Rockwell Automation Reports Fourth Quarter and Full Year 2014 Results
Fourth quarter sales up 3.9 per cent year over year; up 4.4 per cent organically. Fourth quarter Adjusted EPS of US$1.86, up 15 per cent year over year; fourth quarter diluted EPS of US$1.79. Record sales and Adjusted EPS for full fiscal year 2014. Company provides fiscal 2015 Adjusted EPS guidance of US$6.55 - US$6.95.
- (1888PressRelease) November 13, 2014 - Rockwell Automation, Inc. (NYSE: ROK) has reported fiscal 2014 fourth quarter sales of US$1,781.8 million, up 3.9 per cent from US$1,715.7 million in the fourth quarter of fiscal 2013. Organic sales growth was 4.4 per cent, and currency translation reduced sales by 0.7 per cent. Fiscal 2014 fourth quarter sales were up 8.0 per cent compared to the third quarter of fiscal 2014, despite nearly a full point of currency headwind.
Fiscal 2014 fourth quarter Adjusted EPS was US$1.86, up 15 per cent compared to Adjusted EPS of US$1.62 in the fourth quarter of fiscal 2013. Total segment operating earnings were US$395.8 million in the fourth quarter of fiscal 2014, up 11 per cent compared to US$357.8 million in the same period last year. Total segment operating margin increased to 22.2 per cent from 20.9 per cent a year ago, primarily due to higher sales, partially offset by increased spending.
On a GAAP basis, fiscal 2014 fourth quarter net income was US$248.7 million or US$1.79 per share, compared to US$215.3 million or US$1.53 per share in the fourth quarter of fiscal 2013. Pre-tax margin increased to 19.0 per cent from 16.3 per cent in the same period last year.
Full Fiscal Year 2014
Sales were US$6,623.5 million in fiscal 2014, up 4.3 per cent compared to US$6,351.9 million in fiscal 2013. Organic sales increased 5.1 per cent, and currency translation reduced sales by 1.0 per cent.
Fiscal 2014 Adjusted EPS was US$6.17, up 8 per cent compared to Adjusted EPS of US$5.71 in fiscal 2013. Total segment operating earnings increased 9 per cent to US$1,352.0 million in fiscal 2014 compared to US$1,236.8 million in fiscal 2013. Total segment operating margin increased to 20.4 per cent from 19.5 per cent a year ago, primarily due to higher sales, partially offset by increased spending.
On a GAAP basis, fiscal 2014 net income was US$826.8 million or US$5.91 per share, compared to US$756.3 million or US$5.36 per share in fiscal 2013. Pre-tax margin increased to 17.1 per cent from 15.4 per cent a year ago.
Commenting on the results, Keith D. Nosbusch, Chairman and Chief Executive Officer, said, "Results in the quarter were about as we expected with strong earnings on solid sales growth. Adjusted EPS grew an impressive 15 per cent on 4.4 per cent organic sales growth."
"For the full year we again achieved record sales and earnings per share. The U.S. led our sales performance with 7 per cent organic growth, whilst segment operating margin increased almost a point for the second year in a row."
"We continued our strong track record of returning cash to shareowners in fiscal 2014 with over US$800 million in dividends and share repurchases. That represents 87 per cent of free cash flow for the year. During the year, we authorised an additional US$1 billion in share repurchases, and we have more than doubled the dividend over the last five years."
"These results would not be possible without the efforts of our employees, partners, and suppliers, and I want to thank them all for their ongoing commitment to our customers and their contributions to our success."
Outlook
Commenting on the outlook, Nosbusch said, "Despite heightened uncertainty in some regions, the U.S. economy remains strong, and forecasts call for continued moderate global economic growth. Based on these factors, along with underlying demand trends, we are projecting fiscal 2015 organic sales growth of 2.5 per cent to 6.5 per cent and initiating fiscal 2015 Adjusted EPS guidance of US$6.55 - US$6.95."
"The key drivers of automation growth remain intact, and we believe we have the right strategy to capitalise on these opportunities. We will continue to invest in innovative technology and domain expertise to expand the value we provide to our customers, whilst delivering superior returns to our shareowners."
Following is a discussion of fourth quarter and full year results for both segments.
Architecture & Software
Architecture & Software fiscal 2014 fourth quarter sales were US$747.4 million, an increase of 4.6 per cent from US$714.3 million in the same period last year. Organic sales increased 5.2 per cent, and currency translation reduced sales by 0.7 per cent. Segment operating earnings were US$232.7 million in the fourth quarter of fiscal 2014 compared to US$217.7 million in the fourth quarter of fiscal 2013. Segment operating margin increased to 31.1 per cent in the fourth quarter of fiscal 2014 from 30.5 per cent a year ago.
Architecture & Software fiscal 2014 sales were US$2,845.3 million, an increase of 6.1 per cent from US$2,682.0 million last year. Fiscal 2014 organic sales were up 6.8 per cent, and currency translation reduced sales by 0.7 per cent. Segment operating earnings were US$839.6 million in fiscal 2014 compared to US$759.4 million in fiscal 2013. Segment operating margin increased to 29.5 per cent in fiscal 2014 from 28.3 per cent a year ago.
