ROK - Earnings call transcript Q3 2019 | Rockwell Automation, Inc.

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Operator

Thank you for holding and welcome to the Rockwell Automation's Quarterly Conference Call. I need to remind everyone that today's call is being recorded. Later in the call, we will open up the line for questions. [Operator Instructions]

At this time, I would like to turn the call over to Jessica Kourakos, Head of Investor Relations and Treasurer. Ms. ahead. go please Kourakos

Jessica Kourakos

and thank fiscal joining call. XXXX Blake and today and CFO. Automation's With for third is CEO; Chairman our quarter earnings Moret, Goris, you morning our us for Rockwell me Patrick Good release conference

website this released of available our and to to and the Both non-GAAP replay include this reconciliations the be press for measures. Our charts earlier press that next been webcast have call the results will XX at morning were charts A posted website. release for release and days.

need get started, expected remind we company comments statements. Before our of will results statements I and the to to you forward-looking therefore related that are our include future

and may our in a Our described due detailed actual our earnings from materially release differ all filings. results that SEC uncertainties of and our are of projections risks in to wide range

that, So I'll call Blake. the with over hand to

Blake Moret

you today. us Jessica everyone. joining on and for call Thank the morning good Thanks

from Before Investor Steve I time. as and Jessica to Jessica also start, of I IR the has well Relations. duties last years. I in back role our He his Relations transitioned full served few of the thank Treasury who onboard. Etzel, brings her the both to have buy side for first experience want to new a welcome as sell side Investor and wealth excited Head want Kourakos to from we’re

shorter for markets please a expected. our me the we end up With to growth so we lower were some Globally X points markets, cycle general, end saw quarter, slide X.X% that let In deck. in sales while longer in organic cycle start key with weakened. page turn strong the than

digitization of on was growth including our and saw grew customers focusing gas, strong by productivity, we a are and which led and each double-digits. in as well oil Organic as initiatives. all paper, and Life oil In gas improvements industries Sciences, growth and sales mining as pulp heavy regions

and of Strong well quarter for us us quarter. copper, iron by Pulp most another North Life do America. in and paper around vertical growth was in with related investments this driven growth for down ore was from stand this Sciences vehicle investments electric the mining to commodities and continued digitization. coming CapEx

industry offerings and personalized align Our well including security. medicine the trends cyber

was single market. slowdown cycle in Offsetting and the quarter the semiconductor markets our cycle was by food automotive, was versus drive longer Food the with in-line was modernization semiconductor in saw down and delays. down sequentially to Automotive we the to beverage. industry in year-over-year focus beverage weaker growth in overall expected than XX% on the quarter an weakness productivity, expectations. including about slightly and Semiconductor shorter up QX project global low impacted digits, and some although end continues

was Logics weakness. well revenue cycle markets. recurring customers largely down enhance new security grew This is and delivered as and This and cyber well control sales very by double-digits quarter. organically do Information X% Process automotive due organically and a led connected longer end to continue X% the to services in from production. solutions software increases MES FactoryTalk all services as value of value the to optimized as and streams industries. measure business being to monitoring such includes remote in InnovationSuite strength high

automotive, beverage gas oil tire. and by gas organically. growth quarter, and and while Pulp semiconductor Commenting flat food and declined. had on EMEA up was Sciences, in the America about double-digit the and Life regional and performance strong in was quarter and paper X% North led oil

oil X%, While by grew single Latin led digits. low up and and Asia America declined China were X% sales gas. mining

margin in results. up included adjusted expanded benefit a year-over-year. margin Adjusted segment lower about points XXX few additional XX% and comments our increases compensation a operating expense. basis operating I’ll QX from segment The was EPS EPS incentive make and

Patrick will remarks. financial in on our elaborate third performance his quarter

with that the results, now believe timing to investments. global for Taking XXXX. into organic of our up respect capital fiscal impacting to investment now to on year-over-year. move account year fiscal We full guidance Let’s trade we expect to year-to-date particularly related be customers’ our is about decisions, X.X% sales uncertainty those some XXXX

