Rockwell Automation Beats Q3 Estimates, Narrows FY21 Adjusted EPS Guidance

Rockwell Automation ROK reported third-quarter sales growth of 32.6% year-over-year to $1.85 billion and 26.4% on an organic basis, beating the consensus of $1.78 billion.
Sales by segments: Intelligent Devices $882.9 million (+33.8% Y/Y), Software & Control $509.6 million (+39.7% Y/Y) and Lifecycle Services $455.7 million (+23.4% Y/Y).
Adjusted EPS improved 75% to $2.31 from $1.32 in 3Q20, beating the consensus of $2.07.
The gross margin expanded by 160 bps to 41.4%.
Total segment operating earnings increased by 60.7% Y/Y to $368.7 million, and margin expanded by 340 bps to 19.9%.
Rockwell generated cash by operating activities year-to-date of $1.6 billion, compared to $794.7 million a year ago.
Cash flow provided by operating activities for the quarter was $461.5 million, compared to $346.2 million a year ago, with Free cash flow of $437 million.
The company repurchased ~0.2 million shares at the cost of $60.5 million. At quarter-end, $613.5 million remained available under the existing share repurchase authorization.
FY21 Outlook: The company expects sales growth of ~12% (previous guidance of 9%-12%) and Organic sales growth of ~8% (previous outlook 5.5% - 8.5%).
It expects Adjusted EPS of $9.10 - $9.30 (prior expectation $8.95 - $9.35) vs. consensus of $9.24, and EPS of $12.85 - $13.05 (prior expectation $12.53 - $12.93).
Price Action: ROK shares are down by 2.10% at $291.56 during the market session on the last check Tuesday.

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