MILWAUKEE - Rockwell Automation, Inc. (NYSE: ROK) today reported first quarter fiscal 2023 results.

'Our strong execution and continued focus on supply chain resiliency helped Rockwell exceed our expectations in the quarter, with earnings growing double digits year over year. In addition to a gradually improving supply chain environment, we are encouraged by the continued strength of our customers' demand across all business segments and regions,' said Blake Moret, Chairman and CEO.

Fiscal Q1 2023 Financial Results

Fiscal 2023 first quarter sales were $1,981 million, up 6.7% from $1,857 million in the first quarter of fiscal 2022. Organic sales increased 9.9%, currency translation decreased sales by 4.0%, and acquisitions increased sales by 0.8%.

Fiscal 2023 first quarter Net income attributable to Rockwell Automation was $384 million or $3.31 per share, compared to $242 million or $2.05 per share in the first quarter of fiscal 2022. The increases in Net income attributable to Rockwell Automation and diluted EPS are primarily due to fair value adjustments recognized in fiscal 2023 and fiscal 2022 in connection with our investment in PTC (the 'PTC adjustments'). Fiscal 2023 first quarter adjusted EPS was $2.46, up 15% compared to $2.14 in the first quarter of fiscal 2022 primarily due to higher sales, partially offset by higher input costs.

Pre-tax margin was 23.6% in the first quarter of fiscal 2023 compared to 15.2% in the same period last year. The increase in pre-tax margin was primarily due to the PTC adjustments.

Total segment operating earnings were $401 million in the first quarter of fiscal 2023, up 12.9% from $355 million in the same period of fiscal 2022. Total segment operating margin was 20.2% compared to 19.1% a year ago primarily due to positive price/cost and higher sales volume partially offset by higher investment spend.

Cash flow generated by operating activities in the first quarter of fiscal 2023 was $66.3 million, compared to $(12.0) million in the first quarter of fiscal 2022. Free cash flow in the first quarter of fiscal 2023 was $42.1 million, compared to $(49.1) million in the same period last year. Increases in cash flow provided by operating activities and free cash flow were primarily driven by higher pre-tax income.

Intelligent Devices

Intelligent Devices first quarter fiscal 2023 sales were $936 million, an increase of 4.0% compared to $900 million in the same period last year. Organic sales increased 6.6%, currency translation decreased sales by 4.1%, and the acquisition of CUBIC increased sales by 1.5%. Segment operating earnings were $209 million compared to $213 million in the same period last year. Segment operating margin decreased to 22.4% from 23.7% a year ago. The decrease from prior year includes higher investment spend, and an unfavorable currency impact, partially offset by the positive impact from higher price/cost.

Software & Control

Software & Control first quarter fiscal 2023 sales were $573 million, an increase of 11.6% compared to $514 million in the same period last year. Organic sales increased 15.5% and currency translation decreased sales by 3.9%. Segment operating earnings were $167 million compared to $118 million in the same period last year. Segment operating margin increased to 29.2% from 22.9% a year ago, driven by positive price/cost, the favorable year-over-year impact of Plex, and higher sales.

Lifecycle Services

Lifecycle Services first quarter fiscal 2023 sales were $472 million, an increase of 6.4% compared to $443 million in the same period last year. Organic sales increased 10.2%, currency translation decreased sales by 4.2%, and acquisitions increased sales by 0.4%. Segment operating earnings were $24.3 million compared to $24.5 million in the same period last year. Segment operating margin decreased to 5.2% from 5.5% a year ago.

Supplemental Information

ARR - Organic ARR grew 14% compared to the end of the first quarter of fiscal 2022.

Corporate and other - Fiscal 2023 first quarter Corporate and other expense was $27.3 million compared to $29.4 million in the first quarter of fiscal 2022.

Purchase accounting depreciation and amortization - Fiscal 2023 first quarter Purchase accounting depreciation and amortization expense was $26.0 million, down $0.1 million from the first quarter of fiscal 2022.

Tax - On a GAAP basis, the effective tax rate in the first quarter of fiscal 2023 was 19.1% compared to 15.4% in the first quarter of fiscal 2022. The adjusted effective tax rate for the first quarter of fiscal 2023 was 17.1% compared to 15.3% in the prior year.

Share repurchases - During the first quarter of fiscal 2023, the Company repurchased approximately 0.6 million shares of its common stock at a cost of $156 million. At December 31, 2022, $1.1 billion remained available under our existing share repurchase authorization.

Return on Invested Capital (ROIC) - ROIC was 16.8% for the twelve months ended December 31, 2022 compared to 20.6% for the twelve months ended December 31, 2021. The decrease is driven by higher invested capital and discrete one-time tax benefits in the prior year partially offset by higher pre-tax income.

Non-GAAP Measures

Organic sales, total segment operating earnings, total segment operating margin, adjusted income, adjusted EPS, adjusted effective tax rate, free cash flow, free cash flow conversion, and ROIC are non-GAAP measures that are reconciled to GAAP measures in the attachments to this release.

Organic ARR - Annual recurring revenue (ARR) is a key metric that enables measurement of progress in growing our recurring revenue business. It represents the annual contract value of all active recurring revenue contracts at any point in time. Recurring revenue is defined as a revenue stream that is contractual, typically for a period of 12 months or more, and has a high probability of renewal. The probability of renewal is based on historical renewal experience of the individual revenue streams, or management's best estimates if historical renewal experience is not available. Organic ARR growth is calculated as the dollar change in ARR, adjusted to exclude the effects of currency translation and acquisitions, divided by ARR as of the prior period. The effects of currency translation are excluded by calculating Organic ARR on a constant currency basis. When we acquire businesses, we exclude the effect of ARR in the current period for which there was no comparable ARR in the prior period. Organic ARR growth is also used as a financial measure of performance for our annual incentive compensation. Because ARR is based on annual contract value, it does not represent revenue recognized during a particular reporting period or revenue to be recognized in future reporting periods and is not intended to be a substitute for revenue, contract liabilities, or backlog.

Contact:

Aijana Zellner

Tel: 414.382.8510

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