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In the last reported quarter, Rockwell Automation’s earnings and revenues improved year over year and also beat the respective Zacks Consensus Estimates.
The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being a positive 0.54%.
The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $2.11 billion, indicating growth of 16.9% from the prior-year quarter. The same for earnings is pegged at $2.94, suggesting an increase of 26.2% from the year-ago quarter. The earnings estimates have moved down 0.3% in the past 7 days.
Factors to Note
Rockwell Automation has been witnessing improvement in order levels in the past few quarters. In the last reported quarter, total orders rose 17% year over year, driven by robust demand for core automation and digital transformation solutions. Per the Federal Reserve, total industrial production rose at an annual rate of 2.9% in the July-September quarter. This might have contributed to the company’s order book in the fiscal third quarter.
Strong demand for software and cyber security services and a robust order backlog are likely to get reflected in Rockwell Automation’s fiscal third-quarter top line. Improved material flow from key suppliers is likely to have improved component shipments in the quarter.
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 fourth-quarter fiscal 2022 revenues is pegged at $953 million, suggesting an improvement of 11% from the prior-year quarter’s levels. The Zacks Consensus Estimate for operating profit in the segment is pegged at $216 million, suggesting a year-over-year surge of 30%.
The Zacks Consensus Estimate for the Software & Control segment’s fourth-quarter fiscal 2022 sales is at $622 million, suggesting year-over-year growth of 26%. The consensus mark for the segment’s operating profit is pegged at $197 million, calling for 64% growth from the prior-year quarter’s levels. Rockwell Automation is poised well to benefit from broadening the portfolio of hardware and software products, solutions and services while gaining from cloud investments.
The consensus mark for the Lifecycle Services segment’s fiscal fourth-quarter sales is pegged at $532 million, indicating growth of 16% from the year-ago quarter. The segment is expected to generate an operating profit of $71 million in the quarter, suggesting a 91% jump from the prior-year quarter’s $37.1 million.
What the Zacks Model Indicates
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 odds of an earnings beat. However, that’s not the case here.
Earnings ESP: Rockwell Automation has an Earnings ESP of -2.43%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
In the past year, Rockwell Automation’s shares have lost 23% compared with the industry’s decline of 25.6%.
Stocks Poised to Beat Earnings Estimates
Here are some Industrial Products stocks, which, according to our model, have the right combination of elements to post an earnings beat in their upcoming releases:
Sonoco Products Company (SON - Free Report) currently has an Earnings ESP of +4.20% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter 2022 earnings has remained unchanged at $1.43 over the past 60 days. The estimate suggests growth of 57% from the year-ago reported figure. SON has a trailing four-quarter earnings surprise of 4.1%, on average.
The Zacks Consensus Estimate for SON’s quarterly revenues is pegged at $1.92 billion. The estimate projects an increase of 57% from the prior-year quarter’s levels.
Mueller Water Products (MWA - Free Report) currently has an Earnings ESP of +17.65% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter 2022 earnings is currently pegged at 14 cents per share, suggesting 16.7% growth from the year-ago quarter. The estimate has gone up 8% over the past 60 days.
The Zacks Consensus Estimate for quarterly revenues is pinned at $320.7 million, suggesting growth of 8.5% from the prior-year tally. MWA has a trailing four-quarter earnings surprise of 5.17%, on average.
AGCO Corporation (AGCO - Free Report) currently has an Earnings ESP of +1.96% and a Zacks Rank #3. The Zacks Consensus Estimate for third-quarter 2022 earnings has gone up 0.3% in the past 60 days and is currently pegged at $3.12 per share. The projection indicates 29.5% growth from the year-ago reported figure.
The Zacks Consensus Estimate for AGCO’s quarterly revenues is pegged at $3.28 billion, which indicates an improvement of 20.4% from the year-ago reported figure. AGCO has a trailing four-quarter earnings surprise of 37.5%, on average.
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Rockwell Automation (ROK) to Report Q4 Earnings: What's in Store?
Rockwell Automation Inc. (ROK - Free Report) is scheduled to report fourth-quarter fiscal 2022 results before the opening bell on Nov 2.
