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Rockwell Automation Inc. (ROK) reported adjusted earnings per share (EPS) of $3.04 in fourth-quarter fiscal 2022 (ended Sep 30, 2022), surpassing the Zacks Consensus Estimate of $2.94. The bottom line surged 30% year over year on higher sales, which was somewhat offset by a higher tax rate and unfavorable currency impact.
Including one-time items, earnings came in at $2.91 per share in the fiscal fourth quarter compared with the prior-year quarter’s 67 cents per share.
Total revenues were $2,126 million, up 17.6% from the prior-year quarter. The top line beat the Zacks Consensus Estimate of $2,113 million. Organic sales in the quarter were up 20.5% and acquisitions contributed 1.9% to sales growth, while currency translation had a negative impact of 4.8%.
Rockwell Automation, Inc. Price, Consensus and EPS Surprise
The cost of sales increased 14% year over year to around $1,240 million. Gross profit rose 23% year over year to $886 million. Selling, general and administrative expenses inched up 0.3% year over year to $449 million.
Consolidated segment operating income totaled $495 million, up 53% from the prior-year quarter. The total segment operating margin was 23.3% in the fiscal fourth quarter, higher than the prior-year’s 17.9%. The improvement in margins was driven by higher sales which was partially offset by an unfavorable currency impact.
Segment Results
Intelligent Devices: Net sales amounted to $957 million during the fiscal fourth quarter, up 11.7% year over year. Segment operating earnings totaled $213 million compared with the year-earlier quarter’s $166 million. The segment operating margin decreased to 22.3% in the quarter from the year-ago quarter’s 19.4%.
Software & Control: Net sales rose 33% year over year to $657 million in the reported quarter. Segment operating earnings surged 90% year over year to $227 million. The segment operating margin was 34.5% compared with 24.2% in the year-earlier quarter.
Lifecycle Services: Net sales for the segment were $512 million in the reported quarter, up 12% year over year. Segment operating earnings totaled $55 million compared with the prior-year quarter’s $37 million. The segment operating margin was 10.7% in the reported quarter compared with the year-earlier quarter’s 8.1%.
Financials
As of the end of the fiscal 2022, cash and cash equivalents were around $491 million compared with $662 million as of the end of fiscal 2021. Total debt was around $3.84 billion at the end of fiscal 2022 compared with $3.98 billion at fiscal 2021-end.
Cash flow from operations in fiscal 2022 was $823 million compared with the prior-year’s fiscal $1,261 million. Return on invested capital was 15.2% as of Sep 30, 2022.
During fiscal 2022, ROK repurchased around 1.3 million shares for $301 million. As of the end of fiscal 2022, $1.3 billion was available under the existing share-repurchase authorization.
Fiscal 2022 Performance
For fiscal 2022, Rockwell Automation’s adjusted earnings were $9.49, which surpassed the Zacks Consensus Estimate of $9.40. It was 1% higher than the prior fiscal as higher sales and lower incentive compensation were partially offset by higher investment spending, higher tax rate, and a prior year favorable legal settlement. Including one-time items, the company’s earnings were $7.97 per share compared with $11.58 in fiscal 2021.
Total revenues advanced 11% year over year to around $7,760 million, which beat the Zacks Consensus Estimate of $7,750 million. Full-year orders were reported at more than $10 billion, marking a 20% increase year over year
Fiscal 2023 Guidance
Backed by solid backlog levels and demand as well as assuming supply-chain stabilization, Rockwell Automation expects strong double-digit earnings growth in fiscal 2023. It expects reported sales growth at 7.5-11.5% for fiscal 2023 and organic sales growth is projected at 9-13%. Adjusted earnings per share for fiscal 2023 is expected between $10.20 and $11.00.
Share Price Performance
Image Source: Zacks Investment Research
In the past year, Rockwell Automation’s shares have fallen 25.6% compared with the industry’s decline of 26.2%.
Zacks Rank & Stocks to Consider
Rockwell Automation currently carries a Zacks Rank #3 (Hold).
Tenaris delivered a trailing four-quarter earnings surprise of 34%, on average. The Zacks Consensus Estimate for the company for 2022 indicates year-over-year growth of around 120%. The estimate has moved up 3% in the past 60 days. The TS stock has risen 40% in the past year.
Enerpac Tool delivered a four-quarter earnings surprise of 3.4%, on average. EPAC’s earnings estimates have increased 9% for fiscal 2023 (ending August 2023) in the past 60 days. The estimate indicates year-over-year growth of 44.6%. EPAC’s shares have gained 18% in the past year.
Reliance Steel & Aluminum’s earnings surprise in the last four quarters was 13.4%, on average. It has an expected earnings growth rate of 27.9% for fiscal 2022. The earnings estimates have moved up 0.1% over the past 60 days. The RS stock has gained 34% in the past year.
