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Rockwell Automation (ROK - Free Report) reported adjusted earnings per share of $3.01 in second-quarter fiscal 2023 (ended Mar 31, 2023), surpassing the Zacks Consensus Estimate of $2.62. The bottom line surged 81% year over year on higher sales volume and positive price/costs.
Including one-time items, earnings were $2.59 per share in the fiscal second quarter compared with the prior-year quarter’s 46 cents.
Total revenues were $2,275 million, up 26% from the prior-year quarter. The top line beat the Zacks Consensus Estimate of $2,083 million. Organic sales in the quarter were up 27.3% and acquisitions contributed 1.3% to sales growth, while currency translation had a negative impact of 2.8%.
Rockwell Automation, Inc. Price, Consensus and EPS Surprise
The cost of sales increased 17% year over year to around $1,343 million. The gross profit rose 40% year over year to $932 million. Selling, general and administrative expenses moved up 17% year over year to $501 million.
Consolidated segmental operating income totaled $484 million, up 71% from the prior-year quarter. The total segment operating margin was 21.3% in the fiscal second quarter, higher than the prior year’s 15.7%. The improvement in margins was driven by positive price/costs and higher sales volume, partially negated by higher investment spending and incentive compensation.
Segmental Results
Intelligent Devices: Net sales amounted to $1,023 million in the fiscal second quarter, up 27% year over year. Segmental operating earnings totaled $207 million compared with the year-earlier quarter’s $118 million. The segment’s operating margin was 20.2% in the quarter, up from the year-ago quarter’s 14.6%.
Software & Control: Net sales rose 38.5% year over year to $741 million in the reported quarter. Segment operating earnings surged 90% year over year to $249 million. The segment’s operating margin was 33.6% compared with 24.6% in the year-earlier quarter.
Lifecycle Services: Net sales for the segment were $511 million in the reported quarter, up 10% year over year. Segmental operating earnings totaled $28 million compared with the prior-year quarter’s $33.7 million. The segment’s operating margin was 5.5% in the reported quarter compared with the year-earlier quarter’s 7.3%.
FY23 Guidance
Backed by solid backlog levels and performance in the first half of fiscal 2023, as well as improvement in the availability of electronic components, Rockwell Automation updated its reported sales growth guidance to 12.5-16.5% for fiscal 2023. This marks an increase from prior-stated growth of 10-14%. Organic growth sales guidance has been updated to 13-17% from the previously stated 11-15% for fiscal 2023. Adjusted earnings per share for fiscal 2023 are expected between $11.50 and $12.20, up from the $10.70-$11.50 mentioned earlier.
Price Performance
In the past year, Rockwell Automation’s shares have gained 5.4% compared with the industry’s growth of 3.8%.
Image Source: Zacks Investment Research
Zacks Rank and Other Stocks to Consider
Rockwell Automation currently carries a Zacks Rank #2 (Buy).
Worthington Industries has an average trailing four-quarter earnings surprise of 27.5%. The Zacks Consensus Estimate for WOR’s fiscal 2023 earnings is pegged at $4.93 per share. The consensus estimate for 2023 earnings has moved north by 17.7% in the past 60 days. Its shares gained 20% in the last year.
Manitowoc has an average trailing four-quarter earnings surprise of 38.8%. The Zacks Consensus Estimate for MTW’s 2023 earnings is pegged at 85 cents per share. The consensus estimate for 2023 earnings has moved 63.5% north in the past 60 days. MTW’s shares gained 15% in the last year.
The Zacks Consensus Estimate for OI Glass’ 2023 earnings per share is pegged at $2.59. The consensus estimate for 2023 earnings rose 0.8% in the last 60 days. OI has a trailing four-quarter average earnings surprise of 16.5%. Its shares gained 61.6% in the last year.
