Rockwell Automation Inc. (ROK Quick QuoteROK - Free Report) delivered adjusted earnings of $2.21 in first-quarter fiscal 2019 (ended Dec 31, 2018), up 13% from the prior-year quarter figure of $1.96. The bottom line also surpassed the Zacks Consensus Estimate of $1.98.  Higher sales and lower share count led to improved results in the quarter. However, the bottom line was weighed down by higher investment spending.

 

Including one-time items, the company reported earnings of 66 cents per share against loss per share of $1.84 suffered in the year-ago quarter.

 

Total revenues came in at $1,642 million, up 4% year over year, surpassing the Zacks Consensus Estimate of $1,630 million. Organic sales rose 5.7% but foreign currency translations had a negative impact of 2.2%.

 

 

 

Cost of sales increased 2% year over year to $904 million. Gross profit increased 6% to $739 million from $700 million reported in the year-ago quarter. Selling, general and administrative expenses remained flat year over year at $387 million.

 

Consolidated segment operating income totaled $375 million, up 5% from $355 million recorded in the prior-year quarter. Segment operating margin was 22.8% in the fiscal first quarter, up 40 basis points from the year-earlier quarter aided by higher sales which was partially offset by higher investment spending.

 

 

Architecture & Software: Net sales rose 2% year over year to $753 million in the first quarter. While organic sales were up 4.6%, currency translation had a negative impact of 2.2%. Segment operating earnings came in at $237 million compared with $224 million recorded in the prior-year quarter. Segment operating margin was 31.5% compared with 30.5% witnessed in the year-ago quarter.

 

Control Products & Solutions: Net sales climbed 4.5% year over year to $889 million in the reported quarter. Organic sales increased 6.6% while currency translation reduced sales by 2.1%. Segment operating earnings increased 5% to $138 million from $131 million in the year-ago quarter. Segment operating margin came in at 15.5% compared with 15.4% recorded in the prior-year quarter.

 

 

As of Dec 31, 2018, cash and cash equivalents totaled $632 million, up from $619 million as of Sep 30, 2018. As of Dec 31, 2018, total debt was $1,867 million, up from $1,231 million as of Sep 30, 2018.

 

Cash flow from operations in the first quarter of fiscal 2019 was $212 million compared with $213 million in the prior-year quarter. Return on invested capital was 39.2% as of Dec 31, 2018 compared with 40.8% as of Dec 31, 2017.

 

During the reported quarter, Rockwell Automation repurchased 1.8 million shares for $293 million. As of the quarter end, $815.6 million was available under the existing share-repurchase authorization.

 

 

For fiscal 2019, Rockwell Automation maintained adjusted EPS guidance at $8.85-$9.25. It anticipates organic sales to grow 3.7-6.7%. The company continues to witness strong project quoting activity and strong backlog. Further, industrial production continues to demonstrate strong momentum. However, trade tensions and geopolitical risks remain concerns.

 

 

 

In a year’s time, Rockwell Automation’s shares have declined 16.7% compared with the industry’s decline of 17.4%.

 

 

Rockwell Automation carries a Zacks Rank #3 (Hold). 

 

Some better-ranked stocks in the sector include Alarm.com Holdings, Inc. (ALRM Quick QuoteALRM - Free Report) , Cintas Corporation (CTAS Quick QuoteCTAS - Free Report) and Enersys (ENS Quick QuoteENS - Free Report) . While Alarm.com Holdings sports a Zacks Rank #1 (Strong Buy), Cintas and Enersys carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Alarm.com has a long-term earnings growth rate of 17%. The stock has appreciated 65% over the past year.

 

Cintas has a long-term earnings growth rate of 12%. The company’s shares have gained around 12% over the past year.

 

Enersys has a long-term earnings growth rate of 10%. Its shares have gained 16% over the past year.

 

 

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