Rockwell Automation reports:
Record quarterly results
-Sales of $1.5B - exceeding previous cycle peak
-Earnings per share from continuing operations of $1.22
-Return on invested capital of 29.3%
- Segment operating margin improved 1.8 pts YOY
- Strong free cash flow of $194M -108% of net income
- Closed two acquisitions
- Increased dividend by 21% and stepped up share repurchases
Keith Nosbusch, Chairman and CEO, said, "We are nine quarters into the recovery now, and we are beginning to see the growth rate moderating."
Nosbush also was very bullish on the process industries. "I am very pleased with the progress we are making in process. Our process business had its best quarter of the year with 18% year-over-year sales growth and 9% sequential growth, both on a currency neutral basis. Globally we are seeing more and larger legacy DCS conversion opportunities. And we continue to invest in our process domain expertise for selling, application engineering and technical support," Keith Nosbusch said.
Globally, EMEA saw +36% growth (19% organic and the rest from the Lectronics acquisition). Latin America grew at +33% and Asia-Pacific grew at +23%. The Architecture and Software busines unit grew +21% and the Control Products and Solutions business unit was up 18%.
Ted Crandall, CFO, announced that Rockwell would "likely make a discretionary US pension fund contribution in Q4."
Crandall also said that Rockwell was announcing new, improved guidance. Revenue should grow to $5.9 billion, with 50% of that organic growth, and there should be a $4.65 EPS (earnings per share). "That's a record EPS," Crandall said.
Analysts questioned what appear to be flat growth numbers...that is, the rate of growth is not increasing, even though the company continues to grow. Nosbusch replied that he doesn't feel the need, in the light of their normal quarterly analysis to change the outlook for the rest of FY2011 that he and Crandall just announced.
Based on these results, it is hard to see why ROK stock is off 20% from their FY2011 high.
