Replies to post #547 on Rockwell Automation (ROK)

[Investorman]

Yep. ROK doing well and I received a great pair of bear paw slippers for Christmas.... I am very cool and the neighbors are jealous. :)

[Investorman]

Wall Street is expecting higher profit for Rockwell Automation (ROK) when the company reports its second quarter results on Wednesday, April 25, 2012. The consensus estimate is calling for profit of $1.26 a share, a rise from $1.14 per share a year ago.

What to Expect:

For the fiscal year, analysts are projecting earnings of $5.32 per share.

Revenue is projected to be 7.2% above the year-earlier total of $1.46 billion at $1.57 billion for the quarter. For the year, revenue is expected to come in at $6.41 billion.

Trends to Watch For:

For three straight quarters, the company has seen net income rise. In the most recent quarter, net income rose by 22.1% from the year-earlier period. Net income rose 53.7% in the quarter before that, and 50.3% in the third quarter of the last fiscal year.

[Investorman]

Rockwell Automation (ROK) manufactures tools and controls used to increase efficiency at factories. Fittingly, the firm has been reducing its exposure to U.S. manufacturing in recent years, taking advantage of massive manufacturing expansion overseas to retool new factories in Europe and emerging markets. That widened geographic footprint should help to reduce economic swings in ROK’s revenues.

Those swings should also be reduced thanks to changes in ROK’s business. Because Rockwell’s focus is on reducing costs for customers, it has an easier sale than other firms that are trying to tack less palpable products onto factory floors. If Rockwell can justify the cost savings of its automation equipment, it should get the same -- now that management has sold off the more cyclical power systems business, that consistency should be more apparent on its income statement.

Rockwell has a long track record of returning free cash to shareholders; in the last few years, it’s averaged sending around half of all the cash it generates back to its owners. With profits eclipsing pre-recession highs, that’s good evidence for a hike to ROK’s 43-cent quarterly payout.