Rockwell Automation, Inc. (NYSE: ROK) today reported record quarterly results, setting new highs for sales, earnings per share from continuing operations and return on invested capital. Fiscal 2011 third quarter sales were $1,516.2 million, up 20 percent from $1,268.1 million in the third quarter of fiscal 2010. Currency translation contributed 6 percentage points to the increase. Fiscal 2011 third quarter sales were up 4 percent sequentially compared to the second quarter of fiscal 2011. Income from continuing operations increased 50 percent to $178.8 million ($1.22 per share) compared to $119.4 million ($0.83 per share) a year ago. Net income was $179.5 million ($1.23 per share).
Total segment operating earnings were $263.3 million in the third quarter of fiscal 2011, up from $198.0 million in the same period of 2010. Total segment operating margin increased to 17.4 percent from 15.6 percent a year ago.
Free cash flow was $193.7 million in the third quarter of fiscal 2011. Return on invested capital was 29.3 percent.
Organic sales, total segment operating earnings, total segment operating margin, free cash flow and return on invested capital are non-GAAP measures that are reconciled to GAAP measures in the attachments to this release.
Commenting on the results, Keith D. Nosbusch, chairman and chief executive officer, said, "I am very pleased with the record results for the company in the third quarter. We have capitalized on the ongoing economic recovery by effectively executing our strategy. Architecture & Software had a great quarter with Logix growth of over 25 percent and its highest segment margin since the third quarter of fiscal 2007. Total company operating margin continued to improve, reaching 17.4 percent in the quarter. We closed two acquisitions in the quarter, announced a 21 percent dividend increase, and stepped up our share repurchases. We are on track for an excellent year for the company and for our shareowners."
Outlook
Commenting on the outlook, Nosbusch added, "Given our strong year-to-date results and an increased tailwind from currency, we are increasing our sales outlook for the full fiscal year to approximately $5.9 billion. Based on this sales outlook, we are raising fiscal 2011 earnings per share guidance to $4.55 to $4.65. A result in this range would represent an approximately 50 percent increase over last year and record annual earnings per share."
Following is a discussion of third quarter results for both segments.
Architecture & Software
Architecture & Software fiscal 2011 third quarter sales were $672.9 million, an increase of 21 percent from $553.9 million last year. Currency translation contributed 6 percentage points to the increase. Fiscal 2011 third quarter sales were up 8 percent sequentially compared to $624.2 million in the second quarter of fiscal 2011. Segment operating earnings were $175.9 million in the third quarter of fiscal 2011, compared to $125.4 million in 2010. Segment operating margin was 26.1 percent in the third quarter of fiscal 2011, compared to 22.6 percent a year ago primarily due to volume leverage, partially offset by spending to support growth.
Control Products & Solutions
Control Products & Solutions fiscal 2011 third quarter sales were $843.3 million, an increase of 18 percent from $714.2 million last year. Currency translation contributed 5 percentage points to the increase, while acquisitions contributed 1 percentage point. Segment operating earnings were $87.4 million in the third quarter of fiscal 2011, up from $72.6 million in the third quarter of fiscal 2010. Segment operating margin was 10.4 percent in the third quarter of fiscal 2011, compared to 10.2 percent a year ago primarily due to volume leverage, offset by spending to support growth and somewhat lower margins in our solutions businesses.
Other Information
Fiscal 2011 third quarter general corporate net expense was $22.3 million, compared to $23.1 million in the third quarter of 2010.
The effective tax rate for the third quarter of fiscal 2011 was 19.2 percent; the Company now expects the full-year tax rate to be in the range of 19 to 20 percent.
During the third quarter of 2011, the Company repurchased 1.35 million shares of its common stock at a cost of $114.3 million. At June 30, 2011, $280 million remained available under the $1.0 billion share repurchase authorization.
Conference Call
A conference call to discuss our financial results will take place at 8:30 A.M. Eastern Time on July 28, 2011. The call and related financial charts will be webcast and accessible via the Rockwell Automation website (http://www.rockwellautomation.com/...).