Q3 Performance
In the last reported quarter, Rockwell Automation’s earnings and revenues improved year over year and also beat the respective Zacks Consensus Estimates.
The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being a positive 0.54%.
Rockwell Automation, Inc. Price and EPS Surprise
Rockwell Automation, Inc. price-eps-surprise | Rockwell Automation, Inc. Quote
Q4 Estimates
The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $2.11 billion, indicating growth of 16.9% from the prior-year quarter. The same for earnings is pegged at $2.94, suggesting an increase of 26.2% from the year-ago quarter. The earnings estimates have moved down 0.3% in the past 7 days.
Factors to Note
Rockwell Automation has been witnessing improvement in order levels in the past few quarters. In the last reported quarter, total orders rose 17% year over year, driven by robust demand for core automation and digital transformation solutions. Per the Federal Reserve, total industrial production rose at an annual rate of 2.9% in the July-September quarter. This might have contributed to the company’s order book in the fiscal third quarter.
Strong demand for software and cyber security services and a robust order backlog are likely to get reflected in Rockwell Automation’s fiscal third-quarter top line. Improved material flow from key suppliers is likely to have improved component shipments in the quarter.
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 fourth-quarter fiscal 2022 revenues is pegged at $953 million, suggesting an improvement of 11% from the prior-year quarter’s levels. The Zacks Consensus Estimate for operating profit in the segment is pegged at $216 million, suggesting a year-over-year surge of 30%.
The Zacks Consensus Estimate for the Software & Control segment’s fourth-quarter fiscal 2022 sales is at $622 million, suggesting year-over-year growth of 26%. The consensus mark for the segment’s operating profit is pegged at $197 million, calling for 64% growth from the prior-year quarter’s levels. Rockwell Automation is poised well to benefit from broadening the portfolio of hardware and software products, solutions and services while gaining from cloud investments.
The consensus mark for the Lifecycle Services segment’s fiscal fourth-quarter sales is pegged at $532 million, indicating growth of 16% from the year-ago quarter. The segment is expected to generate an operating profit of $71 million in the quarter, suggesting a 91% jump from the prior-year quarter’s $37.1 million.
What the Zacks Model Indicates
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 odds of an earnings beat. However, that’s not the case here.
Earnings ESP: Rockwell Automation has an Earnings ESP of -2.43%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Share Price Performance
Image Source: Zacks Investment Research
In the past year, Rockwell Automation’s shares have lost 23% compared with the industry’s decline of 25.6%.
Stocks Poised to Beat Earnings Estimates
Here are some Industrial Products stocks, which, according to our model, have the right combination of elements to post an earnings beat in their upcoming releases:
Sonoco Products Company (SON - Free Report) currently has an Earnings ESP of +4.20% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter 2022 earnings has remained unchanged at $1.43 over the past 60 days. The estimate suggests growth of 57% from the year-ago reported figure. SON has a trailing four-quarter earnings surprise of 4.1%, on average.
The Zacks Consensus Estimate for SON’s quarterly revenues is pegged at $1.92 billion. The estimate projects an increase of 57% from the prior-year quarter’s levels.
Mueller Water Products (MWA - Free Report) currently has an Earnings ESP of +17.65% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter 2022 earnings is currently pegged at 14 cents per share, suggesting 16.7% growth from the year-ago quarter. The estimate has gone up 8% over the past 60 days.
The Zacks Consensus Estimate for quarterly revenues is pinned at $320.7 million, suggesting growth of 8.5% from the prior-year tally. MWA has a trailing four-quarter earnings surprise of 5.17%, on average.
AGCO Corporation (AGCO - Free Report) currently has an Earnings ESP of +1.96% and a Zacks Rank #3. The Zacks Consensus Estimate for third-quarter 2022 earnings has gone up 0.3% in the past 60 days and is currently pegged at $3.12 per share. The projection indicates 29.5% growth from the year-ago reported figure.
The Zacks Consensus Estimate for AGCO’s quarterly revenues is pegged at $3.28 billion, which indicates an improvement of 20.4% from the year-ago reported figure. AGCO has a trailing four-quarter earnings surprise of 37.5%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.