Including impact $X.X to now of the translation, we sales currency expect billion. be reported

guidance environment. includes which to reducing the We’re market range $X.XX the EPS current spending for adjusted $X.XX aligning to

the Sensia will venture. Patrick few guidance joint minutes, impacts discuss As include the this does in a not of

I Before authorized deploy growth investments, financial Board our allows an to moving share strong share capital organic repurchases. additional A billion us in-line mention with organic our want and yesterday, on, position priorities, repurchases. dividends that $X to for and

of talk making the right organic strategic the Regardless what our in share we’re is we’re executing confident and and evidence gaining about we macro Let’s a going that to see and on little environment, profitable well investments. we’re growth. in-organic drive that more investments

latest the secure in telling us set adding a smart logics enable and hybrid whole our These Beginning discrete, controller us first connected biggest end capture process opportunities processor we the competitors. level new industry’s that with invest the our to markets. a outperforms to security floor. business, architecture products. across core and our It certified generation our Customers broader of plant of continue logics are is on also

in lack automotive [CUCA] our work to that with In technology, dollar our highly competitors a high In from control this manufacturer. differentiated order capability. utilizing multimillion independent European large we QX performance motion secure cart global

gas process to end our We’re market. growth also the within us strong continues which oriented show increasing and oil markets for is like automation and penetration largest

both analytics up as our Sensia inorganically our as through market this organically well platform joint Schlumberger. and within with venture logics We’re FactoryTalk our going building capabilities process after by

way win value solutions connected is all to and from information new services another The across industries.

over share. are Sciences we’ve already last market markets this significant We’re two years double-digits in acceleration and the seeing like Life grown gaining strong where

strong win cyber our where many large seen effectiveness. offering with Our recent company traditionally our increase differentiation best analytics a medical process to technology MES, going very as in competitor and a including was security overall equipment in PharmaSuite, device deals resulted FactoryTalk the have the against recent way

we Asia win was our We be a drove are had inorganically because in Our on for our MES reliable, key won our strengthen and highly our platform. a will strategic EMEA more roadmap of expertise plan solution where and to analytics and digital domain and and was invest regions better. organically control competitive top differentiation Asia software we automotive us deeper also to both reach. used

that actively one from These is operations highest speaking convergence in confidence and to of our positioned capital detail look wins make Day to than return we’re benefit that to forward November. spending in give OT the and no our in deployment about and other happen. the and We areas better to we directing the initiatives are greater at global these of Investor to upcoming IT us

turn to and over sales I’ll XXXX earnings provide Now to more Patrick detail it our guidance. and our around results QX

Patrick Goris

slide good I’ll start on key which information morning and third Blake our you, everyone. financial Thank the X for provides quarter.

As with reported Blake Organic translation was QX X.X% and sales down of slowed mentioned, X.X%. currency expected weaker sales down reduced in than growth by X%. sales

Segment due spending. year. margin expense higher increase XXX offset operating compensation The expanding lower points mainly to investment last to compared the basis by partially margin incentive was in segment a was XX.X%

record. incentive plan track paper Our compensation culture our reflects and strong performance

financial covers plan most earned a performance our the bonus companywide globally company. employees have aligned of of being with incentive We with that very

Solutions the a in estimates bonus corporate is segment the million fiscal year The booked XXX net. adjustment quarter segment, the represents Control Product revised for segment the XXXX margin. for full booked about lowered outlook $XX balance of About performance, and financial point reflect expense. we was architecture the total software million third general To about which our two-thirds basis to and the $XX in and in

margin at ex-currency fiscal basis XX% XX%. year-over-year. XX our first the through XX.X% Earnings is quarters Looking operating segment adjusted is of and at is performance conversion the EPS points up three year,

organic incentive $X year-over-year the compensation The EPS and General count expense, was contributed million higher to of by result as XX% lower compared last quarter last EPS. result corporate the year. also quarter increase mainly lower tax the $X.XX is increased to partially adjusted expense. expenses expense. mainly The of interest compensation functional net of of year in rate year-over-year sales down Adjusted higher adjusted lower lower compared lower including the offset the share expense EPS a net up of third to million $XX in incentive was

income, cost quarter Free adjusted additional cash shown financial increases on quarters results being mitigated XXX% to is flow with performance tariffs, that was on not through vendors products. are negotiations chain of a targeted price higher a with $XXX the million of combination few the the impact quarter actions, in through on supply With slide. or the respect in net effective and items the neutral and three

full-year from $X X% in at repurchases. We of on last authorization. XX, outstanding or we $XXX.X $XXX.X shares million, previous X.X were diluted million June cost Through in billion million Average remaining the $X.X repurchase we XX, about down quarter target our pace repurchased for get are the quarter share a our At $XXX to million. under million shares had year. share June to

