U.S. markets closed
  • S&P Futures

    4,129.25
    -24.25 (-0.58%)
     
  • Dow Futures

    32,924.00
    -231.00 (-0.70%)
     
  • Nasdaq Futures

    13,992.50
    -42.50 (-0.30%)
     
  • Russell 2000 Futures

    2,210.10
    -20.50 (-0.92%)
     
  • Crude Oil

    72.19
    +0.55 (+0.77%)
     
  • Gold

    1,774.70
    +5.70 (+0.32%)
     
  • Silver

    25.94
    -0.02 (-0.09%)
     
  • EUR/USD

    1.1861
    -0.0004 (-0.04%)
     
  • 10-Yr Bond

    1.4500
    -0.0610 (-4.04%)
     
  • Vix

    20.70
    +2.95 (+16.62%)
     
  • GBP/USD

    1.3798
    -0.0011 (-0.08%)
     
  • USD/JPY

    109.8680
    -0.2820 (-0.26%)
     
  • BTC-USD

    35,038.87
    -644.25 (-1.81%)
     
  • CMC Crypto 200

    868.43
    -71.51 (-7.61%)
     
  • FTSE 100

    7,017.47
    -135.96 (-1.90%)
     
  • Nikkei 225

    27,980.87
    -983.21 (-3.39%)
     

Rockwell Automation (ROK) Beats on Q2 Earnings, Hikes '21 View

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·5 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Rockwell Automation Inc. ROK reported adjusted earnings of $2.41 in second-quarter fiscal 2021 (ended Mar 31, 2021), beating the Zacks Consensus Estimate of $2.15. The bottom line, however, declined 2.4% year over year primarily due to the reinstatement of incentive compensation and a higher adjusted effective tax rate.

Including one-time items, the company’s earnings came in at $3.54 per share, reflecting a significant improvement from the year-ago quarter’s $1.13.

Total revenues were $1,776 million, up 5.6% from the prior-year quarter. The top line beat the Zacks Consensus Estimate of $1,703 million. Organic sales in the quarter were up 1.3%, currency translation had a positive impact of 2.4%. Further, acquisitions contributed 1.9% to sales.

Operational Update

Cost of sales increased 2.6% year over year to $1,009 million. Gross profit climbed 9.7% year over year to $767 million. Selling, general and administrative expenses flared up 19.6% year over year to $421 million.

Consolidated segment operating income totaled $390.1 million, up 5% from the prior-year quarter. Segment operating margin was 22% in the fiscal second quarter, flat year over year.

Rockwell Automation, Inc. Price, Consensus and EPS Surprise

Rockwell Automation, Inc. Price, Consensus and EPS Surprise
Rockwell Automation, Inc. Price, Consensus and EPS Surprise

Rockwell Automation, Inc. price-consensus-eps-surprise-chart | Rockwell Automation, Inc. Quote

Segment Results

Intelligent Devices: Net sales amounted to $850 million in the fiscal second quarter, reflecting year-over-year growth of 8%. Segment operating earnings totaled $202 million compared with the prior-year quarter’s $181 million. Segment operating margin expanded to 23.8% in the quarter compared with the year-ago quarter’s 23%, on higher sales and lower spending, partly offset by the reinstatement of incentive compensation.

Software & Control: Net sales increased 12% year over year to $502 million in the reported quarter. Segment operating earnings jumped 9.5% year over year to $149.8 million. Segment operating margin was 29.8% compared with the 30.5% recorded in the year-earlier quarter.

Lifecycle Services: Net sales for the segment amounted to $424 million in the reported quarter, reflecting a year-over-year decline of 5.4%. Segment operating earnings totaled $38 million compared with the prior-year quarter’s $54 million. Segment operating margin was 9% in the quarter compared with the year-earlier quarter’s 12.1%.

Financials

As of end of second-quarter fiscal 2021, cash and cash equivalents were around $642 million compared with $705 million as of the end of fiscal 2020. As of Mar 31, 2021, total debt was around $2 billion, relatively flat as of Sep 30, 2020.

Cash flow from operations during second-quarter fiscal 2021 was $595.4 million compared with the prior-year quarter’s $448.5 million. Return on invested capital was 44.6% as of Mar 31, 2021, compared with 25.9% as of Mar 31, 2020.

During the reported quarter, Rockwell Automation repurchased 0.4 million shares for $92 million. As of the end of second-quarter fiscal 2021, $674 million was available under the existing share-repurchase authorization.

Fiscal 2021 Guidance Raised

The company witnessed double-digit increase in orders on a sequential and year-over-year basis, driven by growth in core automation platforms, Information Solutions & Connected Services (IS/CS), and recent buyouts. Backed by solid order strength, Rockwell Automation has raised its guidance for fiscal 2021 to the band of $8.95-$9.35 from the previous estimate of $8.70-$9.10. Organic sales growth is expected between 5.5% and 8.5%, up from the prior expectation of 4.5% to 7.5%. Reported sales growth is anticipated in the range of 9% to 12%, up from the previous band of 8.5% to 11.5%. Inorganic sales growth is projected to be around 1.5% for the fiscal year.

Share Price Performance

Over the past year, Rockwell Automation’s shares have appreciated 36.4% compared with the industry’s growth of 38.4%.


Zacks Rank & Stocks to Consider

Rockwell Automation currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Industrial Products sector include Dover Corporation DOV, Caterpillar Inc. CAT and Pentair plc PNR, each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dover has a projected earnings growth rate of 21.8% for 2021. Over the past year, the company’s shares have gained 54.3%.

Caterpillar has an estimated earnings growth rate of 25.7% for the ongoing year. The company’s shares have rallied 99.7% in the past year.

Pentair has an expected earnings growth rate of 11.6% for 2021. The stock has surged 86% in a year’s time.

Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Caterpillar Inc. (CAT) : Free Stock Analysis Report

Rockwell Automation, Inc. (ROK) : Free Stock Analysis Report

Dover Corporation (DOV) : Free Stock Analysis Report

Pentair plc (PNR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research