Rockwell Automation Reports Fourth Quarter and Full Year 2017 Results
Monday 4th December 2017 – Rockwell Automation reported fiscal 2017 fourth quarter sales of $1,667.5 million, up 8.4 percent from $1,538.6 million in the fourth quarter of fiscal 2016. Organic sales grew 5.6 percent. Currency translation increased sales by 1.5 percentage points, and acquisitions contributed 1.3 percentage points to sales growth.
Fiscal 2017 fourth quarter net income was $204.6 million or $1.57 per share, compared to $185.2 million or $1.43 per share in the fourth quarter of fiscal 2016. Fiscal 2017 fourth quarter Adjusted EPS was $1.69, up 11 percent compared to $1.52 in the fourth quarter of fiscal 2016. In the fourth quarter of fiscal 2017 we divested a business for $94.0 million and recorded a pre-tax gain on the divestiture of $60.8 million ($35.5 million after tax or $0.28 per share). In addition, we recorded $43.0 million of pre-tax restructuring charges ($30.7 million after tax or $0.24 per share) in the fourth quarter of fiscal 2017. The increases in EPS and Adjusted EPS were primarily due to higher sales and the gain on the divestiture, partially offset by higher investment spending, incentive compensation, and restructuring charges.
Pre-tax margin, which includes the gain on the divestiture, was 16.4 percent in the fourth quarter of fiscal 2017, compared to 15.4 percent in the same period last year. The increase in pre-tax margin was primarily due to the gain on the divestiture and higher sales, partially offset by higher investment spending, restructuring charges, and incentive compensation.
Total segment operating margin was 17.0 percent compared to 19.8 percent a year ago. The decrease in total segment operating margin was primarily due to higher investment spending, restructuring charges, and incentive compensation, partially offset by higher sales. Total segment operating earnings were $283.5 million in the fourth quarter of fiscal 2017, down 7 percent from $304.3 million in the same period of fiscal 2016.
Sales were $6,311.3 million in fiscal 2017, up 7.3 percent from $5,879.5 million in fiscal 2016. Organic sales grew 6.1 percent. Currency translation reduced sales by 0.3 percentage points, and acquisitions contributed 1.5 percentage points to sales growth.
Fiscal 2017 net income was $825.7 million or $6.35 per share, compared to $729.7 million or $5.56 per share in fiscal 2016. Fiscal 2017 Adjusted EPS was $6.76, up 14 percent compared to $5.93 in fiscal 2016. The increases in EPS and Adjusted EPS were primarily due to higher sales, the gain on the divestiture, and lower effective tax rates, partially offset by higher incentive compensation and restructuring charges.
Pre-tax margin, which includes the gain on the divestiture, was 16.4 percent in fiscal 2017, compared to 16.0 percent last year. The increase in pre-tax margin was primarily due to higher sales and the gain on the divestiture, partially offset by higher incentive compensation and restructuring charges.
Total segment operating margin was 19.5 percent compared to 20.2 percent a year ago. The decrease in total segment operating margin was primarily due to higher incentive compensation and restructuring charges, partially offset by higher sales. Total segment operating earnings were $1,233.1 million in fiscal 2017, up 4 percent from $1,188.7 million in fiscal 2016.
Commenting on the results, Blake D. Moret, president and chief executive officer, said, “We are pleased with our sales and earnings performance in the quarter. We delivered 6 percent organic sales growth and 11 percent Adjusted EPS growth, which were slightly above our expectations. We saw positive contributions from all regions and broad-based growth across most verticals, particularly automotive, food and beverage, semiconductor, chemicals, and metals. Importantly, we saw oil and gas return to meaningful growth in the quarter, which helped our process business grow above the company average.
“In the quarter, we divested a small business and also initiated restructuring plans. These actions accelerate our ongoing efforts to sharpen our focus on The Connected Enterprise strategy and further enhance the competitiveness of our products, services, and solutions. We will continue to balance investments with our commitment to delivering profitable growth.
“Fiscal 2017 was a very good year for us. Organic sales grew 6 percent, EPS grew 14 percent, and we had solid free cash flow performance. We had a strong finish to the year in orders, which were up high single digits in the fourth quarter.
“Our employees, partners, and suppliers continue to differentiate us. I would like to thank them for their efforts every day.”
