Rockwell Automation’s Q1 Results Beat Estimates, Reaffirms FY22 Guidance; Shares Fall 3.7%

Shares of Rockwell Automation, Inc. (NYSE: ROK) closed 3.7% down on Thursday, even after the company reported better-than-expected financial results for the fiscal first quarter ended December 31, 2021.

Wisconsin-based Rockwell provides industrial automation and information technology services. Its brands include Allen-Bradley and Factory Talk, among others.

Adjusted earnings per share (EPS) declined 10.1% year-over-year to $2.14 but beat the Street’s estimate of $1.91.

Sales increased 18.7% year-over-year to $1.86 billion, coming in just above analysts’ expectations of $1.81 billion.

Intelligent Devices sales grew 24.7% to $900 million; Software & Control sales rose 16.5% to $514 million; and Lifecycle Services sales jumped 10.1% to $443 million.

Pre-tax margin stood at 15.2%, down from 44.8% in the same period last year, primarily due to investment in PTC.

Commenting on the results, Rockwell’s Chairman and CEO Blake Moret said, “Rockwell had an excellent start to Fiscal Year 2022, with first-quarter sales up 18.7% and orders up over 40% to a quarterly record of $2.5 billion. All three business segments delivered double-digit sales growth and continued exceptional execution in this challenging supply chain environment.”


The company has reaffirmed the guidance for the Fiscal Year 2022. It continues to expect adjusted EPS to range from $10.50 to $11.10 and sales growth of 16% to 19%.

The Street expects Rockwell to report EPS and sales of $10.76 and $8.14 billion, respectively, in Fiscal Year 2022.

“We expect very strong growth this year, with total sales up 17.5% at the midpoint of our guidance range despite significant supply chain constraints,” Moret said.

Wall Street’s Take

Following the announcement of the results, Goldman Sachs (NYSE: GS) analyst Joe Ritchie maintained a Sell rating on Rockwell and lowered the price target to $294 from $326 (2.5% upside potential).

In a research note to investors, Ritchie said, “The company’s Q1 earnings beat was driven entirely by Intelligent Devices, with segment EBIT rising 30% relative to consensus.”

Additionally, Nigel Coe of Wolfe Research reiterated a Sell rating on the stock and reduced the price target from $311 to $302 (5.2% upside potential).

Based on 6 Buys, 6 Holds and 4 Sells, Rockwell has a Hold consensus rating. The average ROK stock forecast of $336.81 implies 17.4% upside potential from current levels. Shares have gained 17.2% over the past year.

Blogger Opinions

TipRanks data shows that financial blogger opinions are 83% Bullish on Rockwell, compared to the sector average of 72%.

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