* Q2 EPS $1.14 vs Street view $1.12
* Sees 2011 EPS $4.40 to $4.60 vs. $4.54 expected
* Warns of Q4, 2012 supply chain risk from Japan crisis
* Shares down 11 pct
(Rewrites first paragraph, adds CEO and analyst comments,
updates stock price)
NEW YORK, April 27 Rockwell Automation Inc's
(ROK.N) outlook disappointed Wall Street amid supply chain
concerns after the earthquake and tsunami in Japan, sending the
company's shares down 11 percent.
The maker of factory efficiency systems raised the bottom
of its 2011 profit estimate but kept the top of the range
unchanged for the first time in six quarters.
The earthquake in Japan could affect Rockwell's supply
chain and the cost of commodities including copper, steel and
rare earth materials are rising faster than expected, the
company said. That is prompting central banks to raise rates to
quell inflation, raising questions about future economic
"The reason we did not raise (guidance) is some of these
uncertainties," Chief Executive Keith Nosbusch said in an
"There's no question we're in a strong industrial
environment but we're in a very difficult macroeconomic
environment. We're just not sure which way that is going to
play out, and thought staying where we were was the best
Rockwell said it was concerned about its second- and
third-tier Japanese suppliers' ability to ramp up production of
materials like resins and films that go into the electronics
Rockwell sells to customers.
Some goods are concentrated in Japan and are produced in
places affected by the nuclear crisis that followed last
month's quake and tsunami. The company has adequate inventory
for the third quarter, but supply chain shortfalls could become
a factor in the following quatrer and its 2012 fiscal year.
Rockwell's forecast overshadowed a better-than-expected
quarterly profit report.
Rockwell shares were down 11 percent at $87.06 on Wednesday
morning, erasing about $1.5 billion from its market
capitalization. They had risen 36 percent this year,
outperforming both industrial peers and the broader market.
"Valuation was getting stretched," Nomura analyst Shannon
O'Callaghan said. "(Rockwell) needed a strong beat and raise
this quarter more than any other company in our sector."
Net earnings rose to $166.4 million, or $1.14 per share, in
the fiscal second quarter ended March 31, from $137 million, or
95 cents per share, a year earlier.
Analysts on average expected $1.12 per share, according to
Thomson Reuters I/B/E/S.
Sales rose 26 percent to $1.46 billion, above a Wall Street
forecast of $1.41 billion.
Milwaukee-based Rockwell has benefited as manufacturers,
who slashed capital spending budgets during the recession, have
resumed investing in systems that reduce operating costs.
Rockwell, whose rivals include Emerson Electric Co (EMR.N),
Germany's Siemens AG (SIEGn.DE) and Japan's Mitsubishi Electric
Corp (6503.T), raised the bottom of its 2011 earnings forecast
by 10 cents to $4.40 a share. The top of the range remains
At its midpoint, the forecast is below analysts' average
estimate of $4.54.
(Reporting by Nick Zieminski; Editing by John Wallace, Matthew
Lewis, Dave Zimmerman)