- Sales of $1.65 billion, up 22 percent year over year
- Diluted EPS up 53 percent to $1.39
- Company provides fiscal 2012 diluted EPS guidance of $5.05 – $5.45
Rockwell Automation, Inc. (NYSE: ROK) has reported fiscal 2011 fourth quarter sales of $1,654.3 million, up 22 percent from $1,356.9 million in the fourth quarter of fiscal 2010. Currency translation contributed 4 percentage points to the increase, while acquisitions contributed 1 percentage point. Fiscal 2011 fourth quarter sales were up 9 percent sequentially compared to the third quarter of fiscal 2011. Net income was $201.8 million ($1.39 per share) compared to $131.3 million ($0.91 per share) a year ago, an increase of 53 percent on a per-share basis.
Total segment operating earnings were $298.1 million in the fourth quarter of fiscal 2011, up from $205.1 million in the same period of 2010. Total segment operating margin increased to 18.0 percent from 15.1 percent a year ago primarily due to volume leverage, partially offset by mix and spending to support growth.
Free cash flow was $137.4 million in the fourth quarter of fiscal 2011 after a discretionary pre-tax contribution of $150 million to the company”s U.S. pension trust.
Full Fiscal Year 2011
Full year results set record highs for sales, earnings per share from continuing operations and return on invested capital. Sales were $6,000.4 million, up 24 percent compared to $4,857.0 million in fiscal 2010. Currency translation and acquisitions contributed 4 percentage points to the increase. Income from continuing operations was $697.1 million or $4.79 per share, compared to $440.4 million or $3.05 per share in fiscal 2010, an increase of 57 percent on a per-share basis. Segment operating earnings were $1,027.6 million, compared to $717.2 million in 2010. Full fiscal year 2011 free cash flow was $561.7 million, after the previously-mentioned pension contribution in the fourth quarter. Return on invested capital was 31.6 percent.
Organic sales, total segment operating earnings, total segment operating margin, free cash flow and return on invested capital are non-GAAP measures that are reconciled to GAAP measures in the attachments to this release.
Commenting on the results, Keith D. Nosbusch, chairman and chief executive officer, said, “The fourth quarter capped a year of outstanding sales and earnings performance. Sales growth was strong in all regions. Control Products & Solutions had a great quarter with 18 percent organic growth. Total segment operating margin expanded to 18 percent and it was another record quarter for sales and earnings per share.
“For the full year, sales grew 24 percent and earnings per share grew 57 percent. Key growth accelerators hit on all cylinders. Logix sales increased 29 percent, reflecting the success of our plant-wide optimization strategy and continued growth both in process applications and with OEM customers. Emerging markets grew over 30 percent and now represent 22 percent of total sales. We invested in our best growth opportunities while improving operating margin by over 2 points. Continued strong cash flow and a healthy balance sheet enabled us to fund organic growth, make two acquisitions, significantly increase our dividend for a second straight year, repurchase 4 million shares and contribute $450 million to our U.S. pension trust in September and October.
“These outstanding results give me confidence in both our strategy and our execution. I want to thank our employees for their dedication and our customers and partners for their support throughout the year.”
Outlook
Commenting on the outlook, Nosbusch added, “Despite an uncertain global economic picture and moderating growth rates, we are cautiously optimistic that market growth will continue in 2012. We enter the year with a sound strategy, a track record of success in our growth initiatives and a robust new product pipeline. For fiscal 2012 we are providing a sales outlook of $6.2 to $6.5 billion, which represents sales growth of 5 to 9 percent excluding currency. Based on this sales outlook, we are initiating fiscal 2012 earnings per share guidance of $5.05 to $5.45.”
Nosbusch continued, “In the coming year we will remain flexible and adjust to the underlying economic environment as appropriate. Our strategic priorities are unchanged and we will continue to invest to pursue our best growth opportunities.”
Following is a discussion of fourth quarter results for both segments.
Architecture & Software
Architecture & Software fiscal 2011 fourth quarter sales were $683.3 million, an increase of 19 percent from $575.9 million last year. Currency translation contributed 5 percentage points to the increase. Fiscal 2011 fourth quarter sales were up 2 percent sequentially from the third quarter of fiscal 2011. Segment operating earnings were $177.9 million in the fourth quarter of fiscal 2011, compared to $128.4 million in 2010. Segment operating margin was 26.0 percent in the fourth quarter of fiscal 2011, compared to 22.3 percent a year ago.
Control Products & Solutions
Control Products & Solutions fiscal 2011 fourth quarter sales were $971.0 million, an increase of 24 percent from $781.0 million last year. Currency translation and acquisitions contributed 6 percentage points to the increase. Fiscal 2011 fourth quarter sales were up 15 percent sequentially from the third quarter of fiscal 2011. Segment operating earnings increased to $120.2 million in the fourth quarter of fiscal 2011, compared to $76.7 million in 2010. Segment operating margin was 12.4 percent in the fourth quarter of fiscal 2011, compared to 9.8 percent a year ago.
Other Information
Fiscal 2011 fourth quarter general corporate net expense was $22.2 million, compared to $27.4 million in 2010. For the full year general corporate net was $80.7 million compared to $93.6 million in 2010.
The effective tax rates for the fourth quarter and full year of fiscal 2011 were 21.2 percent and 19.7 percent, respectively. The Company expects the effective tax rate for fiscal 2012 to be approximately 24 percent.
During the fourth quarter of 2011, the Company repurchased 1.3 million shares of its common stock at a cost of $77.7 million. At September 30, 2011, $202 million remained available under the $1.0 billion share repurchase authorization.
This news release contains statements (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995.Words such as “believe,” “estimate,” “project,” “plan,” “expect,” “anticipate,” “will,” “intend” and other similar expressions may identify forward-looking statements. Actual results may differ materially from those projected as a result of certain risks and uncertainties, many of which are beyond our control, including but not limited to:
- macroeconomic factors, including global and regional business conditions, the availability and cost of capital, the cyclical nature of our customers” capital spending, sovereign debt concerns and currency exchange rates;
- laws, regulations and governmental policies affecting our activities in the countries where we do business;
- the successful development of advanced technologies and demand for and market acceptance of new and existing products;
- the availability, effectiveness and security of our information technology systems;
- competitive product and pricing pressures;
- a disruption of our operations due to natural disasters, acts of war, strikes, terrorism, social unrest or other causes;
- intellectual property infringement claims by others and the ability to protect our intellectual property;
- our ability to successfully address claims by taxing authorities in the various jurisdictions where we do business;
- our ability to attract and retain qualified personnel;
- our ability to manage costs related to employee retirement and health care benefits;
- the uncertainties of litigation;
- a disruption of our distribution channels;
- the availability and price of components and materials;
- the successful execution of our cost productivity and globalization initiatives; and
- other risks and uncertainties, including but not limited to those detailed from time to time in our Securities and Exchange Commission filings.
These forward-looking statements reflect our beliefs as of the date of filing this release.We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise
Rockwell Automation, Inc. (NYSE: ROK), the world”s largest company dedicated to industrial automation and information, makes its customers more productive and the world more sustainable. Headquartered in Milwaukee, Wis., Rockwell Automation employs over 21,000 people serving customers in more than 80 countries.
