Rockwell Automation Reports Third Quarter 2015 Results

Rockwell Automation, Inc. has reported fiscal 2015 third quarter sales of $1,575.2 million, down 4.5 percent from $1,649.5 million in the third quarter of fiscal 2014. Organic sales grew 2.2 percent, and currency translation reduced sales by 6.8 percent.
Fiscal 2015 third quarter Adjusted EPS was $1.59, up 7 percent compared to $1.49 in the third quarter of fiscal 2014. Total segment operating earnings were $343.7 million in the third quarter of fiscal 2015, up 5 percent from $326.1 million in the same period of fiscal 2014. Total segment operating margin expanded to 21.8 percent from 19.8 percent a year ago, primarily due to higher organic sales and strong productivity, partially offset by increased spending.
On a GAAP basis, fiscal 2015 third quarter net income was $206.1 million or $1.52 per share, compared to $199.7 million or $1.43 per share in the third quarter of fiscal 2014. Pre-tax margin increased to 18.1 percent in the third quarter of fiscal 2015 from 16.6 percent in the same period last year.
Commenting on the results, Keith D. Nosbusch, chairman and chief executive officer, said, “I am pleased with our performance in the quarter. We delivered another quarter of solid earnings growth, significant margin expansion, and strong free cash flow despite continued headwinds from currency and a low growth environment. Through three quarters, Adjusted EPS was up 12 percent on lower reported sales. Our results demonstrate excellent execution in these market conditions.”
Outlook
Commenting on the outlook, Nosbusch added, “Given decelerating industrial production growth, we are lowering the midpoint of our full-year organic growth guidance by 1 point. We expect fiscal 2015 reported sales of approximately $6.4 billion, and are narrowing our fiscal 2015 Adjusted EPS guidance range to $6.55 to $6.70.
“We remain focused on innovation, and I am confident in our ability to deliver attractive shareowner returns while we continue to invest in profitable growth opportunities.”
Following is a discussion of fiscal 2015 third quarter results for both segments.
Architecture & Software
Architecture & Software quarterly sales were $683.5 million, a decrease of 4.4 percent compared to $715.2 million in the same period last year. Organic sales increased 3.1 percent, and currency translation reduced sales by 7.5 percent. Segment operating earnings were $199.9 million compared to $204.8 million in the same period last year. Segment operating margin increased to 29.2 percent from 28.6 percent a year ago.
Control Products & Solutions
Control Products & Solutions quarterly sales were $891.7 million, a decrease of 4.6 percent compared to $934.3 million in the same period last year. Organic sales increased 1.6 percent, and currency translation reduced sales by 6.3 percent. Segment operating earnings were $143.8 million compared to $121.3 million in the same period last year. Segment operating margin increased to 16.1 percent from 13.0 percent a year ago.
Other Information
In the third quarter of fiscal 2015 free cash flow was $266.7 million and cash flow provided by operating activities was $286.3 million. Return on invested capital was 33.1 percent.
Fiscal 2015 third quarter general corporate-net expense was $21.9 million compared to $18.1 million in the third quarter of fiscal 2014.
The Adjusted Effective Tax Rate for the third quarter of fiscal 2015 was 27.9 percent compared to 27.6 percent in the third quarter of fiscal 2014. The Company now expects a full-year Adjusted Effective Tax Rate for fiscal 2015 of approximately 27 percent. On a GAAP basis, the effective tax rate in the third quarter of fiscal 2015 was 27.6 percent compared to 27.1 percent a year ago.
During the third quarter of fiscal 2015, the Company repurchased 956 thousand shares of its common stock at a cost of $115.3 million. At June 30, 2015, $641.7 million remained available under the existing share repurchase authorization.
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.
Conference Call
A conference call to discuss our financial results will take place at 8:30 a.m. Eastern Time on Wednesday, July 29, 2015. The call and related financial charts will be webcast and accessible via the Rockwell Automation website (http://www.rockwellautomation.com/investors/).