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$ROK 2Q15 10-Q: Credit ratings as of March 31, 2015: Short-term rating: Standard & Poor’s A-1; Moody’s P-2 and Fitch Ratings F1. Long-term rating: Standard & Poor’s A; Moody’s A3 and Fitch Ratings A. Outlook for all the ratings will be stable. US Economic Trends: Industrial Production Index and PMI were 105.6 and 51.5, respectively.
For FY18, $ROK expects diluted EPS in the range of $3.67-3.97, while adjusted EPS is expected in the range of $7.60-7.90. On a reported basis, sales growth is anticipated in the range of 4.5-7.5%, with organic sales growth seen in the range of 3.5-6.5%.
Industrial automation and information products provider $ROK reported a loss for 1Q18, impacted by $479.7MM in charges associated with the US Tax Act. Net loss was $236.4MM or $1.84 per share vs. a profit of $214.7MM or $1.65 per share a year earlier. Revenue however surged 6.46% to $1.58Bil. On an adjusted basis $ROK earned $1.96 per share.
While $ROK expects another good year of sales and EPS growth in FY18, the company does not expect year-over-year EPS growth in 1Q18. $ROK has an unusual low tax rate and lower spending in 1Q17, and while for overall FY18 incentive compensation is a year-over-year tailwind, for Q1, it will be a modest headwind.
$ROK projects 2018 sales of about $6.7Bil, an increase of about $400MM compared to FY17. The company expects segment operating margin to be a bit below 21.5%. Excluding the impact of the sale of the business and the FY17 restructuring charges, this implies earnings conversion of about 35%.
For 4Q17, $ROK's recent acquisitions contributed 1.5 points of profitable growth and increased its technology, domain expertise and market access. During the year, $ROK added more resources to focus on acquisition and investment opportunities. $ROK continues to expect acquisitions to generate a point or more of growth each year.
$ROK expects FY18 sales growth of 5-8%, and organic sales growth of 3.5-6.5%. The company predicts EPS of $7.09-7.39 and adjusted EPS of $7.20-7.50 for FY18. $ROK sees heavy industries to grow a bit above the company average, with good contribution from oil and gas. $ROK also expects continued growth in consumer and transportation.
$ROK's total segment operating margin for 4Q17 decreased to 17% from 19.8% a year ago. The decrease was primarily due to higher investment spending, restructuring charges, and incentive compensation, partially offset by higher sales. Total segment operating income fell 7% to $283.5MM.
$ROK's pre-tax margin, which includes the gain on the divestiture, for 4Q17 increased to 16.4% from 15.4% last year. The increase was primarily due to the gain on the divestiture and higher sales, partially offset by higher investment spending, restructuring charges, and incentive compensation.
$ROK reported a rise in 4Q17 earnings driven by higher sales and the gain on the divestiture. Net income rose to $204.6MM or $1.57 per share from $185.2MM or $1.43 per share last year. Sales grew 8.4% to $1.67Bil, on positive contributions from all regions and broad-based growth across most verticals. Adjusted EPS increased 11% to $1.69.
$ROK expects transportation to be up high-teens for the full year 2017 with automotive higher than tire. Consumer will also be strong for the full year. And within that, the company expects food and beverage to be strong, and Life Sciences will continue the strong trend. $ROK expects home and personal care to be a little bit weaker.
$ROK lifted FY17 sales growth outlook to 4.5-7.5% from 1-5% and its EPS guidance to $6.06-6.36 from $5.56-5.96. $ROK raised its 2017 adjusted EPS estimate to $6.45-6.75 from $5.95-6.35. Including the impact of acquisitions and a smaller headwind from currency, the company now projects 2017 sales of about $6.25Bil at the midpoint.
$ROK's segment operating earnings for 2Q17 increased by 7% to $296MM from $277.5MM in the previous year quarter. The increases was primarily due to higher sales, partially offset by higher incentive compensation. However, segment operating margin fell to 19% from 19.3% and pre-tax margin declined to 14.8% from 15.1%.
$ROK reported a rise in 2Q17 earnings driven by higher sales and lower effective tax rates, partially offset by higher incentive compensation. Net income rose to $189.5MM or $1.45 per share from $168MM or $1.28 per share last year. Sales grew to $1.55Bil from $1.44Bil. Adjusted EPS increased to $1.55 from $1.37.