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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 Estimate.
The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing on one occasion, the average surprise being a negative 0.33%.
The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $1.89 billion, indicating growth of 1.9% from the prior-year quarter. The same for earnings is pegged at $1.81, suggesting a decrease of 15.4% from the year-ago quarter. The earnings estimates have moved up 3% in the past 30 days.
Factors to Note
Rockwell Automation has been witnessing improvement in order levels in the past few quarters. In fiscal 2022, the company reported record order levels of more than $10 billion, which marked 20% growth from the prior fiscal. Low order cancellation rates indicate the solid underlying demand from customers across many industries and regions.
Strong demand for software and cyber security services and a robust order backlog of $5 billion are likely to have aided Rockwell Automation’s fiscal first-quarter top line. Per the Federal Reserve, total industrial production rose at an annual rate of 1.7% in the October-December quarter. This might have contributed to the company’s order book in the fiscal first quarter.
The company’s bottom-line results are however expected to be hurt by supply-chain challenges and cost inflation that persisted throughout the quarter. The manufacturing supply chain continued to be strained by the sharp rise in demand and the shortages of electronic components. Also, higher logistics costs due to elevated energy costs and constrained air freight lanes are expected to have impacted margins in the quarter. Increased spending on talent and growth, unfavorable mix, as well as unfavorable currency also anticipated to have added pressure on its margin performance.
Segment Expectations
For the Intelligent Devices segment, the Zacks Consensus Estimate for first-quarter fiscal 2023 revenues is pegged at $922 million, suggesting an improvement of 2% from the prior-year quarter’s levels. The Zacks Consensus Estimate for operating profit in the segment is pegged at $192 million, suggesting a year-over-year decline of 10%.
The Zacks Consensus Estimate for the Software & Control segment’s sales for the quarter under review is currently at $539 million, suggesting year-over-year growth of 5%. The consensus mark for the segment’s operating profit is pegged at $94 million, indicating a plunge of 20% from the prior-year quarter’s levels.
The consensus mark for the Lifecycle Services segment’s fiscal first-quarter sales is pegged at $452 million, indicating growth of 2% from the year-ago quarter. The segment is expected to generate an operating profit of around $28 million in the quarter, suggesting 14% growth from the prior-year quarter’s $24.5 million.
What the Zacks Model Indicates
Our proven model predicts an earnings beat for Rockwell Automation for the first quarter. 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. This is precisely the case here.
Earnings ESP: Rockwell Automation has an Earnings ESP of +4.76%. 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 13.4% compared with the industry’s 13.5% decline.
Other 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:
Deere & Co. (DE - Free Report) currently has an Earnings ESP of +2.83% and a Zacks Rank of 2. The Zacks Consensus Estimate for DE’s first-quarter fiscal 2023 earnings have moved 2.6% north in the past 60 days and is currently pegged at $5.49 per share. The consensus mark suggests year-over-year growth of 88.1%
The Zacks Consensus Estimate for DE’s quarterly revenues is pegged at $11.4 billion, indicating growth of 33.9% from the prior-year quarter’s levels. DE has a trailing four-quarter earnings surprise of 7.1%, on average.
Xylem (XYL - Free Report) currently has an Earnings ESP of +2.10% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has been stable in the past 60 days and is currently pegged at 79 cents per share. This suggests year-over-year growth of 25.4%
The Zacks Consensus Estimate for XYL’s quarterly revenues is pegged at $1.4 billion, indicating year-over-year growth of 6.1%. XYL has a trailing four-quarter earnings surprise of 13.3%, on average.
Illinois Tool Works (ITW - Free Report) currently has an Earnings ESP of +1.92% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has increased 0.4% in the past 60 days and is currently pegged at $2.61 per share. This suggests year-over-year growth of 33.8%
The Zacks Consensus Estimate for quarterly revenues is pegged at $3.9 billion, indicating growth of 5.3% from the prior-year quarter’s levels. ITW has a trailing four-quarter earnings surprise of 4.2%, on average.
Image: Bigstock
What Awaits Rockwell Automation (ROK) in Q1 Earnings?
Rockwell Automation Inc. (ROK - Free Report) is scheduled to report first-quarter fiscal 2023 results before the opening bell on Jan 26.
