Packaging

Rockwell Automation Reports Second Quarter 2011 Results

Wednesday 27. April 2011 - Revenue up 26 percent year over year

Diluted EPS from continuing operations up 48 percent to $1.14
Return on invested capital 27.5 percent
Revised fiscal 2011 EPS guidance to $4.40 – $4.60
Rockwell Automation, Inc. (NYSE: ROK) today reported fiscal 2011 second quarter revenue of $1,464.1 million, up 26 percent from $1,164.5 million in the second quarter of fiscal 2010. Currency translation contributed 2 percentage points to the increase. Fiscal 2011 second quarter net income and income from continuing operations were $166.4 million or $1.14 per share, compared to income from continuing operations of $111.9 million or $0.77 per share in the second quarter of fiscal 2010. Last year, second quarter net income was $137.0 million or $0.95 per share, including $25.1 million or $0.18 per share from discontinued operations.
Total segment operating earnings were $244.2 million in the second quarter of fiscal 2011, up from $177.3 million in the same period of 2010. Total segment operating margin in the second quarter of fiscal 2011 increased to 16.7 percent from 15.2 percent a year ago.
Free cash flow was $226.2 million in the second quarter of fiscal 2011. Return on invested capital was 27.5 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, “The strong results we saw in the first quarter continued in the second quarter. Sales growth was broad-based, operating margin continued to expand, and we generated strong free cash flow. Both earnings per share from continuing operations and return on invested capital were record highs for the company. I am pleased with our ability to capitalize on solid underlying market conditions as we execute our growth and performance strategy.”
Outlook
Commenting on the outlook, Nosbusch added, “Our strong revenue performance in the first half, continued strength in the industrial sector and an increased tailwind from currency are positives as we enter the third quarter. However, events such as the earthquake in Japan and unrest in the Middle East and North Africa have added uncertainty to the global macroeconomic environment. Taking all of these factors into account, we are increasing our revenue outlook for the full fiscal year to $5.7 to $5.8 billion. Based on this revenue outlook, and additional headwinds from material cost inflation and higher oil prices, we are narrowing fiscal 2011 earnings per share guidance to $4.40 to $4.60. A result in this range would represent almost a 50 percent increase in earnings per share from fiscal 2010 and record earnings per share for the company.”
Following is a discussion of second quarter results for both segments.
Architecture & Software
Architecture & Software fiscal 2011 second quarter sales were $624.2 million, an increase of 21 percent from $516.2 million in the second quarter of fiscal 2010. Segment operating earnings were $152.2 million in the second quarter of fiscal 2011, compared to $122.6 million in the second quarter of fiscal 2010. Architecture & Software segment operating margin was 24.4 percent in the second quarter of fiscal 2011, compared to 23.8 percent a year ago.
Control Products & Solutions
Control Products & Solutions fiscal 2011 second quarter sales were $839.9 million, an increase of 30 percent from $648.3 million in the second quarter of fiscal 2010. Fiscal 2011 second quarter sales were up 12 percent sequentially compared to $751.9 million in the first quarter of fiscal 2011. Segment operating earnings were $92.0 million in the second quarter of fiscal 2011, up from $54.7 million in the second quarter of fiscal 2010. Control Products & Solutions segment operating margin was 11.0 percent in the second quarter of fiscal 2011, compared to 8.4 percent a year ago.
Other Information
Fiscal 2011 second quarter general corporate net expense was $20.5 million, down from $23.6 million in the second quarter of 2010.
The effective tax rate for the second quarter of fiscal 2011 was 18.3 percent; the company continues to expect the full-year tax rate to be in the range of 20 to 21 percent.
During the second quarter of 2011, the Company repurchased 0.7 million shares of its common stock at a cost of $58.4 million. The Company had $393.9 million available at March 31, 2011 under its $1.0 billion share repurchase authorization.