10-QPeriod: Q3 FY2022

ROCKWELL AUTOMATION, INC Quarterly Report for Q3 Ended Jun 30, 2022

Filed July 27, 2022For Securities:ROK

Summary

Rockwell Automation, Inc. (ROK) reported its third quarter fiscal year 2022 results, showcasing robust sales growth driven by strong demand and effective pricing strategies across its segments. Total sales increased by 6.5% year-over-year to $1.97 billion, with organic sales up 7.1%. This growth was supported by solid performance in North America and Latin America, though Asia Pacific experienced some headwinds due to COVID-19 related shutdowns. The company's focus on integrating industrial automation with information technology, as part of its 'The Connected Enterprise' strategy, continues to drive its value proposition. Despite facing supply chain constraints and increased input costs, Rockwell Automation demonstrated resilience, with diluted Earnings Per Share (EPS) rising to $2.55 from $2.32 in the prior year's quarter. The company also provided an optimistic outlook for the full fiscal year 2022, projecting sales growth between 10.5% and 12.5% and diluted EPS between $7.74 and $8.14, signaling confidence in its ability to navigate current economic challenges and capitalize on market opportunities.

Financial Highlights

51 data points
Beta

Revenue

$1.97B

40.8% Gross Margin

Net Income

$297.90M

15.1% Net Margin

EPS (Diluted)

$2.55

Total Assets

$10.80B

Cash & Equivalents

$482.90M

Free Cash Flow

$326.60M

Financial Statements
Beta
Revenue$1.97B
Cost of Revenue$1.17B
Gross Profit$802.40M
SG&A Expenses$442.00M
Interest Expense$30.80M
Net Income$297.90M
EPS (Basic)$2.56
EPS (Diluted)$2.55
Shares Outstanding (Basic)116.00M
Shares Outstanding (Diluted)116.50M

Key Highlights

  • 1Total sales for the third quarter increased 6.5% to $1.97 billion, driven by a 7.1% increase in organic sales.
  • 2Diluted EPS increased to $2.55 from $2.32 in the prior year's quarter, reflecting improved profitability.
  • 3The Intelligent Devices segment saw a slight decrease in reported sales (-0.5%) but an increase in organic sales (+2.7%), indicating resilience despite global challenges.
  • 4The Software & Control segment exhibited strong growth with a 19.1% increase in reported sales and a 13.4% rise in organic sales.
  • 5Lifecycle Services segment reported a 6.1% sales increase, with organic sales growing by 8.7%, demonstrating continued demand for its services.
  • 6The company maintained a strong cash position and provided an optimistic full-year 2022 outlook, guiding for reported sales growth of 10.5% - 12.5% and diluted EPS of $7.74 - $8.14.
  • 7Despite supply chain challenges and inflationary pressures, Rockwell Automation highlighted its strategic pricing initiatives and focus on cost productivity.

Frequently Asked Questions

Sales growth was primarily driven by strong underlying demand for industrial automation and digital transformation solutions, coupled with effective pricing increases implemented by the company. Growth was particularly strong in North America and Latin America, with the Software & Control segment showing significant year-over-year increases.

While the company experienced supply chain constraints and increased input costs, it managed these challenges through strategic pricing adjustments and operational efficiencies. These factors partially offset the benefits of higher sales and pricing, but the overall impact on profitability was managed, as reflected in the increase in diluted EPS.

The company provided an optimistic outlook, projecting reported sales growth between 10.5% and 12.5% and diluted EPS between $7.74 and $8.14. This guidance reflects continued strong demand and a record backlog, balanced against ongoing supply chain considerations.

For the nine months ended June 30, 2022, cash provided by operating activities was $423.7 million, resulting in free cash flow of $323.4 million. The company continues to return capital to shareholders through dividends and share repurchases, with approximately $1.3 billion remaining authorization for share repurchases. Future uses of cash are expected to include working capital, capital expenditures, acquisitions, dividends, and debt repayments.