(Reuters) - Rockwell Automation Inc (ROK.N) reported a steeper-than-expected 12 percent drop in quarterly profit on weak demand, particularly in China, for its systems that help factories run more smoothly.
The U.S. manufacturer said on Wednesday that its sales had fallen 9 percent in Asia, excluding the effects of exchange-rate fluctuations, as some industrial customers decided to delay new investments in equipment.
“In China, continued soft economic growth, lack of credit availability and project delays all impacted sales,” Chief Executive Officer Keith Nosbusch said on a conference call with analysts.
Earnings fell to $161.4 million, or $1.14 per share, in the first quarter ended on December 31 from $183.3 million, or $1.27 per share, a year earlier.
Factoring out pension expenses, the profit came to $1.23 per share, below the analysts’ average target of $1.27, according to Thomson Reuters I/B/E/S.
Revenue rose 1 percent to $1.49 billion from $1.47 billion.
The Milwaukee-based company did not change its full-year profit forecast from November that called for earnings of $5.35 to $5.75 per share, a roughly 5 percent rise.
Shares of Rockwell Automation were up 0.4 percent at $90.29 in early trading on the New York Stock Exchange.
Factoring out the effects of exchange-rate fluctuations and acquisitions, sales in Europe, the Middle East and Africa, as well as Canada, were down 2 percent. Sales were up 6 percent in the United States and rose 7 percent in Latin America.
Profit margins were somewhat weaker than expected, but reflected in part a very low rate of investment in the prior-year quarter, said Robert W. Baird & Co senior analyst Richard Eastman, who covers the company.
“When volume is up 1 percent, that doesn’t give you a lot of room to make up any inflation within the core business,” Eastman said.
As of Tuesday's close, Rockwell shares had risen about 17 percent over the past year, outperforming a 15 percent rise of the Standard & Poor's 500 index .SPX.
Editing by Lisa Von Ahn and Jeffrey Benkoe