Manufacturers

Rockwell Automation Posts Q1 Earnings Topper

Rockwell Automation Posts Q1 Earnings Topper

MILWAUKEE — Rockwell Automation, Inc. today reported first quarter fiscal 2022 results.

“Rockwell had an excellent start to fiscal 2022, with first quarter sales up 18.7% and orders up over 40% to a quarterly record of $2.5 billion. All three business segments delivered double-digit sales growth and continued exceptional execution in this challenging supply chain environment,” said Blake Moret, Chairman and CEO.

Fiscal 2022 Q1 Financial Results

Fiscal 2022 first quarter sales were $1,857 million, up 18.7% from $1,565 million in the first quarter of fiscal 2021. Organic sales increased 16.8%, currency translation decreased sales by 0.7%, and acquisitions increased sales by 2.6%.

Fiscal 2022 first quarter net income attributable to Rockwell Automation was $242 million or $2.05 per share, compared to $593 million or $5.06 per share in the first quarter of fiscal 2021. The decreases in net income attributable to Rockwell Automation and Diluted EPS were primarily due to lower fair value gains in fiscal 2022 versus fiscal 2021 in connection with our investment in PTC (the “PTC adjustments”). Fiscal 2022 first quarter Adjusted EPS was $2.14, down 10.1% compared to $2.38 in the first quarter of fiscal 2021. First quarter of fiscal 2021 included a non-recurring legal settlement gain of $0.45. Adjusted EPS was up 11% year over year excluding the prior year non-recurring legal settlement gain.

Pre-tax margin was 15.2% in the first quarter of fiscal 2022 compared to 44.8% in the same period last year. The decrease in pre-tax margin was primarily due to the PTC adjustments.

Total segment operating earnings were $355 million in the first quarter of fiscal 2022, up 14.8% from $309 million in the same period of fiscal 2021. Total segment operating margin was 19.1% compared to 19.8% a year ago. The decrease in margin was primarily driven by higher planned spend and negative price/cost, partially offset by higher sales.

Cash flow generated by operating activities in the first quarter of fiscal 2022 was $(12) million, compared to $347 million in the first quarter of fiscal 2021. Free cash flow in the first quarter of fiscal 2022 was $(49) million, compared to $319 million in the same period last year. Decreases in cash flow from operating activities and free cash flow were due to the payout of the fiscal 2021 bonus in fiscal 2022, higher working capital and timing of income tax payments.

Fiscal Year 2022 Outlook

The table below provides guidance for sales growth and earnings per share for fiscal 2022. Our guidance reflects strong demand as well as record backlog. Supply chain challenges remain dynamic, and our projections assume gradual improvement over the course of the year.

¹Updated to include changes in purchase accounting amortization and the Q1 impact of the change in fair value of our investments, primarily PTC.

“We expect very strong growth this year, with total sales up 17.5% at the midpoint of our guidance range despite significant supply chain constraints. I’m proud of how our teams are not only mitigating these challenges, but also taking our profitable growth to a whole new level,” Moret continued.

Following is a discussion of first quarter results for our business segments.

Intelligent Devices

Intelligent Devices first quarter fiscal 2022 sales were $900 million, an increase of 24.7% compared to $722 million in the same period last year. Organic sales increased 25.6% and currency translation decreased sales by 0.9%. Segment operating earnings were $213 million compared to $140 million in the same period last year. Segment operating margin increased to 23.7% from 19.4% a year ago, primarily due to higher sales, partially offset by negative price/cost.

Software & Control

Software & Control first quarter fiscal 2022 sales were $514 million, an increase of 16.5% compared to $441 million in the same period last year. Organic sales increased 8.4%, currency translation decreased sales by 0.7%, and acquisitions increased sales by 8.8%. Segment operating earnings were $118 million compared to $133 million in the same period last year. Segment operating margin decreased to 22.9% from 30.2% a year ago, driven by higher planned spend, the impact of acquisition integration costs, and negative price/cost, partially offset by higher sales.

Lifecycle Services

Lifecycle Services first quarter fiscal 2022 sales were $443 million, an increase of 10.1% compared to $403 million in the same period last year. Organic sales increased 10.3%, currency translation decreased sales by 0.6%, and an acquisition increased sales by 0.4%. Segment operating earnings were $24.5 million compared to $36.0 million in the same period last year. Segment operating margin decreased to 5.5% from 8.9% a year ago, primarily related to higher planned spend, unfavorable project mix, and higher input costs, partially offset by higher sales.

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