Summary
Rockwell Automation's (ROK) 10-Q filing for the quarter ending June 30, 2019, indicates a mixed performance with a slight decrease in total sales year-over-year, though organic sales showed modest growth. The company's Architecture & Software segment experienced a sales decline, while the Control Products & Solutions segment saw a slight increase. Profitability improved significantly, with income before income taxes rising substantially due to favorable fair value adjustments on the company's investment in PTC Inc. The company also continues to manage its capital structure, notably issuing $1 billion in long-term debt and repaying commercial paper, leading to a reduction in short-term debt and an increase in cash on hand.
Financial Highlights
51 data pointsBeta
Financial Statements
Beta
| Revenue | $1.67B |
| Cost of Revenue | $934.80M |
| Gross Profit | $730.30M |
| SG&A Expenses | $361.70M |
| Interest Expense | $26.80M |
| Net Income | $261.40M |
| EPS (Basic) | $2.22 |
| EPS (Diluted) | $2.20 |
| Shares Outstanding (Basic) | 117.60M |
| Shares Outstanding (Diluted) | 118.60M |
Key Highlights
- 1Total sales for the three months ended June 30, 2019, decreased by 2.0% to $1,665.1 million, while organic sales increased by 0.5%.
- 2Income before income taxes for the three months increased significantly by 28% to $321.4 million, primarily driven by fair value adjustments related to the PTC investment.
- 3The Architecture & Software segment saw sales decrease by 4.6% to $747.9 million, with a slight decline in operating margin.
- 4The Control Products & Solutions segment experienced a slight increase in sales by 0.2% to $917.2 million, with a notable improvement in operating margin.
- 5The company issued $1 billion in long-term debt in March 2019 and used the proceeds to repay commercial paper, resulting in $0.6 million in short-term debt outstanding as of June 30, 2019.
- 6Cash provided by operating activities decreased to $707.0 million for the nine months ended June 30, 2019, compared to $937.2 million in the prior year, impacting free cash flow.
- 7The company announced an agreement to form a joint venture, Sensia, with Schlumberger, expected to close in calendar 2019.
Frequently Asked Questions
For the three months ended June 30, 2019, Rockwell Automation reported a 2.0% decrease in total sales to $1,665.1 million compared to the same period in the prior year. However, organic sales, which exclude currency fluctuations, saw a modest increase of 0.5%.
The substantial 28% increase in income before income taxes to $321.4 million for the quarter was primarily driven by favorable fair value adjustments related to the company's investment in PTC Inc., partially offset by other factors like segment operating earnings and interest expenses.
Rockwell Automation significantly reduced its short-term debt by issuing $1 billion in long-term notes and using the proceeds to repay commercial paper. As a result, short-term debt decreased from $551.0 million to $0.6 million. The company also saw an increase in cash and cash equivalents by $170.0 million over the nine-month period, though cash from operations was lower year-over-year.
The Architecture & Software segment experienced a sales decline, indicating potential challenges in that area. Conversely, the Control Products & Solutions segment showed resilience with a slight sales increase and improved operating margins, suggesting stronger performance or a more favorable market dynamic for these offerings.