Rockwell Automation Inc. (NYSE:ROK) is set to release its fourth-quarter fiscal 2023 results on November 2 before the opening of the market.
Q3 Performance
In the previous quarter, Rockwell Automation saw year-over-year improvements in both earnings and revenues. However, the company’s results fell short of the Zacks Consensus Estimate.
It’s worth noting that the company has consistently beaten earnings estimates in the last four quarters, with an average surprise of 12.1%.
Q4 Estimates
For the fiscal fourth quarter, the Zacks Consensus Estimate for revenues is $2.4 billion, suggesting a 14.7% increase compared to the actual figures from the previous year. Earnings are estimated at $3.49 per share, indicating a 14.8% rise from the year-ago quarter’s reported earnings.
Factors to Consider
Rockwell Automation has experienced an uptick in order levels in recent quarters, with low order cancellation rates indicating strong demand from customers in various industries and regions. Investments in different end markets and advancements in automation and digital transformation are expected to have driven order levels across all segments.
While material shortages and production delays have impacted the company’s performance in previous quarters, recent improvements in the supply chain are likely to have positively influenced fourth-quarter results. Higher logistics costs due to increased energy expenses and limited air freight lanes may have affected margins.
Despite higher product development spending, the company’s price increase actions are expected to help mitigate the effects of inflation and contribute to margin expansion.
Segment Expectations
In the Intelligent Devices segment, revenues for the fourth quarter of fiscal 2023 are expected to increase by 15.4% year over year to $1,105 million. The operating profit for this segment is estimated at $228 million, marking a 6.9% year-over-year increase.
For the Software & Control segment, sales are projected to reach $744 million, a 13.3% increase from the previous year’s actual. The operating profit for this segment is expected to be $271 million, a 19.5% increase from the year-ago quarter’s reported figure.
The Lifecycle Services segment is expected to report sales of $556 million, an 8.5% growth from the previous year’s numbers. The operating profit for this segment is anticipated to be $60 million, reflecting a 10.2% decrease from the year-ago quarter’s reported figure.
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