Rockwell Automation Reports 3Q 2022 Results

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

“Rockwell delivered a strong quarter, both on top line and bottom line, with Adjusted EPS growing over 15% year over year. Our continued order strength reflects the value our customers place on Rockwell’s differentiated offerings and the increased need for automation solutions. This, coupled with gradually improving supply chain, strong operating performance, and price/cost execution resulted in exceptional earnings in the quarter,” said Blake Moret, Chairman and CEO.

Fiscal Q3 2022 Financial Results

Fiscal 2022 third quarter sales were $1,969 million, up 6.5% from $1,848 million in the third quarter of fiscal 2021. Organic sales increased 7.1%, currency translation decreased sales by 3.1%, and acquisitions increased sales by 2.5%.

Fiscal 2022 third quarter net income attributable to Rockwell Automation was $298 million or $2.55 per share, compared to $271 million or $2.32 per share in the third quarter of fiscal 2021. The increases in net income attributable to Rockwell Automation and Diluted EPS are primarily due to higher sales, including price increases, lower pension and post-retirement costs, partially offset by fair value adjustments recognized in fiscal 2022 as compared to fiscal 2021 in connection with our investment in PTC (the “PTC adjustments”). Fiscal 2022 third quarter Adjusted EPS was $2.66, up 15% compared to $2.31 in the third quarter of fiscal 2021 primarily due to higher sales and higher margin. Price/cost was positive in the quarter.

Pre-tax margin was 17.5% in the third quarter of fiscal 2022 compared to 17.0% in the same period last year.

Total segment operating earnings were $409 million in the third quarter of fiscal 2022, up 11.0% from $369 million in the same period of fiscal 2021. Total segment operating margin was 20.8% compared to 19.9% a year ago primarily due to higher sales and lower incentive compensation, partially offset by higher investment spend.

Cash flow generated by operating activities in the third quarter of fiscal 2022 was $345 million, compared to $462 million in the third quarter of fiscal 2021. Free cash flow in the third quarter of fiscal 2022 was $327 million, compared to $437 million in the same period last year. Decreases in cash flow from operating activities and free cash flow were due to increases in working capital.

Fiscal Year 2022 Outlook

The table below provides guidance for sales growth and earnings per share for fiscal 2022. Our guidance reflects our strong demand and record backlog along with our latest view of supply chain constraints.

“We continue to expect strong double-digit year-over-year and sequential sales growth in Q4. However, we are reducing the midpoint of our fiscal year organic growth range to reflect ongoing supply chain volatility in this environment. In volatile times like these, we are executing very well, and I’m proud of how our teams are working together with our partners, suppliers, and customers,” Moret continued.

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

Intelligent Devices

Intelligent Devices third quarter fiscal 2022 sales were $878 million, a decrease of 0.5% compared to $883 million in the same period last year. Organic sales increased 2.7% and currency translation decreased sales by 3.2%. Segment operating earnings were $173 million compared to $194 million in the same period last year. Segment operating margin decreased to 19.7% from 21.9% a year ago primarily driven by higher investment spend.

Software & Control

Software & Control third quarter fiscal 2022 sales were $607 million, an increase of 19.1% compared to $510 million in the same period last year. Organic sales increased 13.4%, currency translation decreased sales by 2.8%, and our Plex acquisition increased sales by 8.5%. Segment operating earnings were $191 million compared to $128 million in the same period last year. Segment operating margin increased to 31.4% from 25.2% a year ago, driven by higher sales.

Lifecycle Services

Lifecycle Services third quarter fiscal 2022 sales were $484 million, an increase of 6.1% compared to $456 million in the same period last year. Organic sales increased 8.7%, currency translation decreased sales by 3.2%, and acquisitions increased sales by 0.6%. Segment operating earnings were $45.4 million compared to $46.8 million in the same period last year. Segment operating margin decreased to 9.4% from 10.3% a year ago driven by supply chain constraints and higher investment spend, partially offset by higher sales and lower incentive compensation. Segment operating margin was up 210 bps sequentially from prior quarter margin primarily due to higher sales.