Rockwell Automation, Inc. (NYSE: ROK) today reported fiscal 2013 second quarter sales of $1,522.8 million, down 2 percent from $1,561.1 million in the second quarter of fiscal 2012.
Fiscal 2013 second quarter Adjusted EPS was $1.33, up 11 percent compared to Adjusted EPS of $1.20 in the second quarter of fiscal 2012. Total segment operating earnings were $285.2 million compared to $276.5 million in the same period of 2012. Total segment operating margin increased to 18.7 percent from 17.7 percent a year ago, with strong productivity offsetting the impact of lower volume.
Fiscal 2013 second quarter net income was $175.9 million or $1.24 per share, compared to $167.8 million or $1.16 per share in the second quarter of fiscal 2012. Pre-tax margin increased to 14.9 percent from 14.3 percent in the same period last year.
In order to provide transparency into the operating results of its business, effective with the first quarter of fiscal 2013, the Company is providing non-GAAP measures (Adjusted Income, Adjusted EPS and Adjusted Effective Tax Rate) that exclude non-operating pension costs and their related tax effects. The Company defines non-operating pension costs as defined benefit plan interest cost, expected return on plan assets, amortization of actuarial gains and losses and the impacts of any plan curtailments or settlements. In addition, the Company has redefined segment operating earnings to exclude non-operating pension costs. Prior year results are provided on a comparable basis.
Commenting on the results, Keith D. Nosbusch, chairman and chief executive officer, said, "I am pleased with 11 percent earnings per share growth despite the 2 percent sales decline. Solid sales growth in the Americas, with declines in EMEA and Asia-Pacific, reflect industrial markets that remain uneven around the world. Free cash flow was very good in the quarter and we announced an 11 percent dividend increase earlier this month. We have increased our dividend by almost 80 percent over the last four years. We are confident in the sustainability of our cash flows and remain committed to returning cash to shareowners."
Outlook
Commenting on the outlook, Nosbusch added, "Given our first half results and our expectation that sluggish market conditions will persist, we are lowering our fiscal 2013 sales outlook to a range of $6.25 to $6.45 billion. However, we are maintaining the mid-point of Adjusted EPS guidance and narrowing the range to $5.40 to $5.70. We will continue to closely monitor business conditions and appropriately manage costs while investing in our best growth opportunities."
Following is a discussion of second quarter results for both segments.
Architecture & Software
Architecture & Software fiscal 2013 second quarter sales were $639.2 million, a decrease of 4 percent from $664.8 million last year. Organic sales decreased 3 percent. Segment operating earnings were $169.9 million in the second quarter of fiscal 2013 compared to $170.6 million in 2012. Segment operating margin increased to 26.6 percent from 25.7 percent a year ago.
Control Products & Solutions
Control Products & Solutions fiscal 2013 second quarter sales were $883.6 million, a decrease of 1 percent from $896.3 million last year. Acquisitions and currency translation had a negligible impact. Segment operating earnings were $115.3 million in the second quarter of fiscal 2013 compared to $105.9 million in 2012. Segment operating margin increased to 13.0 percent from 11.8 percent a year ago.
Other Information
Free cash flow was $179.6 million in the second quarter of fiscal 2013. Cash flow provided by operating activities was $202.6 million in the second quarter of fiscal 2013.
Fiscal 2013 second quarter general corporate-net expense decreased to $18.1 million from $24.5 million in 2012, primarily due to legacy environmental charges in 2012.
The effective tax rate in the second quarter of 2013 was 22.5 percent compared to 24.9 percent in the second quarter of 2012. The Adjusted Effective Tax Rate for the second quarter of fiscal 2013 was 23.6 percent compared to 25.3 percent a year ago. The decrease in the tax rates is primarily due to the impact of the retroactive extension of the U.S. federal research and development tax credit. The Company now expects the full-year Adjusted Effective Tax Rate for fiscal 2013 to be approximately 25 percent.
During the second quarter of fiscal 2013, the Company repurchased 1.4 million shares of its common stock at a cost of $125.9 million. At March 31, 2013, $723.0 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.
Conference Call
A conference call to discuss our financial results will take place at 8:30 A.M. Eastern Time on April 24, 2013. The call and related financial charts will be webcast and accessible via the Rockwell Automation website (
http://www.rockwellautomation.com/...