As $X approved repurchase Blake mentioned, our billion share additional has Board an authorization.

had include and organic provides and decline, margin segment Slide overweighed sales a our overview company cycle business. and not weaker growth the average With services to it and the shorter architecture end a this as solutions of segment. organic is compared X sales does performance markets on software X.X% generally performance the for any

points basis year-over-year and lower spending. from For about the is the offset lower of decreased impact segment and XX A by remains tailwind to compensation margin than more higher quarter, investment margin XX%. incentive sales

This quarter. X.X% in architecture businesses to Products product segment the on slide growth the Moving The and X.X% declined Solutions. to Control segment. this organic and year-over-year in similar segment X, had software about

in performance reflecting segment solutions high sales X% margin and segment lower QX higher points last organically. primarily this the due to businesses and segment solutions and this basis for increased in Operating about services by year XXX compensation offset in for increase in Book-to-build delays. was businesses incentive to X.XX grew compared project our spending. organic an this QX, investment services partially While

in next by provides of our sales of at Blake an remarks. overview The X region. most covered performance slide this his

slide on So guidance. move to I'll X,

We As full-year billion. sales expected implies are we of X.X%. growth to about XXXX This about fiscal organic $X.X X.X%. mentioned, QX organic guidance a our project now sales decline reducing about Blake sales X% of to

about We continue to XX%. of strong expect margin segment

$XXX items April to a to in be to similar XX.X%, General mainly discrete million million expense as April mix lower and of full-year the for point income. $XX global rate be in change will expected about corporate than a result believe tax our effective our tax year pre-tax favorable and full is guidance. X.X geographic guidance adjusted the We now net a

target be fiscal diluted shares million billion fully to We averaged expect XXXX. to now and for in outstanding we XXX.X $X continue share repurchases about

At $X.XX. guidance. to We our are $X.XX adjusted to compared guidance decrease midpoint a our revising this April EPS is the to range $X.XX

Our lower reported reflects and to conversion impact we slightly rate. about updated compensation year sales XXX% by represents of organic sales XXXX, lower a additional of midpoint growth income. free lower EPS continue full fiscal range adjusted the tax of offset Compared the somewhat the to expense cash spend lower reductions, and expect X% incentive on partially flow adjusted growth

Before I'll to Jessica, comments it make turn over I some about Sensia.

approvals in Sensia some year. Sensia our continue We regulatory this included with current to is calendar close are guidance. impact customary for No expect waiting associated to and

including the impact XXXX neutral. Assuming fiscal and we transaction fiscal associated the now an expect about this to benefit, tax be year to EPS adjusted closes

With that Jessica?

Jessica Kourakos

Thanks Patrick.

many like Q&A, the as possible. start I to say we we would want get you to Before to that of just as

Operator, to take first So yourself please Thank question. and you. a let's limit question quick follow-up. our one

Operator

Your Haskett. of line the John Gordon from first comes question from Inch

open. line Your is

John Inch

Good morning everybody.

