Manufacturers

Rockwell Reports 2Q 2022 Results, Updates Fiscal 2022 Guidance

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

“Despite a volatile global supply chain environment that impacted sales in the quarter, we continued to see extremely strong demand in all key end markets and regions around the world,” said Blake Moret, Chairman and CEO.

Fiscal 2022 Q2 Financial Results

Fiscal 2022 second quarter sales were $1,808 million, up 1.8% from $1,776 million in the second quarter of fiscal 2021. Organic sales increased 1.3%, currency translation decreased sales by 1.8%, and acquisitions increased sales by 2.3%.

Fiscal 2022 second quarter net income attributable to Rockwell Automation was $53.9 million or $0.46 per share, compared to $415 million or $3.54 per share in the second quarter of fiscal 2021. The decreases in net income attributable to Rockwell Automation and Diluted EPS are primarily due to fair value adjustments recognized in fiscal 2022 and fiscal 2021 in connection with our investment in PTC (the “PTC adjustments”). Fiscal 2022 second quarter Adjusted EPS was $1.66, down 31.1% compared to $2.41 in the second quarter of fiscal 2021 primarily due to higher input costs and higher investment spend, partially offset by lower incentive compensation and better price realization.

Pre-tax margin was 2.3% in the second quarter of fiscal 2022 compared to 28.6% in the same period last year. The decrease in pre-tax margin was primarily due to the PTC adjustments.

Total segment operating earnings were $283 million in the second quarter of fiscal 2022, down 27.4% from $390 million in the same period of fiscal 2021. Total segment operating margin was 15.7% compared to 22.0% a year ago primarily due to higher input costs and higher investment spend, partially offset by lower incentive compensation and better price realization.

Cash flow generated by operating activities in the second quarter of fiscal 2022 was $90.8 million, compared to $249 million in the second quarter of fiscal 2021. Free cash flow in the second quarter of fiscal 2022 was $45.9 million, compared to $224 million in the same period last year. Decreases in cash flow from operating activities and free cash flow were due to lower pre-tax income and higher 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 our strong demand and record backlog along with our latest view of supply chain constraints. However, the global supply chain remains volatile with new pressures from COVID-19 related shutdowns in China and war in Ukraine that are difficult to quantify.

“We are navigating significant supply chain volatility with actions to increase component supply, mitigate inflation, and improve our resiliency over the coming quarters. Strong continuing demand driven by capital investment, the increasing importance of automation and digital transformation, and our unmatched position set the stage for market-beating growth this year and beyond,” Moret continued.

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

Intelligent Devices

Intelligent Devices second quarter fiscal 2022 sales were $809 million, a decrease of 4.9% compared to $850 million in the same period last year. Organic sales decreased 3.0% and currency translation decreased sales by 1.9%. Segment operating earnings were $118 million compared to $202 million in the same period last year. Segment operating margin decreased to 14.6% from 23.8% a year ago, driven by higher input costs, higher investment spend, and lower sales.

Software & Control

Software & Control second quarter fiscal 2022 sales were $535 million, an increase of 6.5% compared to $502 million in the same period last year. Organic sales increased 0.7%, currency translation decreased sales by 1.8%, and an acquisition increased sales by 7.6%. Segment operating earnings were $132 million compared to $150 million in the same period last year. Segment operating margin decreased to 24.6% from 29.8% a year ago, driven by higher investment spend, higher input costs, and the impact of acquisition integration costs.

Lifecycle Services

Lifecycle Services second quarter fiscal 2022 sales were $465 million, an increase of 9.7% compared to $424 million in the same period last year. Organic sales increased 10.8%, currency translation decreased sales by 1.7%, and acquisitions increased sales by 0.6%. Segment operating earnings were $33.7 million compared to $38.3 million in the same period last year. Segment operating margin decreased to 7.3% from 9.0% a year ago, driven by lower labor utilization caused by supply chain constraints, partially offset by higher sales and lower incentive compensation.

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