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What's in Store for Rockwell Automation (ROK) Q1 Earnings?

Zacks Equity Research
Updated

Rockwell Automation Inc. ROK is scheduled to report first-quarter fiscal 2018 results before the market opens on Jan 24.

In the last quarter, Rockwell Automation posted earnings of $1.69 per share, missing the Zacks Consensus Estimate. However, the company’s earnings have surpassed estimates in three out of the trailing four quarters, recording an average positive earnings surprise of 9.08%.

Let’s see how things are shaping up for this announcement.

Rockwell Automation, Inc. Price and EPS Surprise

 

Rockwell Automation, Inc. Price and EPS Surprise | Rockwell Automation, Inc. Quote

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Key Factors to Consider

Rockwell Automation witnessed strong order activity in fourth-quarter fiscal 2017 which instils optimism for the fiscal first-quarter results. Additionally, improving global macroeconomic conditions and industrial production remain tailwinds. However, the company does not expect year-over-year EPS growth in the fiscal first quarter as incentive compensation remains a headwind. In addition, restructuring costs as well as elevated input costs might hinder the company’s quarterly performance.

The company will, however, benefit from its restructuring actions initiated in fiscal 2017. These actions will support the company’s efforts to focus on the Connected Enterprise (CE) strategy, and enhance competitiveness of its products, services and solutions.

Rockwell Automation expects its Architecture & Software and Control Products & Solutions segments to be impacted by restructuring charges in the fiscal first quarter. The Zacks Consensus Estimate for the Architecture & Software segment’s net sales is pegged at $752 million. The estimate for the Control Products & Solutions segment’s sales is pegged at $844 million.

Over the last 30 days, the Zacks Consensus Estimate for the fiscal first-quarter’s earnings remained unchanged at $1.73. Shares of the company have appreciated around 46.5% over the past year underperforming growth of 46.7% recorded by the industry.



Earnings Whispers

Our proven model shows that Rockwell Automation is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen.

Zacks ESP: The Earnings ESP for Rockwell Automation is +0.73%. This is because the Most Accurate estimate of $1.75 comes in higher than the Zacks Consensus Estimate of $1.73.  A favorable Earnings ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Rockwell Automation currently carries a Zacks Rank #3. It should be noted that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings.

Conversely, stocks with a Zacks Rank #4 or 5 (Sell rated) should never be considered going into an earnings announcement.

The combination of Rockwell Automation’s Zacks Rank #3 and Earnings ESP of +0.73% makes us confident of a likely earnings beat.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

iRobot Corporation IRBT, with an Earnings ESP of +17.65% and a Zacks Rank #1. Its shares have gained 1.5%, over the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.

Deere & Company DE, with an Earnings ESP of +5.64% and a Zacks Rank #1. The company’s shares have been up 33.7% during the same time frame.

Briggs & Stratton Corporation BGG, with an Earnings ESP of +10.29% and a Zacks Rank #1. The stock has gained 10.1% in six months’ time.

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Rockwell Automation, Inc. (ROK) : Free Stock Analysis Report
 
iRobot Corporation (IRBT) : Free Stock Analysis Report
 
Deere & Company (DE) : Free Stock Analysis Report
 
Briggs & Stratton Corporation (BGG) : Free Stock Analysis Report
 
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Zacks Investment Research