01—Abstract
Summary
Summary of the 10-K filed November 9, 2018. Cited figures are marked; the original filing is the authoritative source.
Rockwell Automation, Inc. (ROK) reported strong sales growth in fiscal year 2018, with total sales increasing by 5.6% to $6.67 billiona, driven by a broad-based demand across its key industries.
The company's strategic focus on "The Connected Enterprise" and investments in technology innovation, including its alliance with PTC, continue to be key drivers of growth. The Architecture & Software segment showed particularly robust performance with a 6.9% sales increase and improved operating margin. The company demonstrated solid financial health, with a significant increase in free cash flow to $1.17 billionb.
ROK also actively returned capital to shareholders through share repurchases totaling $1.5 billionc. Management highlighted positive industrial economic trends in the U.S. and favorable, though moderating, trends in non-U.S. markets. Despite facing various macroeconomic and operational risks, Rockwell Automation appears well-positioned for continued growth, supported by its technological differentiation and global expansion efforts.
02—Key points
Key Highlights
- Total sales increased by 5.6% to $6.67 billion in fiscal year 2018, indicating robust demand across industries.
- Free cash flow improved significantly, reaching $1.17 billion, demonstrating strong operational cash generation.
- The company repurchased approximately $1.5 billion of its common stock, reflecting a commitment to returning capital to shareholders.
- The Architecture & Software segment demonstrated strong growth with sales up 6.9% and an improved operating margin of 29.1%.
- Rockwell Automation's strategic investment in and alliance with PTC Inc. is expected to accelerate growth and enhance its information solutions portfolio.
- The company reported positive year-over-year sales growth in all major geographic regions, highlighting its global reach.
- Despite a significant one-time charge related to the U.S. Tax Cuts and Jobs Act of 2017, adjusted EPS showed a healthy increase of 20.0% to $8.11.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed November 9, 2018Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $6.67B$6.31B | +5.6% |
| Cost of Revenue | $3.78B$3.64B | +3.8% |
| Gross Profit | $2.88B$2.67B | +8.1% |
| R&D Expenses | $371.80M$348.20M | +6.8% |
| SG&A Expenses | $1.59B$1.56B | +1.9% |
| Interest Expense | $73.00M$76.20M | −4.2% |
| Net Income | $535.50M$825.70M | −35.1% |
| EPS (Basic) | $4.27$6.42 | −33.5% |
| EPS (Diluted) | $4.21$6.35 | −33.7% |
| Shares Outstanding (Basic) | 125.40M128.40M | −2.3% |
| Shares Outstanding (Diluted) | 126.90M129.90M | −2.3% |
05—Questions
Frequently Asked Questions
What was Rockwell Automation's overall financial performance in fiscal year 2018?
In fiscal year 2018, Rockwell Automation achieved total sales of $6.67 billion, a 5.6% increase year-over-year. The company also generated strong free cash flow of $1.17 billion and repurchased $1.5 billion of its stock, indicating a healthy financial position and commitment to shareholder returns.
How did the company's two main segments perform?
The Architecture & Software segment experienced robust growth with sales up 6.9% and an improved operating margin to 29.1%. The Control Products & Solutions segment also saw sales increase by 4.6%, with its operating margin improving to 15.2%.
What impact did the Tax Cuts and Jobs Act of 2017 have on the company's financial results?
The company recorded charges of $538.3 million related to the Tax Cuts and Jobs Act of 2017, which significantly impacted its reported net income and effective tax rate. However, on an adjusted basis, which excludes these and other special items, Adjusted EPS increased by 20.0% to $8.11, reflecting underlying operational strength.
What is the significance of the investment in PTC Inc.?
Rockwell Automation made a strategic investment in PTC Inc., a leader in the Industrial Internet of Things (IIoT) and augmented reality. This alliance aims to accelerate growth for both companies and create an integrated information solution to enhance customer productivity and efficiency.
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