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In the last reported quarter, Rockwell Automation’s earnings and revenues surpassed the respective Zacks Consensus Estimates. While the bottom line declined year over year, the top line rose year on year.
The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 9.5%.
Q2 Estimates
The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $1.95 billion, indicating growth of 9.6% from the prior-year quarter’s levels. The same for earnings is pegged at $2.27, suggesting a 5.8% decline from the year-ago quarter’s figure. The earnings estimates have been stable in the past 30 days.
Factors to Note
Rockwell Automation has been witnessing improvement in its order levels in the past few quarters. In the last reported quarter, the company delivered record orders of $2.5 billion, driven by robust demand for core automation and digital transformation solutions. Per the Federal Reserve, total industrial production rose at an annual rate of 8.1% in the January-March quarter. This might have contributed to the company’s order book in the fiscal second quarter. Strong demand for software and cyber security services, robust order backlog and contribution from recent acquisitions are likely to get reflected in Rockwell Automation’s fiscal second-quarter top line.
These above-mentioned benefits might have been offset by the ongoing supply-chain constraints. 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 and other global 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, price increase actions, functional streamlining and material cost savings are likely to have negated some of these impacts.
Segment Expectations
For the Intelligent Devices segment, the Zacks Consensus Estimate for second-quarter fiscal 2022 revenues is pegged at $926 million, suggesting an improvement of 9% from the prior-year quarter’s levels. The Zacks Consensus Estimate for operating profit in the segment is pegged at $191 million, suggesting a year-over-year decline of 5.4%.
The Zacks Consensus Estimate for the Software & Control segment’s second-quarter fiscal 2022 sales is at $566 million, suggesting year-over-year growth of 13%. The consensus mark for the segment’s operating profit is pegged at $144 million, calling for a 4% decline from the prior-year quarter’s levels.
The consensus mark for the Lifecycle Services segment’s fiscal second-quarter sales is pegged at $457 million, indicating growth of 7.8% from the year-ago quarter. The segment is expected to report an operating profit of $39.7 million in the quarter compared with the prior-year quarter’s $38.3 million.
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 -3.97%.
Zacks Rank: Rockwell Automation currently carries a Zacks Rank #4 (Sell).
In the past year, Rockwell Automation’s shares have lost 5.3% compared with the industry’s decline of 6.2%.
Image Source: Zacks Investment Research
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:
Deere & Company (DE - Free Report) currently has an Earnings ESP of +0.28% and a Zacks Rank of 2. The Zacks Consensus Estimate for second-quarter fiscal 2022 earnings is currently pegged at $6.68 per share, suggesting 17.6% growth from the year-ago quarter’s tally.
The Zacks Consensus Estimate for quarterly revenues is pinned at $13.5 billion, highlighting year-over-year growth of 22.5%. Deere has a trailing four-quarter earnings surprise of 20.6%, on average. It has a long-term earnings growth of 13.5%.
Illinois Tool Works Inc. (ITW - Free Report) currently has an Earnings ESP of +0.46% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter 2022 earnings has dropped 0.9% in the past 30 days and is currently pegged at $2.05 per share. The projection indicates a 2.8% decline from the prior-year quarter’s tally.
The Zacks Consensus Estimate for Illinois Tool’s quarterly revenues is pegged at $3.7 billion, which indicates a year-over-year improvement of 6.3%. ITW has a trailing four-quarter earnings surprise of 3.7%, on average.
Eaton Corporation plc (ETN - Free Report) currently has an Earnings ESP of +0.85% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2022 earnings has been stable in the past 30 days at $1.60 per share, suggesting a year-over-year growth of 11.1%.
The Zacks Consensus Estimate for Eaton’s quarterly revenues is pegged at $4.81 billion, which indicates an increase of 2.6% from the prior-year quarter’s levels. It has a trailing four-quarter earnings surprise of 6.98%, on average.
Image: Bigstock
What's in Store for Rockwell Automation's (ROK) Q2 Earnings?
Rockwell Automation Inc. (ROK - Free Report) is scheduled to report second-quarter fiscal 2022 results, before the opening bell on May 3.
