Rockwell Automation Company (Korea – Free report) plans to report its financial results for the first quarter of fiscal 2023 before the opening ceremony on January 26.
Fourth quarter results
In the last reported quarter, Rockwell Automation’s earnings and earnings improved year-over-year and exceeded their respective Sachs Consensus estimates.
The company’s earnings have beaten Sachs’ consensus forecasts in three of the last four quarters, but fell short once. The average surprise was -0.33%.
Rockwell Automation, Inc. Pricing and EPS Surprise
The Zacks Consensus estimate for fiscal first quarter revenue is pegged at $1.89 billion, representing 1.9% growth from the year-ago quarter. The same was pegged for revenue at $1.81, suggesting a 15.4% decline from the same period last year. Revenue forecasts are up 3% over the last 30 days.
Factors to watch out for
Rockwell Automation has seen order level improvements over the past few quarters. In fiscal 2022, the company reported record order levels of over his $10 billion. This represented a 20% growth from the previous financial year. Low order cancellation rates indicate strong demand from customers across many industries and geographies.
Strong demand for software and cyber security services and a strong order backlog of $5 billion may have supported Rockwell Automation’s fiscal first quarter revenue. Total industrial production increased at an annualized rate of 1.7% in the October-December quarter, according to the Federal Reserve. This may have contributed to the company’s order intake in the first quarter of the fiscal year.
However, the company’s bottom line is expected to be hit by supply chain challenges and sustained cost inflation throughout the quarter. Manufacturing supply chains continue to be weighed down by surges in demand and shortages of electronic components. Higher energy costs and higher logistics costs due to air freight lane constraints are also expected to impact fourth quarter profit margins. Increased spending on talent and growth, an unfavorable mix, and unfavorable currencies were also expected to put pressure on margin performance.
For the Intelligent Devices segment, the Zacks consensus forecast for first quarter fiscal 2023 revenue is pegged at $922 million, suggesting a 2% improvement from the level of the same period last year. The Zachs Consensus estimate for the segment’s operating profit is pegged at $192 million, suggesting a 10% year-over-year decline.
The Zacks Consensus estimate for software and control segment revenue for the quarter is now $539 million, suggesting 5 percent year-over-year growth. The segment operating profit consensus mark was pegged at $94 million, marking a steep 20% decline from the level of the same period last year.
The lifecycle services segment revenue consensus mark for the first quarter was pegged at $452 million, representing 2 percent growth from the year-ago quarter. The segment is expected to generate operating income of approximately $28 million in the fourth quarter, suggesting 14% growth from $24.5 million in the same period last year.
What the Zacks Model Shows
Our proven model forecasts to outperform Rockwell Automation’s first quarter earnings. A combination of positive earnings ESP and a Zacks rank of 1 (strong buy), 2 (buy), or 3 (hold) increases the likelihood of winning above earnings. This is exactly the case here.
Revenue ESP: Rockwell Automation Revenue ESP is +4.76%. Earnings ESP filters help you find the best stocks before they’re even reported.
Zack Rank: The company currently holds a Zacks Rank 3. See the full list of today’s Zacks #1 ranked stocks here.
stock price performance
Image Source: Sachs Investment Research
Over the past year, Rockwell Automation stock has fallen 13.4% compared to the industry’s 13.5% decline.
Other stocks that may exceed forecasts
According to our model, these stocks have the right mix of factors to perform well in the next release.
Dear & Company (DE – Free Report) currently has a revenue ESP of +2.83% and a Zacks Rank of 2. The Zacks consensus forecast for DE’s first quarter fiscal year 2023 earnings is up 2.6% over the past 60 days and is currently pegged at $5.49 per share.Consensus marks suggest 88.1% year-on-year growth
The Zacks consensus forecast for DE’s quarterly revenue is pegged at $11.4 billion, representing a 33.9% growth from the level of the same period last year. DE’s guidance for the fourth quarter is 7.1% on average.
xylem (xyl – Free Report) currently has a Revenue ESP of +2.10% and a Zacks Rank of 3. Zacks consensus earnings forecast for Q4 2022 has been stable over the past 60 days and is currently pegged at 79 cents per share. This suggests a year-on-year growth of 25.4%.
XYL’s Zacks consensus forecast for quarterly revenue is pegged at $1.4 billion, representing 6.1% year-over-year growth. XYL’s Q4 earnings forecast averages 13.3%.
Illinois Tool Works (ITW – Free Report) currently has a revenue ESP of +1.92% and a Zacks rank of 3. The Zacks Consensus estimate for fourth quarter 2022 earnings has increased 0.4% over the past 60 days and is now pegged at $2.61 per share. This suggests a year-on-year growth of 33.8%.
The Zacks consensus forecast for quarterly revenue is pegged at $3.9 billion, representing 5.3% growth from the level of the same period last year. ITW expects fourth quarter earnings to average 4.2%.
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