Blake Moret

morning. Good

John Inch

cadence? just being for deterioration, projects you is both distribution function in quarter, in X% fourth or are down this actually growth further of guys and a of are there's terms the embedded assuming you the projects The pushed core assuming out say that

Blake Moret

at expecting So purchases the the automotive we're of that had about the going beginning been to that but that still year we've We we're for is sequential some projects seen improvement see looking some at the XX% full different for in some industries about year. looking overall XX%. full be down tracking, John, we as

then expected that QX areas. power; I the little in for inform food beverage performance performed outlook a the and in while weekend quarter QX semiconductor, that about our as than bit and those the we like in automotive expected, did areas of some weaker stories think chemicals, are see

than weaker QX the inform performances those outlook implied QX. with So expected in

John Inch

that there look is of think still going talked I automotive you does is part or had -- coming like model turnaround well? or thought that some changes you'd like of as the expectation about, through that the part the in be second in to still year, calendar projects half, deferred

Blake Moret

seen we've has included tracking. The there. on that some those that been about No, actually were purchases started we line-of-sight ones purchasing we've lot of talking a that projects early

So It's to expected we clear QX going purchases more. volume those in won not whether we majority is happen bit the just ones of a plus that from around XXXX. the little the into to

John Inch

little down end industry, you lastly stuff a the overall consumers macro, given viz-a-viz there heavy infrastructure, stepped any markets auto, bit. It's China but pretty China say Just and sort still is us could give in color like that? of decent

Blake Moret

We've talked Sure. saw some of about the it of China QX. in we stimulus again impact previously in the and

transit, most China by in quarter. in the for us impacted those government mass which were be wastewater strong would So stimulus, performers

John Inch

And weaker out? was would call anything incrementally that you

Blake Moret

about talk and bit information China overall auto talk that the little in had in and in but we solutions weaker China services, connected we'll Auto areas wins We quarter. our when was some different in about weakened. a

John Inch

thanks color. it, for the Got

Blake Moret

Thanks John.

Operator

comes the of from question line Julian Mitchell from next Your Barclays.

line is open. Your

Julian Mitchell

Hi good morning.

Blake Moret

morning. Good

Julian Mitchell

bit guiding the sales consistent downturns to give if us mitigating in does into compared on quarter. you the color assumption And history? that with just Maybe a this feel could past? decline organic other to today several it's for this into action with of when the last much sales taking quarters gone How you've dip little sales environment as your September

Blake Moret

have this we or historically a periods haven't that What expansion, to assumed is continued off even that beginning is during where has for times quarter we've that's growth also Julian, of something leveled of last two. Yes quarters. multiple the going seen seen we

important areas we to have take opportunity resources going saw at more as QX ways to cost that at and well However, direct are we're reinvest the of rapidly in future. actively spend with match to other measures reduction the you the conditions and be ways impact in to as the and looking to taken most both our look that market

watching cost this going closely. forward of opportunities taken have and looking the areas at we So very quarter QX We're we're reductions. be would that development

Julian Mitchell

business. Thank you would just very be much. follow-up And process the quick then my around

your in any that territory revenue slowed into growth the that been year-on-year the associated think the running X%, we backlog in growth services? with that XX% Should also I solutions in And September at on March dips you've in negative quarter. color to about and assume quarter?

Blake Moret

Yes.

oil see and process driving growth year-over-year some So and we solutions continue and and key slightly remains of gas do mining. services the up backlog in areas to such as

split as makes we saw in delays Some impact significant that say QX the of delays cycle fairly a that in most longer businesses projects, I that the typically it would also portion project well. by project process, delays of the between we colored up but those saw cycle shorter of were was

Julian Mitchell

Fantastic, thank you very much.

Blake Moret

Thanks Julian.

Operator

line next of the Ritchie Goldman Joe Your comes from from Sachs. question

is line Your open.

Joe Ritchie

you, Thank morning everyone. good

Blake Moret

Joe. morning Good

Joe Ritchie

and trends than of expected trends example, that a can anything maybe so to as any be you you lot discernible worse turned out you us about? from the the progressed, talk could Blake, for June quarter just about had been companies tell that hearing saw that we've on

Blake Moret

were that not May a But little got for April us and weak actually Yes. sequentially. June better and

the finish it in little bit we So quarter a saw stronger.

