Rockwell Automation raises profit, sales outlooks

Citing an improved outlook for industrial production, Rockwell Automation Inc. on Wednesday raised its revenue and profit forecast for the year, while announcing strong quarterly earnings.

The Milwaukee-based maker of factory automation equipment said it now expects full-year sales growth of 4.5% to 7.5%, up from a previous forecast of 1% to 1.5%.

Rockwell also raised its full-year adjusted profit outlook to between $6.45 and $6.75 per share, from an earlier estimate of $5.95 to $6.35.

“The macro environment continues to improve, with projections of industrial production growth rates higher than a quarter ago,” said CEO and President Blake Moret.

With President Donald Trump pushing for expansion of U.S. manufacturing, Rockwell and companies like it could be well positioned  to increase sales of equipment that help factories be more efficient.

“There’s no question that there’s a pervasive optimism among most manufacturers about the prospects for a more competitive environment going forward,” Moret said in a conference call with analysts.

Rockwell says it’s the largest company focused on industrial automation and information systems.

“We have some anecdotal evidence that certain of our customers have slowed or delayed any moves that they might have been considering to move manufacturing out of the U.S.," Moret said. "And we certainly see manufacturers, both U.S.-based manufacturers and manufacturers from the rest of the world, optimistic about the power of American consumers. … There’s a general optimism.”

In its recent quarter that ended March 31, Rockwell said, its net income rose to $189.5 million, or $1.45 per share, from $168 million, or $1.28 per share, a year earlier.

Revenue climbed 7.9% to $1.55 billion.

“The results for the second quarter of fiscal 2017 were better than our expectations,” Moret said.

The results exceeded Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of $1.40 per share.

Rockwell said its growth was broad based across most regions and industries. The company’s largest market, the U.S., grew more than 5%.

Rockwell’s highest growth in the quarter was in the Asia-Pacific region, Europe, the Middle East and Africa.

“In Asia-Pacific, China was up about 10% and we saw a strong growth in most countries in this region. In Latin America, continued growth in Mexico was more than offset by weakness elsewhere in the region,” said Chief Financial Officer Patrick Goris.

The overall growth seems consistent, according to the company.

“We really don’t see this as an unusual surge that’s going to quickly go away. The reason that we have the confidence in that is the growth is somewhat broad based. These aren’t one-time big projects that we’ve been tracking,” Moret said.

Rockwell shares have increased 19% since the beginning of the year, while the Standard & Poor’s 500 index has increased roughly 7%. The stock has increased 40% in the last 12 months.

Rockwell shares closed Wednesday at $159.96, down 18 cents.