Rockwell Automation, Inc. reported fiscal 2022 fourth quarter and full year results and introduced fiscal 2023 guidance.
"We had a great finish to this fiscal year, with our Q4 organic sales and earnings both growing double digits year over year and sequentially. Rockwell delivered very strong operating performance amidst continued supply chain volatility, significant inflation, and currency headwinds. Our strong orders and sales performance in fiscal 2022 reflect the compelling value we provide to our customers across many industries and regions,” said Blake Moret, Chairman and CEO.
Fiscal Q4 2022 Financial Results
Fiscal 2022 fourth quarter sales were $2,126 million, up 17.6% compared to $1,808 million in the fourth quarter of fiscal 2021. Organic sales increased 20.5%, currency translation decreased sales by 4.8%, and acquisitions increased sales by 1.9%.
Fiscal 2022 fourth quarter net income attributable to Rockwell Automation was $339 million or $2.91 per share, compared to $78.5 million or $0.67 per share in the fourth quarter of fiscal 2021. The increases in net income attributable to Rockwell Automation and EPS were primarily due to fair value adjustments recognized in the fourth quarter of fiscal 2021 in connection with our investment in PTC (the "fourth quarter PTC adjustment"). Fiscal 2022 fourth quarter Adjusted EPS was $3.04, up 30.5% compared to $2.33 in the fourth quarter of fiscal 2021, primarily due to higher sales, partially offset by a higher tax rate and unfavorable currency impact.
Pre-tax margin was 19.1% in the fourth quarter of fiscal 2022 compared to 0.2% in the same period last year. The increase in pre-tax margin was primarily due to the fourth quarter PTC adjustment.
Total segment operating earnings were $495 million in the fourth quarter of fiscal 2022, up 53.1% compared to $323 million in the same period of fiscal 2021. Total segment operating margin was 23.3% in the fourth quarter compared to 17.9% a year ago. The increase in segment operating margin was primarily due to higher sales and positive price/cost, partially offset by unfavorable currency impact.
Cash flow provided by operating activities in the fourth quarter of fiscal 2022 was $399 million, compared to $204 million in the fourth quarter of fiscal 2021. Free cash flow was $359 million compared to $160 million in the fourth quarter of fiscal 2021. Increases in cash flow provided by operating activities and free cash flow were primarily due to higher pre-tax income.
Fiscal 2022 Full Year Financial Results
Sales were $7,760 million in fiscal 2022, up 10.9% from $6,997 million in fiscal 2021. Organic sales increased 11.3%, currency translation decreased sales by 2.7%, and acquisitions increased sales by 2.3%.
Fiscal 2022 net income attributable to Rockwell Automation was $932 million or $7.97 per share, compared to $1,358 million or $11.58 per share in fiscal 2021. The decreases in net income attributable to Rockwell Automation and EPS were primarily due to fair value adjustments recognized in fiscal 2022 and fiscal 2021 in connection with our investment in PTC (the "full year PTC adjustments"). Fiscal 2022 Adjusted EPS was $9.49, up 0.6% compared to $9.43 in fiscal 2021. The increase in Adjusted EPS was primarily due to higher sales and lower incentive compensation, partially offset by higher investment spend, higher tax rate, and a prior year favorable legal settlement.
Pre-tax margin was 13.8% in fiscal 2022, compared to 21.8% last year. The decrease in pre-tax margin was primarily due to the full year PTC adjustments.
Total segment operating earnings were $1,543 million in fiscal 2022, up 10.9% from $1,391 million in fiscal 2021. Total segment operating margin was 19.9% compared to 19.9% a year ago. The positive impact from higher sales and lower incentive compensation was offset by higher investment spend and negative price/cost.
Cash flow provided by operating activities in fiscal year 2022 was $823 million, compared to $1,261 million in fiscal 2021. Free cash flow was $682 million compared to $1,141 million last year. Decreases in cash flow provided by operating activities and free cash flow were driven by higher working capital and the timing of bonus payments.
Outlook
The table below provides guidance for sales growth and earnings per share for fiscal 2023. Our guidance reflects record backlog and assumes continued supply chain stabilization.
