Earnings Preview: Rockwell Automation
by: theflyonthewall.com posted on: July 21, 2008
Guidance
Analysts are looking for EPS of 99c on revenue of $1.43B. The consensus range is 95c to $1.10 for EPS, and $1.39B to $1.45B for revenue, according to First Call. The company stated on a conference call at the JP Morgan Basics & Industrials on June 3, it expects strong sales growth for the remainder of the year. On June 25 Rockwell gave guidance for Q3 EPS, expecting EPS in the range of 93c to $1.00 vs. consensus of 99c, and stated it expects its FY08 EPS to be below its previous guidance of $4.25 to $4.45 vs. consensus of $4.04.
Analyst Views
On June 4, Friedman Billings stated it views the company as a compelling opportunity at current levels and believes the stock is trading as if a recession is imminent and operating income will decline sharply. The firm does not expect drastic declines in operating income to occur and find the risk/reward favorable at current levels and reiterated its Outperform rating.
Gabelli gave Rockwell Automation a Buy rating on July 3, and believes OEMs will be more likely to buy Rockwell's products as energy and commodity prices jump, since the companies will be looking to reduce costs by becoming more efficient. The firm thinks the decline in the company's stock price has made it potentially attractive to strategic buyers, and forecasts that it will increase its penetration of several markets.
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