(REUTERS) – Factory automation systems maker Rockwell Automation Inc., which last month rejected bigger rival Emerson Electric Company's $27.6 billion takeover bid, posted a lower-than-expected quarterly profit, partly hurt by higher investment spending.
Rockwell has increasingly been focused on what it calls the “connected enterprise,” which includes developing software that links manufacturing operations to data and enables industrial businesses to improve operational productivity.
“In the quarter, we divested a small business and also initiated restructuring plans. These actions accelerate our ongoing efforts to sharpen our focus on the connected enterprise strategy,” Chief Executive Blake Moret said in a statement.
“In the quarter, we divested a small business and also initiated restructuring plans. These actions accelerate our ongoing efforts to sharpen our focus on The Connected Enterprise strategy and further enhance the competitiveness of our products, services, and solutions. We will continue to balance investments with our commitment to delivering profitable growth,” President and Chief Executive Officer Blake Moret said in a statement. “Fiscal 2017 was a very good year for us. Organic sales grew 6 percent, EPS grew 14 percent, and we had solid free cash flow performance. We had a strong finish to the year in orders, which were up high single digits in the fourth quarter. Our employees, partners, and suppliers continue to differentiate us. I would like to thank them for their efforts every day.”
Rockwell's operating margins fell to 17 percent in the fourth quarter from 19.8 percent a year earlier, hurt by its control products business.
The control products division, which accounts for more than half of total sales, makes motor starters and condition sensors for the transportation, oil and gas, mining, and food and beverage industries.
Rockwell on Wednesday also forecast its fiscal 2018 adjusted profit to be $7.35 per share at the mid-point, below Wall Street estimates of $7.38 per share, according to Thomson Reuters I/B/E/S.
The company's shares were marginally down in light premarket trade.
Rockwell's net income rose 10.5 percent to $204.6 million, or $1.57 per share, in the quarter ended Sept. 30.
On an adjusted basis, the Milwaukee, Wisconsin-based company earned $1.69 per share. Analysts on average had expected a profit of $1.73 per share.
Revenue rose 8 percent to $1.67 billion.
According to a statement from Reuters, Emerson indicated on Tuesday that it remained interested in restarting deal talks with Rockwell.
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