Summary
Rockwell Automation's third-quarter 2018 report shows solid sales growth driven by broad-based demand across regions and industries, with Architecture & Software and Control Products & Solutions segments both experiencing increases. The company is navigating the impact of the Tax Cuts and Jobs Act of 2017, with provisional amounts recorded for the transition tax and revaluation of deferred tax assets. A significant event during the quarter was the agreement to purchase securities of PTC Inc., leading to a substantial unrealized loss recorded due to fair value adjustments of this forward contract. Financially, the company demonstrated strong operating cash flow and free cash flow. Despite a decrease in net income year-over-year, primarily due to the PTC investment impact and the Tax Act provisional expenses, the company's operational performance remains robust. Rockwell Automation continues to execute its long-term strategy focused on The Connected Enterprise and remains committed to returning capital to shareholders through its enhanced share repurchase program.
Financial Highlights
50 data points| Revenue | $1.70B |
| Cost of Revenue | $954.00M |
| Gross Profit | $744.70M |
| SG&A Expenses | $399.60M |
| Interest Expense | $16.50M |
| Net Income | $198.60M |
| EPS (Basic) | $1.60 |
| EPS (Diluted) | $1.58 |
| Shares Outstanding (Basic) | 124.40M |
| Shares Outstanding (Diluted) | 125.80M |
Key Highlights
- 1Total sales increased by 6.2% to $1,698.7 million for the three months ended June 30, 2018, compared to the prior year, with organic sales up 5.7%.
- 2Both segments, Architecture & Software (up 8.7%) and Control Products & Solutions (up 4.1%), contributed to sales growth.
- 3Net income decreased to $198.6 million from $216.9 million in the prior year's quarter, impacted by a significant unrealized loss of $76.8 million related to a forward contract for PTC Inc. securities and provisional tax expenses from the Tax Cuts and Jobs Act.
- 4Adjusted EPS (excluding non-operating pension costs and other items) increased to $2.16 from $1.76 in the prior year's quarter, indicating strong underlying operational performance.
- 5Operating cash flow for the nine months ended June 30, 2018, was $937.2 million, a slight increase from $927.1 million in the prior year, with free cash flow also showing a modest increase to $858.6 million.
- 6The company significantly increased its share repurchase target for fiscal year 2018 to $1.5 billion, reflecting confidence in its financial position and commitment to shareholder returns.