Rockwell Auto sets 5 percent 2013 profit growth target
(Reuters) - Rockwell Automation Inc (ROK.N), which makes systems that help factories run more smoothly, set a fiscal 2013 profit target that calls for roughly 5 percent growth in the face of a slowing global economy.
The company said on Monday demand for its products had weakened in the final months of fiscal 2012, which ended September 30, as customers delayed purchases of its products. Rockwell said it would continue to look for ways to cut its operating costs.
Rockwell also reported fourth-quarter earnings that topped analysts' expectations and its shares rose 2 percent.
"Growth rates moderated considerably as we moved through fiscal '12, and our current underlying demand trends are flat," said Chief Executive Officer Keith Nosbusch. "There is not a lot of positive momentum as we enter the new year. Each region has its own story, but the global economic recovery seems to have run out of steam at the moment."
Nosbusch noted that it was unclear whether customers delaying orders would lead to cancellations.
"It is a warning side," he said in an interview. "Are delays going to just mean the project is going to be funded and given the go-ahead in the future or does it ultimately lead to cancellation? That's the uncertainty that exists."
For the new fiscal year, the Milwaukee-based company said it expected a profit of $5.35 to $5.75 per share, excluding certain items. The midpoint of the company's outlook is about 5 percent higher than the $5.29 a share reported for fiscal 2012.
"The combination of strong quarterly results and guidance slightly above consensus ... is more constructive than we expected given broader macro uncertainty," Bernstein Research analyst Steven Winoker, said in a note to clients.
Rockwell shares rose $1.65 to $77.16 on the New York Stock Exchange.
Rockwell forecast sales of $6.35 billion to $6.65 billion for the year, for growth of 1 percent to 5 percent. Analysts forecast $6.47 billion.
Growth will be stronger in the second half of the fiscal year, the company said.
Rockwell said it had earned $195.2 million, or $1.38 per share, in the fourth quarter ended September 30, down from $201.8 million, or $1.39 per share, a year earlier.
Analysts on average had expected a profit of $1.32 per share.
Revenue rose 1 percent to $1.66 billion, also ahead of Wall Street forecasts.
Rockwell's rivals include Emerson Electric Co (EMR.N), Germany's Siemens AG (SIEGn.DE) and Japan's Mitsubishi Electric Corp (6503.T). Emerson is scheduled to report results on Tuesday. (Reporting by Nick Zieminski in New York and Scott Malone in Boston; Editing by Lisa Von Ahn and Grant McCool)