Rockwell Automation Inc. ROK reported adjusted earnings of $1.87 in fourth-quarter fiscal 2020 (ended Sep 30, 2020), beating the Zacks Consensus Estimate of $1.77. However, the bottom line declined 7% year over year, primarily due to lower sales.
Including one-time items, the company’s earnings was $2.25 per share, reflecting a significant improvement from the 7 cents in the year-ago quarter.
Total revenues were $1,570 million, down 9.3% from the prior-year quarter. The top line also missed the Zacks Consensus Estimate of $1,573 million. While organic sales in the quarter were down 12.1%, currency translation had a negative impact of 0.3 percentage points. However, acquisitions contributed 3.1 percentage points.
Rockwell Automation, Inc. Price, Consensus and EPS Surprise
Rockwell Automation, Inc. price-consensus-eps-surprise-chart | Rockwell Automation, Inc. Quote
Operational Update
Cost of sales decreased 7.6% year over year to $9318 million. Gross profit declined 12% year over year to $639 million. Selling, general and administrative expenses slumped 12% year over year to $354 million.
Consolidated segment operating income totaled $318 million, down 9% from the prior-year quarter. Segment operating margin was 20.2% in the fiscal fourth quarter, flat compared with the prior-year quarter.
Segment Results
Architecture & Software: Net sales amounted to $703 million in the fiscal fourth quarter, reflecting year-over-year decline of 10%. Segment operating earnings totaled $191 million compared with the $205 million reported in the prior-year quarter. Segment operating margin contracted to 27.2% in the quarter compared with the year-ago quarter’s 26.2%.
Control Products & Solutions: Net sales declined 9% year over year to $867 million in the reported quarter. Segment operating earnings decreased 12% year over year to $127 million. Segment operating margin was 14.6%, compared with 15.2% in the year-earlier quarter.
Financials
As of fiscal 2020-end, cash and cash equivalents were around $705 million, down from $1,018.4 million as of fiscal 2019 end. As of Sep 30, 2020, total debt was around $2 billion, down from $2.3 billion as of Sep 30, 2019.
Cash flow from operations for fiscal 2020 was $1.12 billion compared with $1.18 billion generated in the prior fiscal. Return on invested capital was 35.7% as of Sep 30, 2020, compared with 27% as of Sep 30, 2019.
During fiscal 2020, Rockwell Automation repurchased 1.4 million shares for $254.7 million. As of the end of the fiscal, $853.7 million was available under the existing share-repurchase authorization.
Fiscal 2020 Performance
For fiscal 2020, Rockwell Automation’s adjusted earnings was $7.68 that surpassed the Zacks Consensus Estimate of $7.57 but was 11% lower than the prior fiscal. Including one-time items, the company’s earnings came in at $8.77 per share compared with $5.83 in fiscal 2019.
Total revenues were down 5.5% year over year to $6.33 billion, which missed the Zacks Consensus Estimate of $6.34 billion.
Fiscal 2021 Guidance
The company anticipates fiscal 2021 adjusted earnings per share in the band of $8.45-$8.85. Organic sales growth is expected between 3.5% to 6.5%. Reported sales growth is anticipated in the range of 6% to 9%. Inorganic sales growth is projected to be 1-1.5% for the fiscal year.
Share Price Performance
Over the past six months, Rockwell Automation’s shares have appreciated 31.7%, outperforming the industry’s growth of 28.4%.
Zacks Rank & Stocks to Consider
Rockwell currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector are Crown Holdings, Inc. CCK, iRobot Corporation IRBT and SiteOne Landscape Supply, Inc. SITE. While Crown Holdings and iRobot sport a Zacks Rank #1 (Strong Buy), SiteOne Landscape carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Crown Holdings has a projected earnings growth rate of 11.7% for fiscal 2020. Over the past year, the company’s shares have appreciated 50% over the past six months.
iRobot has an estimated earnings growth rate of 18.8% for the ongoing year. The company’s shares have gained 12% in the past six months.
SiteOne Landscape has an expected earnings growth rate of 28.6% for 2020. Over the past six months, the stock has climbed 36%.
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