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In the last reported quarter, the company’s earnings and revenues improved year over year. The top and bottom lines also beat the Zacks Consensus Estimate.
The company’s earnings surpassed estimates in the last trailing four quarters, the average surprise being 17.3%.
The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $2.3 billion, indicating an improvement of 16.7% from the prior-year quarter’s actual. The same for earnings is pinned at $3.18 per share, implying a 19.6% increase from the year-ago quarter’s reported figure. The company’s earnings estimates have moved down 1.5% in the past 30 days.
Factors to Note
In the past few quarters, Rockwell Automation has witnessed an improvement in order levels. Low order cancellation rates indicate solid underlying demand from customers across many industries and regions.
Ongoing capital investments in several end markets, coupled with higher automation and digital transformation, are expected to have supported solid order levels across all segments in the quarter under review. Our model predicts an organic sales growth of 10.5% for the quarter.
ROK’s performance has been impacted by ongoing material shortages and production delays in the earlier quarters. However, supply-chain issues have shown signs of easing lately. This is expected to have aided the company’s fiscal third-quarter performance.
Higher logistics costs due to elevated energy expenses and constrained air freight lanes are likely to have impacted margins. We expect selling, general & administrative expenses to increase 12.6% year over year in the quarter.
Higher sequential spending on product development, resiliency and the company’s annual merit increase timing are expected to have weighed on ROK’s margin performance. Nonetheless, the company’s price increase actions are likely to have mitigated the impacts of inflationary pressures and contributed to margin expansion.
Segmental Expectations
We expect the Intelligent Devices segment’s third-quarter fiscal 2023 revenues to be up 13.5% year over year to $996 million. Our prediction for the segment’s operating profit is pinned at $211 million, indicating a year-over-year increase of 21.6%.
Our model predicts the Software & Control segment’s sales at $691 million, suggesting an increase of 13.9% from the prior year’s actuals. The same for the segment’s operating profit is pinned at $202 million, indicating an increase of 21.6% from the year-ago quarter’s reported figure.
We expect the Lifecycle Services segment’s sales to be $515 million, indicating growth of 6.6% from the prior-year period’s actual. The same for the segment’s operating profit is pinned at $32 million, indicating a fall of 28.8% from the year-ago quarter’s reported figure.
What the Zacks Model Indicates
Our proven model predicts an earnings beat for Rockwell Automation this time around. 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 +0.31%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
In the past year, Rockwell Automation’s shares have gained 54% compared with the industry’s growth of 50%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Here are some other Industrial Products stocks worth considering, as our model shows that these also have the right combination of elements to beat on earnings in their upcoming releases.
AptarGroup, Inc. (ATR - Free Report) , scheduled to release earnings on Jul 27, presently has an Earnings ESP of +1.69% and a Zacks Rank of 2.
The Zacks Consensus Estimate for ATR’s earnings for the second quarter is pegged at $1.13 per share. The company has a trailing four-quarter surprise of 6.4%, on average.
Eaton Corporation plc (ETN - Free Report) , set to release earnings on Aug 1, currently has an Earnings ESP of +0.38% and a Zacks Rank of 2.
The consensus estimate for ETN’s earnings for the second quarter is pegged at $2.11 per share. The company has a trailing four-quarter surprise of 2.5%, on average.
Illinois Tool Works (ITW - Free Report) , set to release earnings on Aug 1, has an Earnings ESP of +0.54% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for ITW’s second-quarter earnings is pegged at $2.36 per share, suggesting a year-over-year improvement of 0.8%. The company has a trailing four-quarter surprise of 2.1%, on average.
Image: Bigstock
What's in Store for Rockwell Automation (ROK) in Q3 Earnings?
Rockwell Automation Inc. (ROK - Free Report) is scheduled to report third-quarter fiscal 2023 results on Aug 1, before the opening bell.
Q2 Performance
In the last reported quarter, the company’s earnings and revenues improved year over year. The top and bottom lines also beat the Zacks Consensus Estimate.
The company’s earnings surpassed estimates in the last trailing four quarters, the average surprise being 17.3%.
Rockwell Automation, Inc. Price and EPS Surprise
Rockwell Automation, Inc. price-eps-surprise | Rockwell Automation, Inc. Quote
Q3 Estimates
The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $2.3 billion, indicating an improvement of 16.7% from the prior-year quarter’s actual. The same for earnings is pinned at $3.18 per share, implying a 19.6% increase from the year-ago quarter’s reported figure. The company’s earnings estimates have moved down 1.5% in the past 30 days.
Factors to Note
In the past few quarters, Rockwell Automation has witnessed an improvement in order levels. Low order cancellation rates indicate solid underlying demand from customers across many industries and regions.
Ongoing capital investments in several end markets, coupled with higher automation and digital transformation, are expected to have supported solid order levels across all segments in the quarter under review. Our model predicts an organic sales growth of 10.5% for the quarter.
ROK’s performance has been impacted by ongoing material shortages and production delays in the earlier quarters. However, supply-chain issues have shown signs of easing lately. This is expected to have aided the company’s fiscal third-quarter performance.
Higher logistics costs due to elevated energy expenses and constrained air freight lanes are likely to have impacted margins. We expect selling, general & administrative expenses to increase 12.6% year over year in the quarter.
Higher sequential spending on product development, resiliency and the company’s annual merit increase timing are expected to have weighed on ROK’s margin performance. Nonetheless, the company’s price increase actions are likely to have mitigated the impacts of inflationary pressures and contributed to margin expansion.
Segmental Expectations
We expect the Intelligent Devices segment’s third-quarter fiscal 2023 revenues to be up 13.5% year over year to $996 million. Our prediction for the segment’s operating profit is pinned at $211 million, indicating a year-over-year increase of 21.6%.
Our model predicts the Software & Control segment’s sales at $691 million, suggesting an increase of 13.9% from the prior year’s actuals. The same for the segment’s operating profit is pinned at $202 million, indicating an increase of 21.6% from the year-ago quarter’s reported figure.
We expect the Lifecycle Services segment’s sales to be $515 million, indicating growth of 6.6% from the prior-year period’s actual. The same for the segment’s operating profit is pinned at $32 million, indicating a fall of 28.8% from the year-ago quarter’s reported figure.
What the Zacks Model Indicates
Our proven model predicts an earnings beat for Rockwell Automation this time around. 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 +0.31%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2. 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 gained 54% compared with the industry’s growth of 50%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Here are some other Industrial Products stocks worth considering, as our model shows that these also have the right combination of elements to beat on earnings in their upcoming releases.
AptarGroup, Inc. (ATR - Free Report) , scheduled to release earnings on Jul 27, presently has an Earnings ESP of +1.69% and a Zacks Rank of 2.
The Zacks Consensus Estimate for ATR’s earnings for the second quarter is pegged at $1.13 per share. The company has a trailing four-quarter surprise of 6.4%, on average.
Eaton Corporation plc (ETN - Free Report) , set to release earnings on Aug 1, currently has an Earnings ESP of +0.38% and a Zacks Rank of 2.
The consensus estimate for ETN’s earnings for the second quarter is pegged at $2.11 per share. The company has a trailing four-quarter surprise of 2.5%, on average.
Illinois Tool Works (ITW - Free Report) , set to release earnings on Aug 1, has an Earnings ESP of +0.54% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for ITW’s second-quarter earnings is pegged at $2.36 per share, suggesting a year-over-year improvement of 0.8%. The company has a trailing four-quarter surprise of 2.1%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.