Rockwell Automation, Inc. (ROK) reported first quarter fiscal 2013 earnings of $1.23 per share, down 6% from $1.31 per share earned in the prior-year quarter. The results missed the Zacks Consensus Estimate of $1.26.
Sales inched up 1% to $1.489 billion in the quarter, surpassing the Zacks Consensus Estimate of $1.481 billion. Organic sales increased 1.5% but currency translation reduced sales by less than 1 percentage point. Growth witnessed in Latin America and the U.S markets was mitigated by declines in Asia-Pacific and Europe, Middle East, Africa (:EMEA).
Cost of sales increased 3% year over year to $882 million in the quarter. Gross profit declined 2% year over year to $607 million, leading to a 120 basis points (bps) contraction in gross margin to 40.8%.
Selling, general and administrative expenses increased 3% to $373 million from the prior-year quarter. Segment operating income was $276 million in the quarter compared with $292 million in the first quarter of 2012. Segment operating margin contracted 130 basis points to 18.5%.
Architecture & Software: Net sales inched up 1% to $657 million in the quarter. Organic sales increased 2% while currency translation affected sales by 1%. Operating earnings were $183.2 million, down 3% year over year. Segment operating margin was 27.9% compared with 29.1% a year ago.
Control Products & Solutions: Net sales increased 1% to $831.7 million in the quarter. Segment operating earnings declined 10% to $92.8 million. Segment operating margin was 11.2%, a 130-basis point contraction year over year.
Rockwell Automation had cash and cash equivalents of $954.3 million as of Dec 31, 2012 compared with $903.9 million as of Sep 30, 2012. Total debt was $1.16 billion as of Dec 31, 2012, compared with $1.06 billion as of Sep 30, 2012.
The debt-to-capitalization ratio was 37% as of Dec 31, 2012, compared with 36% as of Sep 30, 2012. In the first quarter of fiscal 2013, the company generated cash flow from operating activities of $167.3 million in contrast to cash usage of $189 million in the prior year quarter.
During the reported quarter, Rockwell Automation repurchased 1.2 million shares for $88 million. As of Dec 31, 2012, the company had $848.9 million worth of shares remaining under the $1 billion share repurchase authorization.
Rockwell Automation affirmed its sales guidance in the range of $6.35 to $6.65 billion for fiscal 2013. The company has factored in organic growth of 1% to 5% while currency translation and acquisitions will add one point of growth. It expects earnings in the range of $5.35 to $5.75 per share for the full year.
Based in Milwaukee, Wisconsin, Rockwell Automation is an original equipment manufacturer (:OEM) of industrial automation equipment, application specific integrated software and consulting design services. The company retains a short-term Zacks Rank #2 (Buy). Its peers HollySys Automation Technologies, Ltd. (HOLI), iRobot Corporation (IRBT) and ECOtality, Inc. (ECTY) have yet to announce their December quarter results.Read the Full Research Report on ROK
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