Summary
For the nine months ended June 30, 2016, Rockwell Automation, Inc. (ROK) reported a decrease in sales and net income compared to the same period in the prior year. Sales were down 7.6% to $4.34 billion, and net income fell to $544.5 million from $626.3 million. This decline was attributed to broader macroeconomic factors, including weak demand in heavy industries like oil and gas, and unfavorable currency translations, particularly impacting sales in Asia Pacific and Canada. Despite the overall sales decline, the company's "Architecture & Software" segment showed resilience with a smaller organic sales decrease than the "Control Products & Solutions" segment. The company also highlighted a significant settlement related to the Rocky Flats facility, which is expected to be fully reimbursed by the Department of Energy. Management remains focused on strategic growth initiatives, including acquisitions, to expand their market reach and technology offerings. Investors should note the decrease in free cash flow and the company's ongoing share repurchase program.
Financial Highlights
48 data points| Revenue | $1.47B |
| Cost of Revenue | $857.20M |
| Gross Profit | $616.80M |
| SG&A Expenses | $346.70M |
| Interest Expense | $18.10M |
| Net Income | $191.00M |
| EPS (Basic) | $1.47 |
| EPS (Diluted) | $1.46 |
| Shares Outstanding (Basic) | 129.80M |
| Shares Outstanding (Diluted) | 130.80M |
Key Highlights
- 1Total sales for the nine months ended June 30, 2016, decreased by 7.6% to $4.34 billion compared to the prior year, with a 3.9% decrease in organic sales.
- 2Net income for the nine months ended June 30, 2016, declined to $544.5 million ($4.13 diluted EPS) from $626.3 million ($4.60 diluted EPS) in the same period last year.
- 3The "Architecture & Software" segment saw a 6.1% sales decrease (2.4% organic), while "Control Products & Solutions" experienced a 8.8% sales decrease (5.1% organic).
- 4The company reached an agreement to settle the Rocky Flats facility claims for $375.0 million, of which Rockwell Automation's share is $243.75 million, with full reimbursement expected from the U.S. Department of Energy.
- 5Free cash flow for the nine months ended June 30, 2016, decreased to $598.3 million from $768.7 million in the prior year, primarily due to lower net income and less favorable working capital performance.
- 6The company continued its share repurchase program, spending $370.0 million in the first nine months of 2016, with approximately $1.075 billion remaining under board authorizations.
- 7The effective tax rate for the nine months ended June 30, 2016, was 22.9%, favorably impacted by discrete tax items and the R&D tax credit extension.