10-QPeriod: Q1 FY2023

ROCKWELL AUTOMATION, INC Quarterly Report for Q1 Ended Dec 31, 2022

Filed January 26, 2023For Securities:ROK

Summary

Rockwell Automation, Inc. reported strong financial results for the quarter ended December 31, 2022. Total sales increased by 6.7% year-over-year to $1.98 billion, with organic sales showing a robust 9.9% increase. This growth was driven by broad-based demand across all geographic regions and segments, particularly in Software & Control and Lifecycle Services, with pricing contributing significantly to revenue. Net income attributable to Rockwell Automation surged by 59% to $384.0 million, translating to a diluted Earnings Per Share (EPS) of $3.31, a substantial increase from $2.05 in the prior year period. The company also demonstrated improved cash flow generation, with operating cash flow significantly improving and free cash flow turning positive.

Financial Highlights

52 data points
Beta

Revenue

$1.98B

41.1% Gross Margin

Net Income

$384.00M

19.4% Net Margin

EPS (Diluted)

$3.31

Total Assets

$11.15B

Cash & Equivalents

$460.00M

Free Cash Flow

$42.10M

Financial Statements
Beta
Revenue$1.98B
Cost of Revenue$1.17B
Gross Profit$813.60M
SG&A Expenses$469.50M
Interest Expense$34.10M
Net Income$384.00M
EPS (Basic)$3.33
EPS (Diluted)$3.31
Shares Outstanding (Basic)114.80M
Shares Outstanding (Diluted)115.50M

Key Highlights

  • 1Total sales increased by 6.7% to $1.98 billion, driven by a 9.9% organic sales growth, indicating strong underlying demand.
  • 2Net income attributable to Rockwell Automation saw a significant jump of 59% to $384.0 million.
  • 3Diluted Earnings Per Share (EPS) rose to $3.31 from $2.05 in the prior year, reflecting improved profitability.
  • 4The Software & Control segment experienced robust sales growth of 11.6% with a notable increase in segment operating margin to 29.2%.
  • 5The company successfully improved its cash flow generation, with operating cash flow at $66.3 million and free cash flow at $42.1 million, a significant turnaround from the prior year.
  • 6Rockwell Automation provided a positive outlook for fiscal year 2023, guiding for reported sales growth of 10.0% - 14.0% and Diluted EPS of $10.99 - $11.79.
  • 7The company completed the acquisition of CUBIC in October 2022, adding to its Intelligent Devices segment and contributing to sales growth.

Frequently Asked Questions

The primary driver of sales growth was a combination of strong underlying demand, reflected in a 9.9% organic sales increase, and the impact of pricing actions. This growth was broad-based across all geographic regions and operating segments, with the Software & Control segment showing particularly strong performance.

Profitability significantly improved. Net income attributable to Rockwell Automation increased by 59% to $384.0 million, and diluted EPS rose to $3.31 from $2.05 in the prior year quarter. This improvement was largely due to higher sales, favorable pricing, and a significant positive impact from the change in fair value of investments.

Rockwell Automation provided an optimistic outlook for fiscal year 2023, projecting reported sales growth between 10.0% and 14.0% and diluted EPS in the range of $10.99 to $11.79. This guidance reflects the strong performance in the current quarter, a record backlog, and an assumption of a gradually improving supply chain environment.

The company is actively managing its global supply chain by extending order visibility, securing longer-term supply agreements, re-engineering products for component resiliency, investing in manufacturing capacity, and qualifying additional suppliers. These actions aim to normalize product lead times and reduce backlogs.