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Rockwell Reports Outstanding Sales Growth; Strong Quarter for Controls Division

Nov. 8, 2011
Company reports sales of $1.65 billion, up 22% percent year over year.

MILWAUKEE -- Rockwell Automation, Inc. today reported fiscal 2011 fourth quarter sales of $1,654.3 million, up 22% from $1,356.9 million in the fourth quarter of fiscal 2010. Currency translation contributed 4 percentage points to the increase, while acquisitions contributed 1 percentage point. Fiscal 2011 fourth quarter sales were up 9% sequentially compared to the third quarter of fiscal 2011. Net income was $201.8 million ($1.39 per share) compared to $131.3 million ($0.91 per share) a year ago, an increase of 53% on a per-share basis.

Total segment operating earnings were $298.1 million in the fourth quarter of fiscal 2011, up from $205.1 million in the same period of 2010. Total segment operating margin increased to 18% from 15.1% a year ago primarily due to volume leverage, partially offset by mix and spending to support growth.

Free cash flow was $137.4 million in the fourth quarter of fiscal 2011 after a discretionary pre-tax contribution of $150 million to the company's U.S. pension trust.

In the Architecture & Software division, fiscal 2011 fourth quarter sales were $683.3 million, an increase of 19% from $575.9 million last year. Currency translation contributed 5 percentage points to the increase. Fiscal 2011 fourth quarter sales were up 2% sequentially from the third quarter of fiscal 2011. Segment operating earnings were $177.9 million in the fourth quarter of fiscal 2011, compared to $128.4 million in 2010. Segment operating margin was 26% in the fourth quarter of fiscal 2011, compared to 22.3% a year ago.

In the Control Products & Solutions division, fiscal 2011 fourth quarter sales were $971.0 million, an increase of 24% from $781.0 million last year. Currency translation and acquisitions contributed 6 percentage points to the increase. Fiscal 2011 fourth quarter sales were up 15% sequentially from the third quarter of fiscal 2011. Segment operating earnings increased to $120.2 million in the fourth quarter of fiscal 2011, compared to $76.7 million in 2010. Segment operating margin was 12.4 percent in the fourth quarter of fiscal 2011, compared to 9.8% a year ago.

Full Fiscal Year 2011
Full year results set record highs for sales, earnings per share from continuing operations and return on invested capital. Sales were $6,000.4 million, up 24% compared to $4,857.0 million in fiscal 2010. Currency translation and acquisitions contributed 4 percentage points to the increase. Income from continuing operations was $697.1 million or $4.79 per share, compared to $440.4 million or $3.05 per share in fiscal 2010, an increase of 57% on a per-share basis. Segment operating earnings were $1,027.6 million, compared to $717.2 million in 2010. Full fiscal year 2011 free cash flow was $561.7 million, after the previously-mentioned pension contribution in the fourth quarter. Return on invested capital was 31.6%.

Commenting on the results, Keith D. Nosbusch, chairman and chief executive officer, said, "The fourth quarter capped a year of outstanding sales and earnings performance. Sales growth was strong in all regions. Control Products & Solutions had a great quarter with 18% organic growth. Total segment operating margin expanded to 18%, and it was another record quarter for sales and earnings per share.

"For the full year, sales grew 24% and earnings per share grew 57%. Key growth accelerators hit on all cylinders. Logix sales increased 29%, reflecting the success of our plant-wide optimization strategy and continued growth both in process applications and with OEM customers. Emerging markets grew over 30% and now represent 22% of total sales. We invested in our best growth opportunities while improving operating margin by over 2 points. Continued strong cash flow and a healthy balance sheet enabled us to fund organic growth, make two acquisitions, significantly increase our dividend for a second straight year, repurchase 4 million shares and contribute $450 million to our U.S. pension trust in September and October. These outstanding results give me confidence in both our strategy and our execution."

Outlook
Commenting on the outlook, Nosbusch added, "Despite an uncertain global economic picture and moderating growth rates, we are cautiously optimistic that market growth will continue in 2012. We enter the year with a sound strategy, a track record of success in our growth initiatives and a robust new product pipeline. For fiscal 2012 we are providing a sales outlook of $6.2 to $6.5 billion, which represents sales growth of 5% to 9% excluding currency. Based on this sales outlook, we are initiating fiscal 2012 earnings per share guidance of $5.05 to $5.45."

Nosbusch continued, "In the coming year we will remain flexible and adjust to the underlying economic environment as appropriate. Our strategic priorities are unchanged and we will continue to invest to pursue our best growth opportunities."