-quarter earnings surprise of 22.2%, on average. It has long-term earnings growth of 8.9%.
Terex Corporation (TEX - Free Report) currently has an Earnings ESP of +4.40% and a Zacks Rank #3. The Zacks Consensus Estimate for second-quarter 2022 earnings has gone down 1.2% in the past 30 days and is currently pegged at 85 cents per share. The projection indicates a 16.7% decline from the prior-year quarter’s tally.
The Zacks Consensus Estimate for Terex’s quarterly revenues is pegged at $1.08 billion, which indicates a year-over-year improvement of 3.7%. TEX has a trailing four-quarter earnings surprise of 49%, on average.
Image: Bigstock
What's in Store for Rockwell Automation's (ROK) Q3 Earnings?
Rockwell Automation Inc. (ROK - Free Report) is scheduled to report third-quarter fiscal 2022 results before the opening bell on Jul 27.
Q2 Performance
In the last reported quarter, Rockwell Automation’s earnings and revenues missed the respective Zacks Consensus Estimates. While the bottom line declined year over year, the top line rose year on year.
The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average surprise being negative 0.21%.
Q3 Estimates
The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $1.98 billion, indicating growth of 7% from the prior-year quarter’s levels. The same for earnings is pegged at $2.33, suggesting an increase of 0.87% from the year-ago quarter’s figure. The earnings estimates have undergone downward revisions in the past 30 days.
Factors to Note
Rockwell Automation has been witnessing improvement in its order levels in the past few quarters. In the last reported quarter, total orders rose 37% year over year, driven by robust demand for core automation and digital transformation solutions. Per the Federal Reserve, total industrial production rose at an annual rate of 6.1% in the April-June quarter. This might have contributed to the company’s order book in the fiscal third quarter. Strong demand for software and cyber security services and a robust order backlog are likely to get reflected in Rockwell Automation’s fiscal third-quarter top line. Improved material flow from key suppliers is likely to have improved component shipments in the quarter.
These above-mentioned benefits might have been offset by the ongoing supply-chain constraints. The manufacturing supply chain continues to be strained by the sharp rise in demand and the ongoing shortages of electronic components, along with pandemic-related and other global events that have put additional pressures on manufacturing output and freight lanes. Inflated costs for commodities, components and freight services are expected to have dented the company’s margins in the quarter to be reported. The company’s focus on process improvement, price increase actions, functional streamlining and material cost savings are likely to have negated some of these impacts.
Segment Expectations
For the Intelligent Devices segment, the Zacks Consensus Estimate for third-quarter fiscal 2022 revenues is pegged at $902 million, suggesting an improvement of 2% from the prior-year quarter’s levels. The Zacks Consensus Estimate for operating profit in the segment is pegged at $189 million, suggesting a year-over-year decline of 2.6%.
The Zacks Consensus Estimate for the Software & Control segment’s third-quarter fiscal 2022 sales is at $580 million, suggesting year-over-year growth of 14%. The consensus mark for the segment’s operating profit is pegged at $154 million, calling for a 20% growth from the prior-year quarter’s levels. Rockwell Automation is poised well to benefit from broadening the portfolio of hardware and software products, solutions and services while gaining from investments in the cloud.
The consensus mark for the Lifecycle Services segment’s fiscal third-quarter sales is pegged at $491 million, indicating growth of 7.7% from the year-ago quarter. The segment is expected to generate an operating profit of $51 million in the quarter compared with the prior-year quarter’s $46.8 million.
Rockwell Automation, Inc. Price and EPS Surprise
Rockwell Automation, Inc. price-eps-surprise | Rockwell Automation, Inc. Quote
What the Zacks Model Unveils
Our proven model doesn’t predict an earnings beat for Rockwell Automation this season. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Rockwell Automation is -2.66%.
Zacks Rank: Rockwell Automation currently carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Share Price Performance
In the past year, Rockwell Automation’s shares have lost 26.3% compared with the industry’s decline of 26.9%.
Image Source: Zacks Investment Research
Stocks Poised to Beat Earnings Estimates
Here are some Industrial Product stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
MRC Global Inc. (MRC - Free Report) currently has an Earnings ESP of +30.27% and a Zacks Rank of 1. The Zacks Consensus Estimate for first-quarter 2022 earnings has moved up 14% in the past 30 days to 25 cents per share, suggesting year-over-year growth of 213%.
The Zacks Consensus Estimate for MRC Global’s quarterly revenues is pegged at $847 million, which indicates an increase of 23.4% from the prior-year quarter’s levels.
Crane Holdings, Co. (CR - Free Report) currently has an Earnings ESP of +6.98% and a Zacks Rank of 2. The Zacks Consensus Estimate for second-quarter 2022 earnings is currently pegged at $1.78 per share, suggesting a 2.7% decline from the year-ago quarter’s tally.
The Zacks Consensus Estimate for quarterly revenues is pinned at $800 million, highlighting year-over-year growth of 0.5%. Crane Holdings has a trailing four-quarter earnings surprise of 22.2%, on average. It has long-term earnings growth of 8.9%.
Terex Corporation (TEX - Free Report) currently has an Earnings ESP of +4.40% and a Zacks Rank #3. The Zacks Consensus Estimate for second-quarter 2022 earnings has gone down 1.2% in the past 30 days and is currently pegged at 85 cents per share. The projection indicates a 16.7% decline from the prior-year quarter’s tally.
The Zacks Consensus Estimate for Terex’s quarterly revenues is pegged at $1.08 billion, which indicates a year-over-year improvement of 3.7%. TEX has a trailing four-quarter earnings surprise of 49%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.