3
Following is a discussion of fourth quarter results for each of the segments.
Architecture & Software Architecture & Software fourth quarter sales were $569.5 million, an increase of 8 percent compared to $526.6 million in the fourth quarter of 2006. Foreign currency translation added 3 percentage points to the growth rate. Segment operating earnings were $145.3 million compared to $126.7 million in the fourth quarter of 2006. Architecture & Software segment operating margin was 25.5 percent in the fourth quarter of 2007 compared to 24.1 percent in 2006.
Control Products & Solutions Control Products & Solutions fourth quarter sales were $801.0 million, an increase of 20 percent compared to sales of $667.4 million in the fourth quarter of 2006. Foreign currency translation and acquisitions added 9 percentage points to the growth rate. Segment operating earnings were $129.9 million compared to $101.2 million in the fourth quarter of 2006. Control Products & Solutions segment operating margin was 16.2 percent in the fourth quarter of 2007 compared to 15.2 percent in 2006.
General Corporate – Net Fourth quarter general corporate expenses were $22.2 million compared to $23.2 million in the fourth quarter of 2006. General corporate expenses for the full year were $72.8 million compared to $90.7 million in 2006. The decrease is primarily due to interest income on the proceeds from the Power Systems sale in 2007.
4
Income Taxes The effective tax rate for the fourth quarter of 2007 was 29.2 percent. The effective tax rate for the fourth quarter of 2006 was 24.3 percent. The effective tax rate for the full year was 27.8 percent compared to 28.1 percent in 2006. In 2008, the Company expects the full year tax rate to be in a range of 28 to 29%, subject to quarterly variability.
Discontinued Operations Income from discontinued operations in the fourth quarter of 2007 primarily relates to a tax gain associated with the divestiture of our former Power Systems business. Income from discontinued operations in the fourth quarter of 2006 primarily represents the results of operations of the former Power Systems business.
Share Repurchase and Debt During the quarter, the Company repurchased 3.7 million shares at a cost of $257.8 million. The Company had $26.3 million available at September 30, 2007 under its existing $1.0 billion share repurchase authorization. On November 7, 2007, Rockwell Automation’s Board of Directors authorized the Company to repurchase up to an additional $1.0 billion worth of shares of our common stock. In addition, the Board of Directors authorized the Company to issue up to $500 million of long-term debt. The proceeds of this debt, if issued, primarily would be used to reduce outstanding debt, including retiring $350 million of notes due in January 2008.
5
Conference Call A conference call to discuss our financial results will take place at 8:30 A.M. Eastern Time on November 8. The call will be webcast and accessible via the Rockwell Automation website (www.rockwellautomation.com).
This news release contains statements (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Words such as “believe”, “estimate”, “expect”, “project”, “plan”, “anticipate”, “will”, “intend” and other similar expressions may identify forward- looking statements. Actual results may differ materially from those projected as a result of certain risks and uncertainties, many of which are beyond our control, including but not limited to: |