Fiscal 2013 second quarter Adjusted EPS was $1.33, up 11 percent compared to Adjusted EPS of $1.20 in the second quarter of fiscal 2012. Total segment operating earnings were $285.2 million compared to $276.5 million in the same period of 2012. Total segment operating margin increased to 18.7 percent from 17.7 percent a year ago, with strong productivity offsetting the impact of lower volume.
Fiscal 2013 second quarter net income was $175.9 million or $1.24 per share, compared to $167.8 million or $1.16 per share in the second quarter of fiscal 2012. Pre-tax margin increased to 14.9 percent from 14.3 percent in the same period last year.
In order to provide transparency into the operating results of its business, effective with the first quarter of fiscal 2013, the Company is providing non-GAAP measures (Adjusted Income, Adjusted EPS and Adjusted Effective Tax Rate) that exclude non-operating pension costs and their related tax effects. The Company defines non-operating pension costs as defined benefit plan interest cost, expected return on plan assets, amortization of actuarial gains and losses and the impacts of any plan curtailments or settlements. In addition, the Company has redefined segment operating earnings to exclude non-operating pension costs. Prior year results are provided on a comparable basis.
Commenting on the results, Keith D. Nosbusch, chairman and chief executive officer, said, "I am pleased with 11 percent earnings per share growth despite the 2 percent sales decline. Solid sales growth in the Americas, with declines in EMEA and Asia-Pacific, reflect industrial markets that remain uneven around the world. Free cash flow was very good in the quarter and we announced an 11 percent dividend increase earlier this month. We have increased our dividend by almost 80 percent over the last four years. We are confident in the sustainability of our cash flows and remain committed to returning cash to shareowners."
Outlook
Commenting on the outlook, Nosbusch added, "Given our first half results and our expectation that sluggish market conditions will persist, we are lowering our fiscal 2013 sales outlook to a range of $6.25 to $6.45 billion. However, we are maintaining the mid-point of Adjusted EPS guidance and narrowing the range to $5.40 to $5.70. We will continue to closely monitor business conditions and appropriately manage costs while investing in our best growth opportunities."
Following is a discussion of second quarter results for both segments.
Architecture & Software
Architecture & Software fiscal 2013 second quarter sales were $639.2 million, a decrease of 4 percent from $664.8 million last year. Organic sales decreased 3 percent. Segment operating earnings were $169.9 million in the second quarter of fiscal 2013 compared to $170.6 million in 2012. Segment operating margin increased to 26.6 percent from 25.7 percent a year ago.
Control Products & Solutions
Control Products & Solutions fiscal 2013 second quarter sales were $883.6 million, a decrease of 1 percent from $896.3 million last year. Acquisitions and currency translation had a negligible impact. Segment operating earnings were $115.3 million in the second quarter of fiscal 2013 compared to $105.9 million in 2012. Segment operating margin increased to 13.0 percent from 11.8 percent a year ago.
Other Information
Free cash flow was $179.6 million in the second quarter of fiscal 2013. Cash flow provided by operating activities was $202.6 million in the second quarter of fiscal 2013.
Fiscal 2013 second quarter general corporate-net expense decreased to $18.1 million from $24.5 million in 2012, primarily due to legacy environmental charges in 2012.
The effective tax rate in the second quarter of 2013 was 22.5 percent compared to 24.9 percent in the second quarter of 2012. The Adjusted Effective Tax Rate for the second quarter of fiscal 2013 was 23.6 percent compared to 25.3 percent a year ago. The decrease in the tax rates is primarily due to the impact of the retroactive extension of the U.S. federal research and development tax credit. The Company now expects the full-year Adjusted Effective Tax Rate for fiscal 2013 to be approximately 25 percent.
During the second quarter of fiscal 2013, the Company repurchased 1.4 million shares of its common stock at a cost of $125.9 million. At March 31, 2013, $723.0 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.
Conference Call
A conference call to discuss our financial results will take place at 8:30 A.M. Eastern Time on April 24, 2013. The call and related financial charts will be webcast and accessible via the Rockwell Automation website (
http://www.rockwellautomation.com/...