Joe Ritchie

that specific that? any markets there driving Were end were

Blake Moret

the can't applications have a quarter fairly to closely any particular the play bit middle the that except that terms went may watch since chemical sits I obviously where started weaker of followed in, that started improve kind a pick in and a the bit chemical we bit perhaps quarter of in is on. out that it as in to we and a

linear it doesn't for that other would in I make a fashion. our progress comment the quarter

run out about the month the can't make So and started we predictions quarter. full the last and has always a way it the out that is and quarter just strongest the extrapolate quarter so

Joe Ritchie

down guess there maybe in forward? And thinking go a Was CP&S incentive know well I is this then at on I margins as a impacted you should called you're out looking that be on standpoint clearly comp follow-on my we the guys incentive XQ. that just strong and from like question as big and we an normalized about margins, But anything else it then favorably really the thinking, be there comp the how stepping quarter what should comp driver. number incentive

Patrick Goris

Patrick Joe, here.

margin, quarter, So of The the related in tailwind helped the of compensation. of was largest well as X.X incentive had with growth respect year-over-year segment course to which CP&S then slight currency some for organic segment. increase part to a that segment is the less than margin and just point

a current the about that. think it is the plan incentive compensation, $XXX can incentive you compensation is fiscal and million of funded terms for about of XXXX guidance about Automation In way Rockwell XX% is for fully a that

Joe Ritchie

it, thank Got you both.

Blake Moret

Joe. Thanks

Operator

comes from JPMorgan. from Your question of next Tusa Steve line a

open. is line Your

Steve Tusa

Hi morning. guys good

Blake Moret

Good morning Steve.

Steve Tusa

crafts I just lot food machine the include to the is there? just of like stuff that that the about things that. kind Does worlds of and enterprise beverage way or it kind talk of the the a business that like types little a bottling that more break and Is some and packaging set of like you guys wanted of food of kind vertical. market with machinery broad more? tool the guys out to like kind of it end is and characterize out of are dynamics beverage maybe a Can

Blake Moret

Sure.

and includes both. beverage So food

certainly end the users. global So includes it

few of and the machine would the those also rebuilder. be includes an packaging, of Mondelez, crafts So that AVI. Nestle example a the the It

how the to machine worked the together performance of in system at rebuilders an can focus what OEMs that's business both it in as the as around Europe you're at it; a part world, for a works together packaging we and as strong of They U.S. So, ends in at well. user. provide the instance of well business part as as well fair looking the the have it integrated we both of and our kind that includes

Steve Tusa

I kind within you when exiting machine business you simply, a OEM kind this served of packaging But year. lot business and the guys just well. of of you performance small medium did the I of food business size where and OEM and I builder do, how think the that How do? the kind the this talk I that guess, vertical beverage know these so guess is the quarter about how characterize

Blake Moret

Yes.

quarter. OEM about high-single So mid-single Steve, and you global was within think was way in about digits our down packaging that it, down the the can business digits

Steve Tusa

fast how 'XX? that And in grow did

Blake Moret

because digits mid-single adopting in Probably consumer year. this it last was

Steve Tusa

great. okay, Yes, that's

Blake Moret

That's me. from

Steve Tusa

appreciate the Thanks color, I as always it. for

Blake Moret

Steve. Thanks,

Operator

line comes next Vertical the from of Jeff from Your question Sprague Research.

Your line is open.

Jeff Sprague

morning, Good you. Thank everyone.

Just two me, actually. from

being thinking also and I'm in Just could whether speak broadly to oriented. consumer related you're segment those that about with beverage if of track food kind markets wondering happen to kind of seeing the line averages? consumer in anything you else

Blake Moret

couple make I'll more. consumer have of typically. might that some a we think When underneath about broadly, here then we three Sure. Patrick comments areas of talk and

care so personal I tissue So, and think on Sciences. of so its and Life and beverage, food then home and

I Life the stand growth. beverage home is outlook roughly down and really personal double-digit Sciences performed terms is our and care similar. and strong of Food similarly But in think and

Patrick Goris

XX Science within dragging which Life Jeff, and good it's Blake care double-digit as in about out consumer. Yes, consumer, our the beverage is so so up and mid-single and mentioned in the food points is growth, XX which quarter performance consumer home represents down of really of personal digits

Jeff Sprague

you have just would year-to-date investment it increase there's just another actually sounds then color decrease, spend on true basis like spend. expense, give year-over-year $XX My Right, you of the be Those question little thank kind a comp or bit QX a up, of on the that. QX. million a so you could us on in for that? on investment And

Patrick Goris

our compensation revised QX, our think it for about that growth In X% grows you little we guidance, more about can metric. rate so than organic full-year. year-over-year; be spending less to our spending expect way investment investment for incentive bit current and down our little year-over-year. that a In a The exclude we than the

Jeff Sprague

you. Thank

Blake Moret

where not adjustments items, making I are discretionary side. same say the the more time, at on would R&D we that in is on spending And

X% For R&D QX, in example, was full-up year-over-year.