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Sales Growth Guidance |
EPS Guidance |
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Reported sales growth |
7.5% - 11.5% |
Diluted EPS |
$9.54 - $10.34 |
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Organic sales growth (1) |
9.0% - 13.0% |
Adjusted EPS (1) |
$10.20 - $11.00 |
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Inorganic sales growth |
~ 1.0% |
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Currency translation |
~ (2.5)% |
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(1) Organic sales growth and Adjusted EPS are non-GAAP measures. See Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate Reconciliation for more information on these non-GAAP measures. |
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Note: Guidance includes estimated impact of CUBIC acquisition in fiscal year 2023. |
“As we look to 2023, we are confident in our ability to execute our strategy. Our record backlog, underlying customer demand, and a more resilient operating model position us well for another year of profitable double-digit growth. I’m proud of how our teams have navigated this challenging year. Now more than ever, Rockwell is committed to investing in attracting and retaining key talent. It’s the people who bring our strategy to life by supporting the immediate needs of our customers while focusing on continued innovation and investments for the future,” Moret continued.
Following is a discussion of quarter and full year results for our business segments.
Intelligent Devices
Intelligent Devices fiscal 2022 fourth quarter sales were $957 million, an increase of 11.7% compared to $857 million in the same period last year. Organic sales increased 16.3% and currency translation decreased sales by 4.6%. Segment operating earnings were $213 million in the fourth quarter of fiscal 2022 compared to $166 million in the same period last year. Segment operating margin increased to 22.3% in the fourth quarter of fiscal 2022 from 19.4% a year ago, primarily due to higher sales and positive price/cost, partially offset by unfavorable currency impact.
Intelligent Devices fiscal 2022 sales were $3,545 million, an increase of 7.0% from $3,312 million last year. Organic sales increased 9.7% and currency translation decreased sales by 2.7%. Segment operating earnings were $718 million in fiscal 2022 compared to $702 million in fiscal 2021. Segment operating margin decreased to 20.2% in fiscal 2022 from 21.2% a year ago, primarily due to negative price/cost and higher investment spend partially offset by higher sales and lower incentive compensation.
Software & Control
Software & Control fiscal 2022 fourth quarter sales were $657 million, an increase of 33.0% compared to $494 million in the same period last year. Organic sales increased 32.2%, currency translation decreased sales by 5.3%, and acquisitions increased sales by 6.1%. Segment operating earnings were $227 million in the fourth quarter of fiscal 2022 compared to $120 million in the same period last year. Segment operating margin increased to 34.5% in the fourth quarter of fiscal 2022 from 24.2% a year ago, primarily related to higher sales and positive price/cost, partially offset by unfavorable currency impact.
Software & Control fiscal 2022 sales were $2,313 million, an increase of 18.8% from $1,947 million last year. Organic sales increased 13.8%, currency translation decreased sales by 2.7%, and acquisitions increased sales by 7.7%. Segment operating earnings were $667 million in fiscal 2022 compared to $531 million in fiscal 2021. Segment operating margin increased to 28.8% in fiscal 2022 from 27.3% a year ago, primarily due to higher sales and lower incentive compensation, partially offset by higher investment spend and the impact of acquisitions.
Lifecycle Services
Lifecycle Services fiscal 2022 fourth quarter sales were $512 million, an increase of 12.1% compared to $457 million in the same period last year. Organic sales increased 15.8%, currency translation decreased sales by 4.6%, and acquisitions increased sales by 0.9%. Segment operating earnings were $54.7 million in the fourth quarter of fiscal 2022 compared to $37.1 million in the same period last year. Segment operating margin increased to 10.7% in the fourth quarter of fiscal 2022 from 8.1% a year ago, primarily due to higher sales.
Lifecycle Services fiscal 2022 sales were $1,903 million, an increase of 9.5% from $1,739 million last year. Organic sales increased 11.4%, currency translation decreased sales by 2.5%, and acquisitions increased sales by 0.6%. Segment operating earnings were $158 million in fiscal 2022 compared to $158 million in fiscal 2021. Segment operating margin decreased to 8.3% in fiscal 2022 from 9.1% a year ago, primarily due to supply chain constraints and higher investment spend, partially offset by higher sales and lower incentive compensation.