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;
-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 product and pricing pressures;
-disruption of our operations due to natural disasters, acts of war, strikes, terrorism or other causes;
-intellectual property infringement claims by others and the ability to protect our intellectual property;
-our ability to successfully 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;
-disruption of our distribution channels;
-the availability and price of components and materials;
-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 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.
Total segment operating earnings were $263.3 million in the third quarter of fiscal 2011, up from $198.0 million in the same period of 2010. Total segment operating margin increased to 17.4 percent from 15.6 percent a year ago.
Free cash flow was $193.7 million in the third quarter of fiscal 2011. Return on invested capital was 29.3 percent.
Organic sales, total segment operating earnings, total segment operating margin, free cash flow and return on invested capital are non-GAAP measures that are reconciled to GAAP measures in the attachments to this release.
Commenting on the results, Keith D. Nosbusch, chairman and chief executive officer, said, "I am very pleased with the record results for the company in the third quarter. We have capitalized on the ongoing economic recovery by effectively executing our strategy. Architecture & Software had a great quarter with Logix growth of over 25 percent and its highest segment margin since the third quarter of fiscal 2007. Total company operating margin continued to improve, reaching 17.4 percent in the quarter. We closed two acquisitions in the quarter, announced a 21 percent dividend increase, and stepped up our share repurchases. We are on track for an excellent year for the company and for our shareowners."
Outlook
Commenting on the outlook, Nosbusch added, "Given our strong year-to-date results and an increased tailwind from currency, we are increasing our sales outlook for the full fiscal year to approximately $5.9 billion. Based on this sales outlook, we are raising fiscal 2011 earnings per share guidance to $4.55 to $4.65. A result in this range would represent an approximately 50 percent increase over last year and record annual earnings per share."
Following is a discussion of third quarter results for both segments.
Architecture & Software
Architecture & Software fiscal 2011 third quarter sales were $672.9 million, an increase of 21 percent from $553.9 million last year. Currency translation contributed 6 percentage points to the increase. Fiscal 2011 third quarter sales were up 8 percent sequentially compared to $624.2 million in the second quarter of fiscal 2011. Segment operating earnings were $175.9 million in the third quarter of fiscal 2011, compared to $125.4 million in 2010. Segment operating margin was 26.1 percent in the third quarter of fiscal 2011, compared to 22.6 percent a year ago primarily due to volume leverage, partially offset by spending to support growth.
Control Products & Solutions
Control Products & Solutions fiscal 2011 third quarter sales were $843.3 million, an increase of 18 percent from $714.2 million last year. Currency translation contributed 5 percentage points to the increase, while acquisitions contributed 1 percentage point. Segment operating earnings were $87.4 million in the third quarter of fiscal 2011, up from $72.6 million in the third quarter of fiscal 2010. Segment operating margin was 10.4 percent in the third quarter of fiscal 2011, compared to 10.2 percent a year ago primarily due to volume leverage, offset by spending to support growth and somewhat lower margins in our solutions businesses.
Other Information
Fiscal 2011 third quarter general corporate net expense was $22.3 million, compared to $23.1 million in the third quarter of 2010.
The effective tax rate for the third quarter of fiscal 2011 was 19.2 percent; the Company now expects the full-year tax rate to be in the range of 19 to 20 percent.
During the third quarter of 2011, the Company repurchased 1.35 million shares of its common stock at a cost of $114.3 million. At June 30, 2011, $280 million remained available under the $1.0 billion share repurchase authorization.
Conference Call
A conference call to discuss our financial results will take place at 8:30 A.M. Eastern Time on July 28, 2011. The call and related financial charts will be webcast and accessible via the Rockwell Automation website (http://www.rockwellautomation.com/...).
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;
-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 product and pricing pressures;
-disruption of our operations due to natural disasters, acts of war, strikes, terrorism or other causes;
-intellectual property infringement claims by others and the ability to protect our intellectual property;
-our ability to successfully 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;
-disruption of our distribution channels;
-the availability and price of components and materials;
-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 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.
