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Why Did ROK Beat Analysts’ Fiscal 1Q17 Revenue Estimates?


Nov. 20 2020, Updated 5:07 p.m. ET

Rockwell Automation’s regional sales

Rockwell Automation (ROK) continues to derive a major portion of its revenues from the US. For fiscal 1Q17, ROK reported $820 million in sales from the US compared to $787 million during fiscal 1Q16. Notably, the company posted a 1.8% increase in its organic sales growth in the US market compared to a 5.9% decline in fiscal 1Q16.

Sales from EMEA (Europe, Middle East, and Africa) were down to $271 million compared to $274 million in fiscal 1Q16. According to the company’s earnings call, its orders were up year-over-year and ROK expects sales growth for the balance of the year in this region.

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During fiscal 1Q17, Rockwell Automation (ROK) witnessed strong growth in the transportation and consumer verticals in the Asia-Pacific region, with solid organic sales growth of 19.8%. ROK reported $205 million in its fiscal 1Q17 sales from the Asia-Pacific region compared to $173 million in fiscal 1Q16. Also, the company witnessed a strong revival in its organic growth in Canada with $83 million in sales compared to $79 million in fiscal 1Q16. Rockwell’s growth in Latin America was driven by Mexico and Brazil.

Consolidated revenues

For fiscal 1Q17, Rockwell Automation (ROK) reported ~$1.5 billion in consolidated sales compared to analysts’ expectations of ~$1.4 billion. The deviation from analysts’ expectations was primarily due to the company’s better-than-expected performance in the Asia-Pacific region, accompanied by a strong YoY rebound in organic growth across its major markets.

Rockwell Automation reported overall organic sales growth of 3.8% in fiscal 1Q17 compared to declines of 3.3% and 4.0% during fiscal 1Q16 and fiscal 4Q16, respectively. Also, the company’s recent acquisitions contributed to ~2% in sales growth in fiscal 1Q17.

For more on industrial (IYJ) companies, investors can look into Market Realist’s mergers and acquisitions series on Stanley Black & Decker (SWK)Rockwell Collins (COL), and Honeywell (HON).

Next, we’ll look into Rockwell Automation’s fiscal 1Q17 operating performance.


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