MILWAUKEE — Rockwell Automation, Inc. today reported second quarter fiscal 2021 results.
“This is an exciting time at Rockwell. We had our first-ever $2 billion orders quarter, powered by growth in core automation platforms, Information Solutions & Connected Services (IS/CS), and recent acquisitions. The value of our portfolio of products and services has never been more evident, and we are well positioned to accelerate profitable growth as we help the world recover,” said Blake Moret, Chairman and CEO.
Fiscal 2021 Q2 Financial Results
Fiscal 2021 second quarter sales were $1,776.1 million, up 5.6 percent from $1,681.3 million in the second quarter of fiscal 2020. Organic sales increased 1.3 percent, currency translation increased sales by 2.4 percent, and acquisitions increased sales by 1.9 percent.
Fiscal 2021 second quarter net income attributable to Rockwell Automation was $415.0 million or $3.54 per share, compared to $132.2 million or $1.13 per share in the second quarter of fiscal 2020. The increases in net income attributable to Rockwell Automation and EPS were primarily due to fair-value adjustments recognized in fiscal 2021 and fiscal 2020 in connection with our investment in PTC (the “PTC adjustments”). Fiscal 2021 second quarter Adjusted EPS was $2.41, down 2.4 percent compared to $2.47 in the second quarter of fiscal 2020. Higher volume and favorable mix were offset by the reinstatement of incentive compensation and a higher Adjusted Effective Tax Rate.
Pre-tax margin was 28.6 percent in the second quarter of fiscal 2021 compared to 10.0 percent in the same period last year. The increase in pre-tax margin was primarily due to the PTC adjustments.
Total segment operating earnings were $390.1 million in the second quarter of fiscal 2021, up 5.0 percent from $371.5 million in the same period of fiscal 2020. Total segment operating margin was 22.0 percent compared to 22.1 percent a year ago.
Cash flow provided by operating activities in the second quarter of fiscal 2021 was $248.9 million, compared to $217.4 million in the second quarter of fiscal 2020. Free cash flow in the second quarter of fiscal 2021 was $223.9 million, compared to $197.8 million in the same period last year.
Outlook
The COVID-19 pandemic and global efforts to respond to it continue to evolve. We are updating our guidance considering our performance through the first half of the year, our expectation of continued order strength, and anticipation of continued supply chain constraints.
The following table provides guidance for projected sales growth and earnings per share for fiscal 2021:
“I’m extremely proud of the many ways our employees are helping customers meet current challenges and also accelerate their digital transformation. Our strong orders performance and increased guidance validate our confidence in delivering value today while investing for the future,” Moret concluded.
Intelligent Devices
Intelligent Devices second quarter fiscal 2021 sales were $850.2 million, an increase of 8.3 percent compared to $785.0 million in the same period last year. Organic sales increased 5.8 percent and currency translation increased sales by 2.5 percent. Segment operating earnings were $202.0 million compared to $180.7 million in the same period last year. Segment operating margin increased to 23.8 percent from 23.0 percent a year ago, primarily due to higher sales and lower spend, partially offset by the reinstatement of incentive compensation.
Software & Control
Software & Control second quarter fiscal 2021 sales were $502.3 million, an increase of 12.1 percent compared to $448.2 million in the same period last year. Organic sales increased 5.6 percent, currency translation increased sales by 2.6 percent, and acquisitions increased sales by 3.9 percent. Segment operating earnings were $149.8 million compared to $136.8 million in the same period last year. Segment operating margin decreased to 29.8 percent from 30.5 percent a year ago, primarily due to the reinstatement of incentive compensation, partially offset by higher sales.
Lifecycle Services
Lifecycle Services second quarter fiscal 2021 sales were $423.6 million, a decrease of 5.5 percent compared to $448.1 million in the same period last year. Organic sales decreased 11.0 percent, currency translation increased sales by 2.2 percent, and acquisitions increased sales by 3.3 percent. Segment operating earnings were $38.3 million compared to $54.0 million in the same period last year. Segment operating margin decreased to 9.0 percent from 12.1 percent a year ago, primarily due to lower sales and the reinstatement of incentive compensation, partially offset by favorable mix and cost savings from actions taken in the prior year.
Supplemental Information
Corporate and Other – Fiscal 2021 second quarter corporate and other expense was $30.4 million compared to $17.7 million in the second quarter of fiscal 2020. The increase was primarily due to mark-to-market adjustments related to our deferred and non-qualified compensation plans.
Purchase Accounting Depreciation and Amortization – Fiscal 2021 second quarter purchase accounting depreciation and amortization expense was $13.1 million, up $3.6 million from the second quarter of fiscal 2020.
Tax – On a GAAP basis, the effective tax rate in the second quarter of fiscal 2021 was 19.2 percent compared to 22.4 percent in the second quarter of fiscal 2020. The lower effective tax rate in the second quarter of fiscal 2021 was primarily due to the tax effects of the fair-value adjustments recognized in fiscal 2021 and fiscal 2020 in connection with our investment in PTC, partially offset by other discrete items. The Adjusted Effective Tax Rate for the second quarter of fiscal 2021 was 16.7 percent compared to 12.6 percent in the prior year. The higher Adjusted Effective Tax Rate in the second quarter of fiscal 2021 was primarily due to higher discrete benefits in the prior year.
Share Repurchases – During the second quarter of fiscal 2021, the Company repurchased approximately 0.4 million shares of its common stock at a cost of $92.0 million. At March 31, 2021, $674.0 million remained available under our existing share repurchase authorization.
ROIC – Return on invested capital was 44.6 percent for the twelve months ended March 31, 2021.
Non-GAAP Measures – Organic sales, total segment operating earnings, total segment operating margin, Adjusted Income, Adjusted EPS, Adjusted Effective Tax Rate, free cash flow, and return on invested capital are non-GAAP measures that are reconciled to GAAP measures in the attachments to this release.
Highlights
- Reported sales up 5.6 percent year over year; organic sales up 1.3 percent
- Record orders over $2 billion, up double digits sequentially and year over year
- Inorganic investments contributed 1.9 percent to reported sales growth
- Diluted EPS of $3.54; Adjusted EPS of $2.41
- Updating fiscal 2021 sales growth guidance to 10.5% and organic sales growth guidance to 7% at the midpoint
- Updating fiscal 2021 Diluted EPS guidance to $12.53 – $12.93 and Adjusted EPS guidance to $8.95 – $9.35