Rockwell Automation Inc. Common Reports Operating Results (10-K)
Rockwell Automation Corp. has a market cap of $10.69 billion; its shares were traded at around $74.63 with a P/E ratio of 15.58 and P/S ratio of 1.78. The dividend yield of Rockwell Automation Corp. stocks is 2.28%. Rockwell Automation Corp. had an annual average earning growth of 13.8% over the past 10 years.
Highlight of Business Operations:Control Products & Solutions segment operating earnings were $368.5 million in 2011, up 52 percent from $241.8 million in the same period of 2010. Operating margin increased 2.0 points to 10.8 percent in 2011 as compared to 2010. The increase was predominantly due to volume increases, partially offset by sales mix and increased spending to support growth.
General corporate expenses were $93.6 million in 2010 compared to $80.3 million in 2009. The increase was primarily due to higher employee costs resulting from wage and salary increases as well as performance-based compensation. Selling, general and administrative expense as a percentage of sales decreased by 0.9 points to 27.2 percent as volume increases outpaced spending increases.
Control Products & Solutions sales increased 5 percent to $2,742.0 million in 2010 compared to $2,609.0 million in 2009. Organic sales increased 2 percent, and the effects of currency translation and acquisitions contributed 2 percentage points and 1 percentage point, respectively. The segments modest organic sales growth was primarily attributable to robust growth in the products businesses in 2010 offset by declines in solutions and services sales reflecting the decline in order rates that we experienced in the second half of 2009. While the decline in order rates led to significant sales declines in the first half of 2010, order rates recovered and after the normal lag associated with our solution and services sales, we began to see revenue increases in these businesses in the second half of 2010. Asia-Pacific and Canada both reported double-digit year-over-year overall segment growth, benefiting $2.7 million and $12.2 million, respectively, from recent acquisitions. EMEA reported year-over-year overall segment sales declines during 2010, while sales in the United States and Latin America increased consistent with the segment average. The impact of pricing on the segments sales increase was insignificant.
Free cash flow was a source of $561.7 million for the year ended September 30, 2011 compared to a source of $410.7 million for the year ended September 30, 2010. Free cash flow for both 2011 and 2010 include discretionary pre-tax contributions of $150 million to the companys U.S. pension trust. The increase in free cash flow is primarily due to improvements in current year earnings, partially offset by higher compensation payments in 2011 compared to 2010. Incentive compensation payments were lower than normal in 2010 as difficult economic conditions resulted in reduced or zero earned incentives for 2009 in most of our employee incentive compensation plans. Incentive compensation payments generally occur in the first quarter of the year following the year in which the incentive is earned. We paid substantially all of the incentive compensation earned for 2010 performance in the first quarter of 2011, and will pay substantially all of the incentive compensation earned for 2011 in the first quarter of 2012.
We recorded a valuation allowance for a portion of our deferred tax assets related to net operating loss, tax credit, and capital loss carryforwards (Carryforwards) and certain temporary differences in the amount of $32.8 million at September 30, 2011 and $26.7 million at September 30, 2010 based on the projected profitability of the entity in the respective tax jurisdiction. The valuation allowance is based on an evaluation of the uncertainty that the Carryforwards and certain temporary differences will be realized. Our income would increase if we determine we will be able to use more Carryforwards or certain temporary differences than currently expected.
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