Q1 Performance
In the last reported quarter, Rockwell Automation’s earnings and revenues surpassed the respective Zacks Consensus Estimates. While the bottom line declined year over year, the top line rose year on year.
The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 9.5%.
Q2 Estimates
The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $1.95 billion, indicating growth of 9.6% from the prior-year quarter’s levels. The same for earnings is pegged at $2.27, suggesting a 5.8% decline from the year-ago quarter’s figure. The earnings estimates have been stable in the past 30 days.
Factors to Note
Rockwell Automation has been witnessing improvement in its order levels in the past few quarters. In the last reported quarter, the company delivered record orders of $2.5 billion, driven by robust demand for core automation and digital transformation solutions. Per the Federal Reserve, total industrial production rose at an annual rate of 8.1% in the January-March quarter. This might have contributed to the company’s order book in the fiscal second quarter. Strong demand for software and cyber security services, robust order backlog and contribution from recent acquisitions are likely to get reflected in Rockwell Automation’s fiscal second-quarter top line.
These above-mentioned benefits might have been offset by the ongoing supply-chain constraints. 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 and other global 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, price increase actions, functional streamlining and material cost savings are likely to have negated some of these impacts.
Segment Expectations
For the Intelligent Devices segment, the Zacks Consensus Estimate for second-quarter fiscal 2022 revenues is pegged at $926 million, suggesting an improvement of 9% from the prior-year quarter’s levels. The Zacks Consensus Estimate for operating profit in the segment is pegged at $191 million, suggesting a year-over-year decline of 5.4%.
The Zacks Consensus Estimate for the Software & Control segment’s second-quarter fiscal 2022 sales is at $566 million, suggesting year-over-year growth of 13%. The consensus mark for the segment’s operating profit is pegged at $144 million, calling for a 4% decline from the prior-year quarter’s levels.
The consensus mark for the Lifecycle Services segment’s fiscal second-quarter sales is pegged at $457 million, indicating growth of 7.8% from the year-ago quarter. The segment is expected to report an operating profit of $39.7 million in the quarter compared with the prior-year quarter’s $38.3 million.
Rockwell Automation, Inc. Price and EPS Surprise
Rockwell Automation, Inc. price-eps-surprise | Rockwell Automation, Inc. Quote
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 -3.97%.
Zacks Rank: Rockwell Automation currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Share Price Performance
In the past year, Rockwell Automation’s shares have lost 5.3% compared with the industry’s decline of 6.2%.
Image Source: Zacks Investment Research
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:
Deere & Company (DE - Free Report) currently has an Earnings ESP of +0.28% and a Zacks Rank of 2. The Zacks Consensus Estimate for second-quarter fiscal 2022 earnings is currently pegged at $6.68 per share, suggesting 17.6% growth from the year-ago quarter’s tally.
The Zacks Consensus Estimate for quarterly revenues is pinned at $13.5 billion, highlighting year-over-year growth of 22.5%. Deere has a trailing four-quarter earnings surprise of 20.6%, on average. It has a long-term earnings growth of 13.5%.
Illinois Tool Works Inc. (ITW - Free Report) currently has an Earnings ESP of +0.46% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter 2022 earnings has dropped 0.9% in the past 30 days and is currently pegged at $2.05 per share. The projection indicates a 2.8% decline from the prior-year quarter’s tally.
The Zacks Consensus Estimate for Illinois Tool’s quarterly revenues is pegged at $3.7 billion, which indicates a year-over-year improvement of 6.3%. ITW has a trailing four-quarter earnings surprise of 3.7%, on average.
Eaton Corporation plc (ETN - Free Report) currently has an Earnings ESP of +0.85% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2022 earnings has been stable in the past 30 days at $1.60 per share, suggesting a year-over-year growth of 11.1%.
The Zacks Consensus Estimate for Eaton’s quarterly revenues is pegged at $4.81 billion, which indicates an increase of 2.6% from the prior-year quarter’s levels. It has a trailing four-quarter earnings surprise of 6.98%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.