Jeff Sprague

very you much. thank Okay,

Blake Moret

you. Thank

Patrick Goris

Thanks, Jeff.

Operator

of the from Baird. next line from question comes Eastman Richard Your

Your line is open.

Richard Eastman

just you would less Yes, good be. the the to speak morning. at could suggest a or significantly minute book-to-bill .XX two that's seasonal book-to-bill it for than Blake, should

we sight I'm sight healthier referenced Is words the book-to-bill heavy lot I that you is project the have on line are kind you comments? and in out in but a you other in presume quarter interpret they of and delays but of a line industries there. a curious impacting those of projects weren’t how view the that of projects your booked that

Blake Moret

in their at say, is I'd precursor And have good visibility those why, the go close could further continue including pushed this QX. or the a obvious back to near with they why question the didn’t we them future reasons but we out didn’t the as unique plausible quarter. cancelled the the projects getting reasons they look to that just quarter to some or in in in come

push on unique that cause was And to gone. quarter case the latter necessarily in were not delays review, the based and out was that were of those our the each but they our majority sense them they being plausible in that the of reasons

that I higher in project shorter a delays of mentioned there's before businesses. the component cycle those little

business. shorter way solutions than the services So, of book-to-bill total it was bookings in higher think in delays of of cycle business the percentage that of the this

Richard Eastman

planning of feeling a necessarily half higher short first could this half It again you're as on percent is 'XX necessarily the again we of that first down. fiscal caution, doesn't cautious into mean 'XX track that you're 'XX, fiscal cycle. of that your drop mean So, you're it that some in doesn't is but

Blake Moret

That's right.

Richard Eastman

yes, okay. And -- just

Blake Moret

why would it? And

Richard Eastman

Okay.

Blake Moret

don’t while QX, we're log healthy. to for our guidance, give remains watching front our we but And wait quoting activity the November

Richard Eastman

just you could give capture of or quarter? okay. I Okay, number here, last the is us you just just in was priced a pricing Patrick it kind one could gross in, that's what define getting And one,

Patrick Goris

get about realization, for about We're same. at and associated the with the the includes, which quarters price three tariffs. we It's X.X% price good about QX X.X% Ric,

impacted implement or on by tariffs. products so, effected a you recall may we the targeted price increases that And

Richard Eastman

Yes.

Patrick Goris

associated X.X% price than price the bit larger includes so, a actions. this is little but prior years tariffs the year realization And with the

Richard Eastman

In will that off correct, And that's it? not words, it? come a is surcharge, of or other part

Patrick Goris

increase was neutralize not Yes. intention the to that. so whether the to make money out of impact The tariffs, of price

those the neutralize the be object tariffs. at to would tariffs impact expectation some so, eliminated be price is would And the being increases that that also of And if adjusted. point

Richard Eastman

Got you.

Okay again questions. great, thanks for the

Patrick Goris

Thanks, Ric.

Operator

Your next of the Wolfe question comes from line from Research. Nigel Coe

Your line is open.

Nigel Coe

morning. EPS I'm Put as the I to is XQ. little good guidance get way at XQ say the year-over-year to A&S low-end Thanks, a color than would only to at I your to always. be to could to got starting X% the significantly that range the weaker and you the for X% get point organic

single thinking that mid-to-high Is sort you're CP&S of digits, with down could probably up building flat? is XQ? that that A&S you're organic So, how how be

Patrick Goris

that's to of way end to get look Nigel, it. current not an at to low guidance, the our unreasonable

Nigel Coe

Okay.

of cycle So, get we and the I Are we unusual there actually the saw so sort that'd mentioned be that you quarter FY'XX. think said quarter that is context before upcycle growth not of several of have we within in to through you accurate. And negative back where down you growth. in situation Blake

I do or your growth something like back So, here that appreciate to think there. you us snap that's thoughts quicker.

