Rockwell Automation (ROK Quick QuoteROK - Free Report) is the world’s largest company dedicated to industrial automation. Its products, services and solutions address a broad range of challenges in every major industrial sector, from automotive and tire to mining and oil and gas, from pharmaceuticals to food and beverage. Its brands include Allen-Bradley, Reliance Electric and Rockwell Software.

Rockwell’s growth and performance strategy seeks to achieve growth rates in excess of the automation market by expanding its served market, diversifying sales streams by broadening portfolio of products, solutions and services, expanding its global presence, growing market share and making acquisitions. Heavy industry end markets including oil and gas have not yet stabilized, and Rockwell Automation foresees continued softness in key emerging markets. In the U.S., its largest market, a strong dollar is adversely affecting producers and OEMs. Moreover, weakness in the mining industry and lack of major projects also remain concerns.

Investors have thus been eagerly awaiting the company’s fiscal 2016 third quarter earnings report. Let’s have a quick look at the earnings release of this Milwaukee, WI-based provider industrial automation power, control, and information solutions.

Estimate Trend & Surprise History: The earnings estimate revisions for Rockwell Automation has remained static prior to the earnings release. The Zacks Consensus Estimate for the third quarter of fiscal 2016 currently stands at $1.46. As regards earnings surprise, Rockwell Automation outpaced the Zacks Consensus Estimate in three of the past four quarters, with an average beat of 1.61%.

ROCKWELL AUTOMT Price and EPS Surprise

ROCKWELL AUTOMT Price and EPS Surprise | ROCKWELL AUTOMT Quote

Earnings: Rockwell Automation beat estimates by a margin of 6%. Our consensus called for third quarter fiscal 2016 EPS of $1.46, while the company reported adjusted EPS of $1.55.

Revenue: Rockwell Automation missed on the revenue front. It reported third quarter fiscal 2016 revenues of $1,474 million, fell short the Zacks Consensus Estimate of $1,487 million.

Key Developments to Note: Rockwell Automation revised its fiscal 2016 adjusted EPS guidance to $5.80 to $6.00 from the previous range of $5.75 to $6.15. The company expects revenue to decline 7% for the full year, which includes a currency headwind of about 3% and an organic sales decline of 4%. Rockwell Automation reduced fiscal 2016 sales outlook due to weaker-than-expected orders and sales performance in its solutions and services businesses in the third quarter. Nevertheless, the company believes sequential sales improvement in the second half of the fiscal year, but not as much as anticipated in April.

Zacks Rank: Currently, Rockwell Automation has a Zacks Rank #3 (Hold). However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change.

Market Reaction: Rockwell Automation’s shares were inactive following the release. It would be interesting to see how the market reacts to the results during the trading session today.

Check back later for our full write up on this Rockwell Automation earnings report later!

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