10-QPeriod: Q2 FY2017

ROCKWELL AUTOMATION, INC Quarterly Report for Q2 Ended Mar 31, 2017

Filed May 5, 2017For Securities:ROK

Summary

Rockwell Automation, Inc. reported solid financial results for the first half of fiscal year 2017, demonstrating a healthy recovery and growth trajectory. Sales increased by 6.2% to $3.04 billion for the six months ended March 31, 2017, driven by a broad-based growth across most regions and industries, particularly in the transportation sector. The company's 'Architecture & Software' segment showed robust performance with a 11.2% sales increase, reflecting strong demand for its advanced automation and information solutions. The company also highlighted improved profitability, with net income rising to $404.2 million for the first six months of fiscal 2017, up from $353.5 million in the prior year. Diluted Earnings Per Share (EPS) saw a significant increase to $3.11 from $2.68. This performance was bolstered by effective cost management and a lower effective tax rate, which decreased from 22.1% to 17.2% due to favorable discrete tax items and tax benefits related to share-based compensation. Free cash flow also saw a substantial improvement, reaching $544.4 million for the period, indicating strong operational cash generation.

Financial Highlights

49 data points
Beta

Revenue

$1.55B

42.2% Gross Margin

Net Income

$189.50M

12.2% Net Margin

EPS (Diluted)

$1.45

Total Assets

$7.07B

Cash & Equivalents

$1.44B

Free Cash Flow

$273.00M

Financial Statements
Beta
Revenue$1.55B
Cost of Revenue$897.80M
Gross Profit$656.50M
SG&A Expenses$409.20M
Interest Expense$18.90M
Net Income$189.50M
EPS (Basic)$1.47
EPS (Diluted)$1.45
Shares Outstanding (Basic)128.70M
Shares Outstanding (Diluted)130.30M

Key Highlights

  • 1Total sales for the six months ended March 31, 2017, increased by 6.2% to $3.04 billion compared to the same period in the prior year.
  • 2Net income for the six months ended March 31, 2017, rose to $404.2 million, an increase of 14.3% year-over-year.
  • 3Diluted EPS grew to $3.11 for the first six months of FY2017, up from $2.68 in the prior year.
  • 4The 'Architecture & Software' segment reported a strong 11.2% sales increase for the six months ended March 31, 2017.
  • 5Free cash flow for the first six months of FY2017 significantly improved to $544.4 million, up from $347.9 million in the prior year.
  • 6The company's effective tax rate decreased from 22.1% to 17.2% for the six months ended March 31, 2017, driven by favorable discrete tax items.
  • 7Share repurchases continued, with $186.0 million spent on repurchasing approximately 1.3 million shares during the first six months of FY2017.

Frequently Asked Questions

For the six months ended March 31, 2017, Rockwell Automation reported a 6.2% increase in total sales, reaching $3.04 billion, compared to $2.87 billion for the same period in fiscal year 2016. This growth was driven by a combination of organic sales increases, currency translation effects, and acquisitions.

Profitability showed a marked improvement. Net income for the first six months of fiscal year 2017 increased to $404.2 million, up from $353.5 million in the prior year. Diluted Earnings Per Share (EPS) also saw a significant rise, from $2.68 to $3.11.

The 'Architecture & Software' segment was a strong performer, with sales increasing by 11.2% to $1.42 billion for the first six months of FY2017. The 'Control Products & Solutions' segment also saw sales growth of 2.2% to $1.63 billion, although its operating margin decreased due to higher incentive compensation.

The company demonstrated robust cash flow generation. Cash provided by operating activities increased to $611.8 million for the six months ended March 31, 2017, compared to $399.3 million in the prior year. Free cash flow also saw a substantial increase to $544.4 million. This improvement was primarily attributed to higher pre-tax income, lower incentive compensation payments, and reduced income tax payments.