Rockwell Automation, Inc.
CEO : Mr. Blake D. Moret
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q1 | 6.7% YoY | 61.2% | 61.7% | 2023-01-26 |
Blake Moret says,
Q1 2023 Results
- Organic sales and earnings were up YoY and better than expected despite dynamic supply chain environment
- Orders and backlog were up sequentially
- Total sales grew almost 7% vs prior year, with organic sales up 10% YoY
- Segment margin of 20% was up over 100 basis points YoY and better than expected
- Adjusted EPS grew 15% YoY
End Market Performance
- All three industry segments saw strong YoY growth
- Discrete industries sales were up low teens, with automotive sales up 25% YoY
- Semiconductor sales grew over 20% YoY
- eCommerce and warehouse automation sales were down low teens YoY, but expect continued investments in upgrading existing facilities
- Food and beverage sales grew over 15% YoY in Hybrid industry segment
- Process segment grew mid-single digits YoY, led by growth in metals and oil and gas
Organic Regional Sales
- North America organic sales grew 8% YoY
- Latin America sales were up 6%
- EMEA sales increased by over 13%
- Asia Pacific was up 16%
Fiscal 2023 Outlook
- Increasing top line and bottom line outlook for fiscal 2023
- Guidance projects total reported sales growth of 12%
- Organic sales growth of 13% assumes continued supply chain improvement
- Acquisitions to contribute a point of profitable growth and currency to be a headwind of about 2 points
- ARR expected to grow 15%
- Segment margin expected to increase by over 100 basis points YoY
- Adjusted EPS expected to grow 17% vs prior year
Nick Gangestad says,
Q1 2023 Financial Performance
- First quarter reported sales increased by 6.7% compared to the previous year, with organic sales increasing by 9.9% and acquisitions contributing 80 basis points to total growth
- Segment operating margin expanded to 20.2% and was significantly higher than expected
- Adjusted EPS of $2.46 grew 15% versus prior year
- Free cash flow of $42 million was $91 million higher compared to last year
Segment Performance Overview
- Organic sales grew double digits in Software and Control and Lifecycle Services with Intelligent Devices growing 7% year-over-year
- Intelligent Devices’ margin declined by 130 basis points year-over-year due to higher resiliency spend and an unfavorable currency impact
- Segment margin for software and control increased by 630 basis points compared to last year on positive price cost and higher sales
Fiscal 2023 Guidance
- Reported sales guidance increased to about $8.7 billion, representing 12% growth at the midpoint
- Organic sales growth is expected to be in a range of 11% to 15% or 13% at the midpoint, with volume being 9 points of growth and price being 4 points of growth
- Full year segment operating margin is expected to be about 21%
- Adjusted EPS guidance increased to $10.70 to $11.50, representing 17% adjusted EPS growth at the midpoint
- Full year fiscal 2023 free cash flow conversion is expected to be about 95% of adjusted income
Q & A sessions,
Backlog and CapEx
- Expect higher backlog at the end of fiscal 2023 than traditional levels, and for it to continue into fiscal year 2024
- Important verticals are investing in CapEx, with high levels of investment in EV, battery, and oil and gas industries
Automation and Innovation
- Automation is key to solving customers’ challenges and increasing productivity
- Rockwell is accelerating innovation with new product introductions and recent acquisitions showcased at their Automation Fair in Chicago
- Rockwell is expanding its sustainability portfolio through increased presence in renewables
Q1 Results
- Organic sales up 10% YoY, better than expected despite a dynamic supply chain environment
- Intelligent Devices business segment had remarkable order growth in their independent cart technology business, driven by large multi-year deals across many industries such as EV, material handling, and semiconductor
- Information Solutions and Connected Services sales had another quarter of double-digit YoY growth, with significant upticks in large multisite and multiyear deals
Annual Recurring Revenue (ARR)
- Rockwell has a focus on adding ARR, which is growing double-digits as a relatively small part of the total business
- The company is retooling internal business processes to take orders with a mix of hardware, software, and services to make it easier for customers and channels to expand subscription content
Economic Environment
- Automation is seen as helping industries be more resilient and enable greater productivity from their workforce
- Rockwell is aware of macroeconomic concerns but expects the huge backlog to go well into 2024 and beyond to minimize the effect on their operations
No bad stock 