April 24, 2013 / 11:36 AM / 5 years ago

CORRECTED-UPDATE 2-Rockwell Automation cuts sales forecast on sluggish demand

(Corrects 3rd bullet point to say Rockwell cut its FY13 revenue forecast, not raised it. The error also appeared in an earlier version)

* Second-quarter adj earnings $1.33/share vs est $1.29

* Revenue $1.52 bln vs est $1.59 bln

* Cuts FY13 revenue forecast to $6.25 bln-$6.45 bln

By Sagarika Jaisinghani

April 24 (Reuters) - Rockwell Automation Inc reported a drop in second-quarter revenue and cut its sales forecast for the full year as it expects global industrial demand to remain sluggish.

Rockwell, which makes systems that help factories run more smoothly, said it expects sales of $6.25 billion to $6.45 billion for fiscal 2013 ending Sept. 30, below its prior forecast of $6.35 billion to $6.65 billion.

Sales growth at Rockwell and its peers slowed in 2012 as big industrial customers, particularly those in Europe and China, cut capital spending.

While demand in North America has begun to pick up in 2013, it has not been enough to offset declines in the rest of the world.

U.S. chief executives’ confidence in the country’s economy rebounded in the first three months of 2013, and about 38 percent plan to boost capital spending in the next six months, according to a survey released last month.

“Whether or not there is a second half recovery remains to be seen,” Longbow Research analyst Mark Douglass said. “A lot of industrial companies seem to be talking about that but there’s been very little evidence that it is coming.”

Rockwell said U.S. sales rose 2.5 percent to $776.9 million in the quarter, but sales in Europe, the Middle East and Africa fell 5 percent to $317.1 million. Revenue from Asia Pacific dropped 19 percent.

Rival Emerson Electric Co also said in March that weakness in European demand had persisted longer than expected, adding that orders for industrial goods remained under pressure.

Milwaukee-based Rockwell, which is looking for ways to cut operating costs, reiterated its profit growth forecast of 5 percent for 2013.

Total second-quarter sales fell 2.5 percent to $1.52 billion.

Net income rose to $175.9 million, or $1.24 per share, from $167.8 million, or $1.16 per share, a year earlier.

Excluding items Rockwell, earned $1.33 per share.

Analysts on average expected earnings of $1.29 per share, excluding items, for the second quarter on revenue of $1.59 billion, according to Thomson Reuters I/B/E/S.

Rockwell shares have gained 11 percent in the past 12 months, but have underperformed the wider S&P 500 index, which gained 15 percent. The company’s shares closed at $85.04 on the New York Stock Exchange on Tuesday. (Editing by Roshni Menon)

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