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Rockwell Automation (ROK) Q4 Earnings & Sales Beat Estimates
Rockwell Automation Inc. (ROK) reported adjusted earnings per share (EPS) of $3.04 in fourth-quarter fiscal 2022 (ended Sep 30, 2022), surpassing the Zacks Consensus Estimate of $2.94. The bottom line surged 30% year over year on higher sales, which was somewhat offset by a higher tax rate and unfavorable currency impact.
Including one-time items, earnings came in at $2.91 per share in the fiscal fourth quarter compared with the prior-year quarter’s 67 cents per share.
Total revenues were $2,126 million, up 17.6% from the prior-year quarter. The top line beat the Zacks Consensus Estimate of $2,113 million. Organic sales in the quarter were up 20.5% and acquisitions contributed 1.9% to sales growth, while currency translation had a negative impact of 4.8%.
Rockwell Automation, Inc. Price, Consensus and EPS Surprise
Rockwell Automation, Inc. price-consensus-eps-surprise-chart | Rockwell Automation, Inc. Quote
Operational Update
The cost of sales increased 14% year over year to around $1,240 million. Gross profit rose 23% year over year to $886 million. Selling, general and administrative expenses inched up 0.3% year over year to $449 million.
Consolidated segment operating income totaled $495 million, up 53% from the prior-year quarter. The total segment operating margin was 23.3% in the fiscal fourth quarter, higher than the prior-year’s 17.9%. The improvement in margins was driven by higher sales which was partially offset by an unfavorable currency impact.
Segment Results
Intelligent Devices: Net sales amounted to $957 million during the fiscal fourth quarter, up 11.7% year over year. Segment operating earnings totaled $213 million compared with the year-earlier quarter’s $166 million. The segment operating margin decreased to 22.3% in the quarter from the year-ago quarter’s 19.4%.
Software & Control: Net sales rose 33% year over year to $657 million in the reported quarter. Segment operating earnings surged 90% year over year to $227 million. The segment operating margin was 34.5% compared with 24.2% in the year-earlier quarter.
Lifecycle Services: Net sales for the segment were $512 million in the reported quarter, up 12% year over year. Segment operating earnings totaled $55 million compared with the prior-year quarter’s $37 million. The segment operating margin was 10.7% in the reported quarter compared with the year-earlier quarter’s 8.1%.
Financials
As of the end of the fiscal 2022, cash and cash equivalents were around $491 million compared with $662 million as of the end of fiscal 2021. Total debt was around $3.84 billion at the end of fiscal 2022 compared with $3.98 billion at fiscal 2021-end.
Cash flow from operations in fiscal 2022 was $823 million compared with the prior-year’s fiscal $1,261 million. Return on invested capital was 15.2% as of Sep 30, 2022.
During fiscal 2022, ROK repurchased around 1.3 million shares for $301 million. As of the end of fiscal 2022, $1.3 billion was available under the existing share-repurchase authorization.
Fiscal 2022 Performance
For fiscal 2022, Rockwell Automation’s adjusted earnings were $9.49, which surpassed the Zacks Consensus Estimate of $9.40. It was 1% higher than the prior fiscal as higher sales and lower incentive compensation were partially offset by higher investment spending, higher tax rate, and a prior year favorable legal settlement. Including one-time items, the company’s earnings were $7.97 per share compared with $11.58 in fiscal 2021.
Total revenues advanced 11% year over year to around $7,760 million, which beat the Zacks Consensus Estimate of $7,750 million. Full-year orders were reported at more than $10 billion, marking a 20% increase year over year
Fiscal 2023 Guidance
Backed by solid backlog levels and demand as well as assuming supply-chain stabilization, Rockwell Automation expects strong double-digit earnings growth in fiscal 2023. It expects reported sales growth at 7.5-11.5% for fiscal 2023 and organic sales growth is projected at 9-13%. Adjusted earnings per share for fiscal 2023 is expected between $10.20 and $11.00.
Share Price Performance
Image Source: Zacks Investment Research
In the past year, Rockwell Automation’s shares have fallen 25.6% compared with the industry’s decline of 26.2%.
Zacks Rank & Stocks to Consider
Rockwell Automation currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Tenaris (TS - Free Report) , Enerpac Tool Group Corp. (EPAC - Free Report) and Reliance Steel & Aluminum Co. (RS - Free Report) . While TS and EPAC sport a Zacks Rank #1 (Strong Buy), RS carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
Tenaris delivered a trailing four-quarter earnings surprise of 34%, on average. The Zacks Consensus Estimate for the company for 2022 indicates year-over-year growth of around 120%. The estimate has moved up 3% in the past 60 days. The TS stock has risen 40% in the past year.
Enerpac Tool delivered a four-quarter earnings surprise of 3.4%, on average. EPAC’s earnings estimates have increased 9% for fiscal 2023 (ending August 2023) in the past 60 days. The estimate indicates year-over-year growth of 44.6%. EPAC’s shares have gained 18% in the past year.
Reliance Steel & Aluminum’s earnings surprise in the last four quarters was 13.4%, on average. It has an expected earnings growth rate of 27.9% for fiscal 2022. The earnings estimates have moved up 0.1% over the past 60 days. The RS stock has gained 34% in the past year.