Rockwell Automation Inc. (NYSE:ROK) Q1 2018 Earnings Conference Call - Final Transcript
Jan 24, 2018 • 08:30 am ET
Richard Eastman, Robert W. Baird.
Blake, could you kind of maybe elaborate, if you would, on maybe the abrupt deceleration on the expectations around the Transportation, if you could just speak to maybe whether it's geographically or other?
Yeah. I mean, I don't think we would call it isolated to a single geography. Although we certainly saw weaker than expected performance in the US, it's not purely projects, some of which have been pushed out. It's also the MRO spend. We have a very large installed base and so that's a significant portion of our Automotive business in any given quarter. We continue to see new program commitments, particularly in EV. And you've seen some of the news from some of the big brand owners about their large investments in that area. But it's hard to predict the timing of whether some of the business that we're already tracking will come in, in 2018 or push out to 2019. So I would call it, mixed results, but it's -- it includes some MRO as well as program softness.
And then just as a follow-up question. Patrick, could you just kind of speak to -- you had mentioned in the segment profit commentary that investments in the first quarter came in a little bit light of expectations, could you just perhaps maybe put a number on the shortfall there to plan? And then also does that come back in the second quarter and actually increase a bit with your commentary around more cash flow, more flexibility on investments?
Rick, it was a few pennies of EPS. And our assumption is that some of that will come back in the balance of the year.
Josh Pokrzywinski, Wolfe Research. And Josh your line is open. Andrew Kaplowitz, Citigroup.
This is Vlad Bystricky on for Andy. So you highlighted growth led by Heavy Industries, including oil and gas. So can you talk about, within oil and gas, how that market is evolving, whether you're seeing larger projects start to come back in oil and gas specifically and then more broadly in Heavy Industry, whether you're seeing accelerated large project activity?
Yeah. So in oil and gas, the strength and growth is a mix of what we might characterize as more flow business as well as some large projects starting to hit. So I think we are seeing that across segment profile of the various types of business. There are other parts of Heavy Industries that are also strengthening. So we're seeing it in metals, for instance. Pulp and paper in several industries. We include semiconductor in Heavy and that continues to be at high levels of spending.
And then can you maybe just give us a little more color on orders during the quarter? Did you generally see a continuation of, I think, you talked about high single-digit order growth in 4Q? And did you see any change in order trajectory as the quarter progressed?
We saw a little bit of softness at the very