10-QPeriod: Q1 FY2019

ROCKWELL AUTOMATION, INC Quarterly Report for Q1 Ended Dec 31, 2018

Filed January 31, 2019For Securities:ROK

Summary

Rockwell Automation, Inc. reported results for the first quarter of fiscal year 2019, ending December 31, 2018. The company demonstrated a revenue increase of 3.5% year-over-year, with organic sales growing by 5.7%. This growth was primarily driven by strong performance in heavy industries and consumer sectors, although it was partially offset by a decline in the automotive segment. The Architecture & Software segment saw a 2.4% sales increase, while the Control Products & Solutions segment grew by 4.5%. The company's profitability saw a significant year-over-year improvement in Adjusted EPS, which rose to $2.21 from $1.96 in the prior year's comparable quarter. However, reported net income was $80.3 million, a substantial increase from the net loss of $(236.4) million in the prior year, largely influenced by a significant negative impact from investments in the current quarter, particularly related to PTC Inc. stock. Despite this, operating cash flow remained stable, and free cash flow was reported at $170.0 million.

Financial Highlights

49 data points
Beta

Revenue

$1.64B

45.0% Gross Margin

Net Income

$80.30M

4.9% Net Margin

EPS (Diluted)

$0.66

Total Assets

$5.94B

Cash & Equivalents

$632.30M

Free Cash Flow

$170.00M

Financial Statements
Beta
Revenue$1.64B
Cost of Revenue$903.60M
Gross Profit$738.70M
SG&A Expenses$386.70M
Interest Expense$20.70M
Net Income$80.30M
EPS (Basic)$0.67
EPS (Diluted)$0.66
Shares Outstanding (Basic)120.30M
Shares Outstanding (Diluted)121.50M

Key Highlights

  • 1Total sales increased by 3.5% to $1,642.3 million, with organic sales up 5.7%.
  • 2Architecture & Software segment sales grew 2.4%, and Control Products & Solutions segment sales grew 4.5%.
  • 3Reported net income turned positive at $80.3 million, a significant improvement from a net loss of $236.4 million in the prior year's quarter.
  • 4Adjusted EPS increased to $2.21 from $1.96 in the prior year's quarter, excluding significant non-operating items.
  • 5Operating cash flow remained strong at $212.0 million, while free cash flow was $170.0 million.
  • 6The company repurchased approximately $292.8 million of its common stock during the quarter.

Frequently Asked Questions

Revenue increased by 3.5% to $1,642.3 million. Organic sales, which exclude currency fluctuations, grew by 5.7%. This growth was primarily driven by strong performance in heavy industries and consumer sectors, although it was partially offset by a decrease in the automotive segment.

Reported net income significantly improved, turning positive at $80.3 million compared to a net loss of $236.4 million in the prior year's quarter. However, this was impacted by a $212.7 million loss on investments related to PTC Inc. stock. Adjusted EPS, which excludes such items, increased to $2.21 from $1.96 in the prior year, indicating improved operational profitability.

Operating cash flow remained stable at $212.0 million, and free cash flow was $170.0 million. The company continues to allocate capital towards share repurchases, having spent approximately $292.8 million in this quarter. Future uses of cash include working capital, capital expenditures, acquisitions, dividends, share repurchases, and debt repayments.

The company adopted ASC 606 on October 1, 2018, using the modified retrospective method. This resulted in a net increase of $6.1 million to retained earnings as of the adoption date. The adoption had a modest impact on the current quarter's reported financials, slightly increasing sales and net income compared to what they would have been under the old standard.