Rockwell Automation eases China's weakness as sales rise

Rockwell Automation on Tuesday lowered its revenue forecast for the full year due to the uncertainty of trade. In the first quarter, the group's results were better than expected, reflecting China's resistance and sales growth in North America.

The company, which supplies factory machinery and software, is now forecasting sales growth of 2.2% to 5.2% for fiscal 2019, down from previous expectations of 2.7% at 5.7%. Rockwell also lowered its earnings estimates from $ 7.33 to $ 7.73. He previously expected between $ 8.92 and $ 9.32 per share.

Earnings per share EPS of $ 8.85 to $ 9.25, as well as organic sales growth, are unchanged.

"We are seeing continuing uncertainty due to trade tensions and geopolitical risks," said CEO Blake Moret in a statement. "However, forecasts continue to call for growth in industrial production."

Mr. Moret added that Rockwell had a "good" first quarter, as its backlog was increasing and the project listing activity was strong.

Some manufacturers have warned that China's weakness is weighing on sales, fueling worries about the world's second-largest economy, as well as the profits of US companies, which may suffer from a protracted trade dispute. More recently, Caterpillar and Nvidia have denied forecasts on Wall Street, citing weaker results in China.

For Rockwell, Chinese sales increased by 1 to 5% in the quarter ending December 31, and sales in Asia grew 4%. Mr Moret, speaking during a call for results, said that the manufacturers of public transport vehicles and electric vehicles contributed to the strength of sales in China.

He also said that despite moderate activity in China, the Europe, Middle East and Africa segment is on track to record record sales growth, with a figure below 10% for fiscal year 2019. .

North America and Latin America also contributed to Rockwell's first-quarter sales growth, with total revenues up 3.5% to $ 1.64 billion. This figure was slightly higher than a consensus estimate of $ 1.63 billion, according to a Refinitiv poll.

Rockwell, based in Milwaukee, reported net earnings of $ 80.3 million, or 66 cents per share. In the same quarter last year, the company recorded a loss of $ 236.4 million, or $ 1.84 per share, partly due to US tax reform charges. On an adjusted basis, earnings per share increased from $ 1.96 to $ 2.21. Analysts were looking for a profit of $ 1.99 per share.

Investors applauded the results of the first quarter, raising shares from $ 172.37 to 5.4.3% in recent transactions.