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What's in Store for Rockwell Automation's (ROK) Q1 Earnings?

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Rockwell Automation Inc. (ROK - Free Report) is scheduled to report first-quarter fiscal 2022 results, before the opening bell on Jan 27.

Q4 Performance

In the last reported quarter, Rockwell Automation delivered a year-over-year improvement in both earnings and revenues. While sales missed the Zacks Consensus Estimate, earnings beat the same.

The company has surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 13.8%.

Rockwell Automation, Inc. Price and EPS Surprise Rockwell Automation, Inc. Price and EPS Surprise

Rockwell Automation, Inc. price-eps-surprise | Rockwell Automation, Inc. Quote

Q1 Estimates

The Zacks Consensus Estimate for the fiscal first-quarter revenues is pegged at $1.81 billion, indicating growth of 15% from the prior-year quarter. The same for earnings stands at $2.00, suggesting a 16% decline from the year-ago quarter. The earnings estimate has moved up 2% over the past 30 days.

Factors to Note

Rockwell Automation has been witnessing improvement in its order levels for the past five quarters. In the last reported quarter, the company delivered record orders of $2.2 billion driven by robust demand for core automation and digital transformation solutions with strong growth in Connected Services. It marked a 40% improvement from the prior-year levels. The company noted that order growth was broad-based across all industries and businesses and is well above pre-pandemic levels. Total backlog was up more than 80% year over year. Per the Federal Reserve, total industrial production rose at an annual rate of 4% in the October-December quarter. This might have contributed to the company’s order book in the fiscal first quarter as well. Robust backlog, strong order levels and contributions from recent acquisitions are likely to get reflected in Rockwell Automation’s first-quarter top line.

These above-mentioned benefits might have been offset by the supply-chain headwinds currently faced by the industry. The manufacturing supply chain continues to be strained by the sharp rise in demand and the ongoing shortages of electronic components, along with pandemic-related events that have put additional pressures on manufacturing output and freight lanes. Inflated costs for commodities, components and freight services are expected to have dented the company’s margins in the quarter to be reported. The company’s focus on process improvement, functional streamlining, material cost savings and manufacturing productivity is likely to have negated some of these impacts.

Segment Expectations

For the Intelligent Devices segment, the Zacks Consensus Estimate for fourth-quarter fiscal 2022 revenues is pegged at $828 million, suggesting an improvement of 15% from the prior-year quarter. The Zacks Consensus Estimate for operating profit for the segment is pegged at $166 million, suggesting a year-over-year improvement of 19%.

The Zacks Consensus Estimate for the Software & Control segment’s first-quarter fiscal 2022 sales stands at $522 million, reflecting year-over-year growth of 18%. The consensus mark for the segment’s operating profit stands at $125 million, implying a 6% decline from the prior-year quarter.
The consensus mark for the Lifecycle Services segment’s first-quarter sales is pegged at $446 million, indicating growth of 11% from the year-ago quarter. The segment is expected to report an operating profit of $36 million, in-line with the year-ago quarter.

What the Zacks Model Unveils

Our proven model doesn’t predict an earnings beat for Rockwell Automation this season. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Rockwell Automation is -2.96%.

Zacks Rank: Rockwell Automation currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Share Price Performance

Zacks Investment ResearchImage Source: Zacks Investment Research

Over the past year, Rockwell Automation’s shares have gained 5.1% compared with the industry’s growth of 3.5%.

Stocks Poised to Beat Earnings Estimates

Here are some Industrial Product stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

UFP Technologies (UFPT - Free Report) has an Earnings ESP of +8.77% and a Zacks Rank #1. The Zacks Consensus Estimate for the company’s earnings for the fourth quarter of 2021 indicates year-over-year growth of 3.6%.

Shares of UFP Technologies have gained 13% over the past year. Over the last four quarters, UFPT’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 22.9%.

Tenaris (TS - Free Report) has an Earnings ESP of +30.2% and a Zacks Rank #2. The Zacks Consensus Estimate for the company’s earnings for the fourth quarter of 2021 suggests a year-over-year growth of 139%.

Shares of Tenaris have gained 18% over the past year. TS’ earnings topped the consensus mark in each of the trailing four quarters, the average surprise being 492.4%.

Dover Corporation (DOV - Free Report) has an Earnings ESP of +0.33% and a Zacks Rank #3. The Zacks Consensus Estimate for the company’s earnings for the fourth quarter of 2021 indicates year-over-year growth of 7%.

Shares of Dover have appreciated 6% over the past year. DOV earnings beat the consensus mark in each of the trailing four quarters, the average surprise being 13.8%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.