Control Products & Solutions
Control Products & Solutions fiscal 2014 fourth quarter sales were US$1,034.4 million, an increase of 3.3 per cent from US$1,001.4 million in the same period last year. Organic sales increased 3.8 per cent, and currency translation reduced sales by 0.8 per cent. Segment operating earnings increased 16 per cent to US$163.1 million in the fourth quarter of fiscal 2014 compared to US$140.1 million in the fourth quarter of fiscal 2013. Segment operating margin was 15.8 per cent in the fourth quarter of fiscal 2014, compared to 14.0 per cent a year ago.
Control Products & Solutions fiscal 2014 sales were US$3,778.2 million, an increase of 3.0 per cent from US$3,669.9 million last year. Organic sales increased 3.8 per cent, and currency translation reduced sales by 1.1 per cent. Segment operating earnings increased to US$512.4 million in fiscal 2014 compared to US$477.4 million in fiscal 2013. Segment operating margin was 13.6 per cent in fiscal 2014 compared to 13.0 per cent a year ago.
Other Information
Free cash flow was US$282.1 million in the fourth quarter of fiscal 2014. Cash flow provided by operating activities was US$325.9 million in the fourth quarter of fiscal 2014. Full fiscal year 2014 free cash flow was US$922.2 million, 107 per cent of Adjusted Income. Cash flow provided by operating activities for the full fiscal year 2014 was US$1,033.3 million. Return on invested capital was 30.1 per cent.
Fiscal 2014 fourth quarter general corporate net expense was US$22.3 million compared to US$39.7 million in the fourth quarter of 2013. General corporate net expense was US$81.0 million for the full fiscal year 2014 compared to US$97.2 million in fiscal 2013. The year-over-year decreases in both the quarter and the full year were primarily due to fourth quarter fiscal 2013 charges related to legacy environmental matters.
The Adjusted Effective Tax Rate for the fourth quarter of fiscal 2014 was 27.0 per cent compared to 23.7 per cent in the fourth quarter of 2013. The Adjusted Effective Tax Rate for the full fiscal year 2014 was 27.5 per cent compared to 23.9 per cent in fiscal 2013. The lower rate in fiscal 2013 was primarily due to discrete tax benefits recognised in that year.
The effective tax rate for the fourth quarter of fiscal 2014 was 26.6 per cent compared to 22.9 per cent in the fourth quarter of 2013. The effective tax rate for the full fiscal year 2014 was 27.1 per cent compared to 22.9 per cent in fiscal 2013.
During the fourth quarter of fiscal 2014, the Company repurchased 1.2 million shares of its common stock at a cost of US$140.0 million. During fiscal year 2014, the Company repurchased 4.1 million shares of its common stock at a cost of US$483.8 million. As of 30 September 2014, US$1,051.4 million remained available under previous share repurchase authorisations.
On 5 November 2014, the Board of Directors declared a 12 per cent increase in the quarterly dividend to 65 cents per share on common stock, payable on 10 December 2014.
Organic sales, total segment operating earnings, total segment operating margin, Adjusted Income, Adjusted EPS, Adjusted Effective Tax Rate, free cash flow and return on invested capital are non-GAAP measures that are reconciled to GAAP measures in the attachments to this release.
This news release contains statements (including certain projections and business trends) that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Words such as "believe", "estimate", "project", "plan", "expect", "anticipate", "will", "intend" and other similar expressions may identify forward-looking statements. Actual results may differ materially from those projected as a result of certain risks and uncertainties, many of which are beyond our control, including but not limited to:
- Macroeconomic factors, including global and regional business conditions, the availability and cost of capital, commodity prices, the cyclical nature of our customers' capital spending, sovereign debt concerns and currency exchange rates;
- Laws, regulations and governmental policies affecting our activities in the countries where we do business;
- The successful development of advanced technologies and demand for and market acceptance of new and existing products;
- The availability, effectiveness and security of our information-technology systems;
- Competitive products, solutions and services and pricing pressures, and our ability to provide high-quality products, solutions and services;
- A disruption of our business due to natural disasters, pandemics, acts of war, strikes, terrorism, social unrest or other causes;
- Intellectual-property infringement claims by others and the ability to protect our intellectual property;
- The uncertainty of claims by taxing authorities in the various jurisdictions where we do business;
- Our ability to attract and retain qualified personnel;
- Our ability to manage costs related to employee retirement and health care benefits;
- The uncertainties of litigation, including liabilities related to the safety and security of the products, solutions and services we sell;
- Our ability to manage and mitigate the risks associated with our solutions and services businesses;
- A disruption of our distribution channels;
- The availability and price of components and materials;
- The successful integration and management of acquired businesses;
- The successful execution of our cost productivity and globalisation initiatives; and
- Other risks and uncertainties, including but not limited to those detailed from time to time in our Securities and Exchange Commission (SEC) filings.
These forward-looking statements reflect our beliefs as of the date of filing this release. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
About Rockwell Automation
Rockwell Automation, Inc. (NYSE: ROK), the world's largest company dedicated to industrial automation and information, makes its customers more productive and the world more sustainable. Headquartered in Milwaukee, Wis., Rockwell Automation employs about 22,000 people serving customers in more than 80 countries.
Media contact:
Joy Francisco
Asia-Pacific Connections for Rockwell Automation
joy ( @ ) apconnections dot com
+65 6334 9045.
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