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Rockwell Automation (ROK) Tops Q2 Earnings Estimates, Ups View
Rockwell Automation (ROK - Free Report) reported adjusted earnings per share of $3.01 in second-quarter fiscal 2023 (ended Mar 31, 2023), surpassing the Zacks Consensus Estimate of $2.62. The bottom line surged 81% year over year on higher sales volume and positive price/costs.
Including one-time items, earnings were $2.59 per share in the fiscal second quarter compared with the prior-year quarter’s 46 cents.
Total revenues were $2,275 million, up 26% from the prior-year quarter. The top line beat the Zacks Consensus Estimate of $2,083 million. Organic sales in the quarter were up 27.3% and acquisitions contributed 1.3% to sales growth, while currency translation had a negative impact of 2.8%.
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 17% year over year to around $1,343 million. The gross profit rose 40% year over year to $932 million. Selling, general and administrative expenses moved up 17% year over year to $501 million.
Consolidated segmental operating income totaled $484 million, up 71% from the prior-year quarter. The total segment operating margin was 21.3% in the fiscal second quarter, higher than the prior year’s 15.7%. The improvement in margins was driven by positive price/costs and higher sales volume, partially negated by higher investment spending and incentive compensation.
Segmental Results
Intelligent Devices: Net sales amounted to $1,023 million in the fiscal second quarter, up 27% year over year. Segmental operating earnings totaled $207 million compared with the year-earlier quarter’s $118 million. The segment’s operating margin was 20.2% in the quarter, up from the year-ago quarter’s 14.6%.
Software & Control: Net sales rose 38.5% year over year to $741 million in the reported quarter. Segment operating earnings surged 90% year over year to $249 million. The segment’s operating margin was 33.6% compared with 24.6% in the year-earlier quarter.
Lifecycle Services: Net sales for the segment were $511 million in the reported quarter, up 10% year over year. Segmental operating earnings totaled $28 million compared with the prior-year quarter’s $33.7 million. The segment’s operating margin was 5.5% in the reported quarter compared with the year-earlier quarter’s 7.3%.
FY23 Guidance
Backed by solid backlog levels and performance in the first half of fiscal 2023, as well as improvement in the availability of electronic components, Rockwell Automation updated its reported sales growth guidance to 12.5-16.5% for fiscal 2023. This marks an increase from prior-stated growth of 10-14%. Organic growth sales guidance has been updated to 13-17% from the previously stated 11-15% for fiscal 2023. Adjusted earnings per share for fiscal 2023 are expected between $11.50 and $12.20, up from the $10.70-$11.50 mentioned earlier.
Price Performance
In the past year, Rockwell Automation’s shares have gained 5.4% compared with the industry’s growth of 3.8%.
Image Source: Zacks Investment Research
Zacks Rank and Other Stocks to Consider
Rockwell Automation currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the Industrial Products sector are Worthington Industries, Inc. (WOR - Free Report) , The Manitowoc Company, Inc. (MTW - Free Report) , and OI Glass Inc. (OI - Free Report) . WIRE and MTW sport a Zacks Rank #1 at present, and OI carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Worthington Industries has an average trailing four-quarter earnings surprise of 27.5%. The Zacks Consensus Estimate for WOR’s fiscal 2023 earnings is pegged at $4.93 per share. The consensus estimate for 2023 earnings has moved north by 17.7% in the past 60 days. Its shares gained 20% in the last year.
Manitowoc has an average trailing four-quarter earnings surprise of 38.8%. The Zacks Consensus Estimate for MTW’s 2023 earnings is pegged at 85 cents per share. The consensus estimate for 2023 earnings has moved 63.5% north in the past 60 days. MTW’s shares gained 15% in the last year.
The Zacks Consensus Estimate for OI Glass’ 2023 earnings per share is pegged at $2.59. The consensus estimate for 2023 earnings rose 0.8% in the last 60 days. OI has a trailing four-quarter average earnings surprise of 16.5%. Its shares gained 61.6% in the last year.