The Street.com
Rockwell Automation ROK
The primary factors that have impacted our rating are mixed with little evidence to justify the expectation of either a positive or negative performance for this stock. The Milwaukee-based company is a provider of industrial automation power, control and information solutions.
Rockwell Automation, reported revenue growth of 16.6% in its fiscal second quarter, boosted by organic growth of 6.7%, as well as a 6% contribution from foreign currency translation and 4% from acquisitions. Architecture and software sales grew 10.9% to $599 million, while control products and solutions sales climbed 21.2% to $807.6 million.
Higher cost of sales and operating expenses hurt Rockwell's margins. Gross profit margin declined 82 basis points to 42.27%, and operating margin decreased 81 basis points to 15.14%. Consequently, net income plummeted 80.4% to $142.8 million, as the company recorded income from discontinued operations of $3.80 a share in the same quarter in the prior year. However, Rockwell's EPS from continuing operations increased 47.7% to 96 cents from 65 cents.
A quick ratio of 1.18 reflects the company's healthy liquidity position. Return on equity surged 982 basis points to 33.54% from 23.72%, gaining from lower shareholder equity of $1.88 billion. Return on assets significantly dropped to 12.63% from 30.58%. The debt-to-equity ratio worsened to 0.65 from 0.35, as total debt increased 61.5% to $1.22 billion.
Rockwell Automation acquired Incuity Software, a privately held supplier of enterprise manufacturing intelligence software, which is expected to help in expanding its product suite and enhancing its plant-wide information strategy. Looking forward, Rockwell reaffirmed its full-year 2008 EPS guidance to be in the range of $4.25 to $4.45. Rockwell had been rated a buy since June 30, 2006.
AI
Market Data 
Markets 