Q4 Performance
In the last reported quarter, Rockwell Automation’s earnings and revenues improved year over year and also beat the respective Zacks Consensus Estimate.
The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing on one occasion, the average surprise being a negative 0.33%.
Rockwell Automation, Inc. Price and EPS Surprise
Rockwell Automation, Inc. price-eps-surprise | Rockwell Automation, Inc. Quote
Q1 Estimates
The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $1.89 billion, indicating growth of 1.9% from the prior-year quarter. The same for earnings is pegged at $1.81, suggesting a decrease of 15.4% from the year-ago quarter. The earnings estimates have moved up 3% in the past 30 days.
Factors to Note
Rockwell Automation has been witnessing improvement in order levels in the past few quarters. In fiscal 2022, the company reported record order levels of more than $10 billion, which marked 20% growth from the prior fiscal. Low order cancellation rates indicate the solid underlying demand from customers across many industries and regions.
Strong demand for software and cyber security services and a robust order backlog of $5 billion are likely to have aided Rockwell Automation’s fiscal first-quarter top line. Per the Federal Reserve, total industrial production rose at an annual rate of 1.7% in the October-December quarter. This might have contributed to the company’s order book in the fiscal first quarter.
The company’s bottom-line results are however expected to be hurt by supply-chain challenges and cost inflation that persisted throughout the quarter. The manufacturing supply chain continued to be strained by the sharp rise in demand and the shortages of electronic components. Also, higher logistics costs due to elevated energy costs and constrained air freight lanes are expected to have impacted margins in the quarter. Increased spending on talent and growth, unfavorable mix, as well as unfavorable currency also anticipated to have added pressure on its margin performance.
Segment Expectations
For the Intelligent Devices segment, the Zacks Consensus Estimate for first-quarter fiscal 2023 revenues is pegged at $922 million, suggesting an improvement of 2% from the prior-year quarter’s levels. The Zacks Consensus Estimate for operating profit in the segment is pegged at $192 million, suggesting a year-over-year decline of 10%.
The Zacks Consensus Estimate for the Software & Control segment’s sales for the quarter under review is currently at $539 million, suggesting year-over-year growth of 5%. The consensus mark for the segment’s operating profit is pegged at $94 million, indicating a plunge of 20% from the prior-year quarter’s levels.
The consensus mark for the Lifecycle Services segment’s fiscal first-quarter sales is pegged at $452 million, indicating growth of 2% from the year-ago quarter. The segment is expected to generate an operating profit of around $28 million in the quarter, suggesting 14% growth from the prior-year quarter’s $24.5 million.
What the Zacks Model Indicates
Our proven model predicts an earnings beat for Rockwell Automation for the first quarter. 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. This is precisely the case here.
Earnings ESP: Rockwell Automation has an Earnings ESP of +4.76%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 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 13.4% compared with the industry’s 13.5% decline.
Other 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:
Deere & Co. (DE - Free Report) currently has an Earnings ESP of +2.83% and a Zacks Rank of 2. The Zacks Consensus Estimate for DE’s first-quarter fiscal 2023 earnings have moved 2.6% north in the past 60 days and is currently pegged at $5.49 per share. The consensus mark suggests year-over-year growth of 88.1%
The Zacks Consensus Estimate for DE’s quarterly revenues is pegged at $11.4 billion, indicating growth of 33.9% from the prior-year quarter’s levels. DE has a trailing four-quarter earnings surprise of 7.1%, on average.
Xylem (XYL - Free Report) currently has an Earnings ESP of +2.10% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has been stable in the past 60 days and is currently pegged at 79 cents per share. This suggests year-over-year growth of 25.4%
The Zacks Consensus Estimate for XYL’s quarterly revenues is pegged at $1.4 billion, indicating year-over-year growth of 6.1%. XYL has a trailing four-quarter earnings surprise of 13.3%, on average.
Illinois Tool Works (ITW - Free Report) currently has an Earnings ESP of +1.92% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has increased 0.4% in the past 60 days and is currently pegged at $2.61 per share. This suggests year-over-year growth of 33.8%
The Zacks Consensus Estimate for quarterly revenues is pegged at $3.9 billion, indicating growth of 5.3% from the prior-year quarter’s levels. ITW has a trailing four-quarter earnings surprise of 4.2%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.