Rockwell Automation Reports First Quarter 2014 Results
• Sales up 7 percent year over year
• Adjusted EPS of $1.47, up 20 percent
• Diluted EPS of $1.41
• Company raises low end of fiscal 2014 sales and earnings guidance
Rockwell Automation, Inc. (NYSE: ROK) today reported fiscal 2014 first quarter sales of $1,591.7 million, up 7 percent from $1,489.2 million in the first quarter of fiscal 2013. Organic sales growth was also 7 percent as the net effect of acquisitions and currency translation was negligible.
Fiscal 2014 first quarter Adjusted EPS was $1.47, up 20 percent compared to Adjusted EPS of $1.23 in the first quarter of fiscal 2013. Total segment operating earnings were $328.0 million in the first quarter of fiscal 2014, up 19 percent from $276.0 million in the same period of fiscal 2013. Total segment operating margin increased to 20.6 percent from 18.5 percent a year ago, primarily due to higher sales.
On a GAAP basis, fiscal 2014 first quarter net income was $198.1 million or $1.41 per share, compared to $161.4 million or $1.14 per share in the first quarter of fiscal 2013. Pre-tax margin increased to 17.1 percent in the first quarter of fiscal 2014 from 14.6 percent in the same period last year.
Commenting on the results, Keith D. Nosbusch, chairman and chief executive officer, said, “Sales in the U.S. were robust and I was pleased to see the Asia Pacific region return to growth. Overall organic sales growth of 7 percent and Adjusted Earnings per Share growth of 20 percent provide a strong start to the fiscal year.”
Commenting on the outlook, Nosbusch added, “Given our performance in the first quarter, we are raising the low end of our guidance. We now expect organic sales growth of 3 to 6 percent and Adjusted EPS of $6.00 to $6.35.”
Following is a discussion of first quarter results for both segments.
Architecture & Software
Architecture & Software fiscal 2014 first quarter sales were $695.9 million, an increase of 6 percent from $657.5 million in the same period last year. Segment operating earnings were $211.9 million in the first quarter of fiscal 2014 compared to $183.2 million in the first quarter of fiscal 2013. Segment operating margin increased to 30.4 percent in the first quarter of fiscal 2014 from 27.9 percent a year ago, primarily due to higher sales. The first quarter results also benefited from the favorable resolution of certain legal matters, which contributed approximately 1 percentage point to the segment operating margin in the quarter.
Control Products & Solutions
Control Products & Solutions fiscal 2014 first quarter sales were $895.8 million, an increase of 8 percent from $831.7 million in the same period last year. Organic sales increased 9 percent and currency translation reduced sales by 1 percentage point. Segment operating earnings were $116.1 million in the first quarter of fiscal 2014 compared to $92.8 million in the first quarter of fiscal 2013. Segment operating margin increased to 13.0 percent in the first quarter of fiscal 2014 from 11.2 percent a year ago, primarily due to higher sales.
Free cash flow was $178.6 million in the first quarter of fiscal 2014. Cash flow provided by operating activities was $203.5 million in the first quarter of fiscal 2014. Return on invested capital was 31.4 percent.
Fiscal 2014 first quarter general corporate-net expense was $21.7 million compared to $18.5 million in the first quarter of fiscal 2013.
The effective tax rate in the first quarter of fiscal 2014 was 27.4 percent compared to 25.7 percent in the first quarter of fiscal 2013. The Adjusted Effective Tax Rate for the first quarter of fiscal 2014 was 27.8 percent compared to 26.6 percent a year ago. The Company now expects the full-year Adjusted Effective Tax Rate for fiscal 2014 to be in the range of 26 to 27 percent.
During the first quarter of fiscal 2014, the Company repurchased 1.0 million shares of its common stock at a cost of $110.7 million. At December 31, 2013, $424.4 million remained available under the $1.0 billion share repurchase authorization.
Organic sales, total segment operating earnings, total segment operating margin, Adjusted Income, Adjusted EPS, Adjusted Effective Tax Rate, free cash flow and return on invested capital are non-GAAP measures that are reconciled to GAAP measures in the attachments to this release.
A conference call to discuss our financial results will take place at 8:30 A.M. Eastern Time on January 29, 2014. The call and related financial charts will be webcast and accessible via the Rockwell Automation website (http://www.rockwellautomation.com/investors/).
This news release contains statements (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “project,” “plan,” “expect,” “anticipate,” “will,” “intend” and other similar expressions may identify forward-looking statements. Actual results may differ materially from those projected as a result of certain risks and uncertainties, many of which are beyond our control, including but not limited to:
• macroeconomic factors, including global and regional business conditions, the availability and cost of capital, the cyclical nature of our customers’ capital spending, sovereign debt concerns and currency exchange rates;
• laws, regulations and governmental policies affecting our activities in the countries where we do business;
• the successful development of advanced technologies and demand for and market acceptance of new and existing products;
• the availability, effectiveness and security of our information technology systems;
• competitive products, solutions and services and pricing pressures, and our ability to provide high quality products, solutions and services;
• a disruption of our operations due to natural disasters, acts of war, strikes, terrorism, social unrest or other causes;
• intellectual property infringement claims by others and the ability to protect our intellectual property;
• our ability to address claims by taxing authorities in the various jurisdictions where we do business;
• our ability to attract and retain qualified personnel;
• our ability to manage costs related to employee retirement and health care benefits;
• the uncertainties of litigation, including liabilities related to the safety and security of the products, solutions and services we sell;
• our ability to manage and mitigate the risks associated with our solutions and services businesses;
• a disruption of our distribution channels;
• the availability and price of components and materials;
• the successful integration and management of acquired businesses;
• the successful execution of our cost productivity and globalization initiatives; and
• other risks and uncertainties, including but not limited to those detailed from time to time in our Securities and Exchange Commission (SEC) filings.
These forward-looking statements reflect our beliefs as of the date of filing this release. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Rockwell Automation, Inc. (NYSE: ROK), the world’s largest company dedicated to industrial automation and information, makes its customers more productive and the world more sustainable. Headquartered in Milwaukee, Wis., Rockwell Automation employs about 22,000 people serving customers in more than 80 countries.
Rockwell Automation GmbH
Rockwell Automation, Inc, (NYSE: ROK), weltgrößter spezialisierter Anbieter von industriellen Automatisierungs- und Informationslösungen, unterstützt seine Kunden dabei, produktiver und nachhaltiger zu produzieren. Das Unternehmen mit Hauptsitz in Milwaukee, Wisconsin, U.S.A., beschäftigt etwa 22.000 Mitarbeiter in mehr als 80 Ländern.
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