Blake Moret

investment continued it for that we we've while, talked as quite this been impacting point. is Well, we about, at uncertainty think the a decisions mentioning

And a some uncertainty reduction stability in that would the so, certainly of outlook help.

be have business, would right. to short In cycle fourth quarter, the in it terms of

but profits. that a some impact as to cycle for would improvement outlook while might flush orders take longer it revenue So, and in on

help terms counting on very on what not looking In duration seeing currently, we're closely development going to be going certainly again macro the be of trade, at to we're of at that at the of looking we're we're progress the the would all. but quarter,

Nigel Coe

And just clearance within maybe a and sales tracking that this on comment factor snap how quicker. you're Channel Can that just A&S selling that things you last all through back now? your points. might touching right would be

Blake Moret

State, please? say again, Nigel,

Nigel Coe

headwinds seeing clearer, channels? any bit a are just inventory curious if little I'm question guess you're you A&S I in a your seeing make

Blake Moret

of a that's No. Inventory we visibility been America. on particularly results distributors to case impact really as or the into what product North our have side. whether know we may the carry other not including product, changes in you have our the segments good our it's A&S material

Nigel Coe

Okay.

Blake Moret

Yes.

with we're are involved We closely different that's nothing our aligned, and as there. there's replenish distributors being closely they inventory done

Nigel Coe

very you much. thank gents, Okay

Blake Moret

Thank you.

Operator

line Stephens. next McCarthy comes from Your from question the Robert of

is open. line Your

Robert McCarthy

morning. me? Can you Good hear

Blake Moret

We can.

Patrick Goris

can. We

Blake Moret

doing, are is any Hi, Rob. How --. there you

Robert McCarthy

first just of Yes. expanding guidance for questions I around to on 'XX guess fiscal give much the know don’t I to some want we're question try. is the and as you going as 'XX fiscal

more just some as do about step think just of better think and we businesses versus you here worse? limited better about do think some some across comparisons auto versus into could we about -- how of we maybe other visibility: 'XX, compares you Could closer of the where where feel you the to talk you how get your bottom might you of that kind and

Blake Moret

is auto. away. give a about the went importantly So, were would talking sequential which year what we've saw the concerns let's results us with stable mentioned that of been expectations, little through our if projects I we and bit start with growth more

continue to market it traditional models maybe there be them. to to happened and continue highly engaged we're we a vehicles and those and relatively as to need build vehicles bring look competitively well bit with associated that new to little automation fact companies places at they're going small as of see to while I and to starting purchases see of EV what they're not we we're our as to That's do a going overall in as business, the

healthy. see So, continuing we is that the and log as front before, I mentioned fairly

there and would things our there results. we like quarters; current oil good activity businesses you cycle longer visibility have in other might For go that across where reflected that to multiple saw continues and be on and gas mining,

difficult The have quarter cycle the through view more it's we of in is and we'll shorter so, to November. year, look at business, on by see the outlook And our the fiscal changes there. informed don’t details course more what

Robert McCarthy

candle light helpful. darkness. the than rather that's And I Okay, a curse

growth that digit a we quarter the information with decent having pretty connected talk night And strong services. the in it why double So, about a like have relationship challenging last PTC while and don’t actually solution for the looks you quarter. continued

talk wins how metrics could key there we collaboration? and about and the Maybe about you're that feeling

Blake Moret

this to been you're more Rob. are probably we good started Happy ago year see and even to a a about we candle, excited lighting and glad little the on relationship a then It's journey.

differentiator. continue Euphoria it sort it's company Very about third was Korea. of it and a in come around in Euphoria selling with of talked across to last [indiscernible] offering we industries We InnovationSuite because wins a augmented geographies. and in any see competitors night So, somewhere our tire good FactoryTalk few of wind a across reality we're currently. There have like PTC wins a and our big

continue sometime see very PTC wins had new that us specifically in have strong. control that to the in open in the offerings analytics for about continues plus there the industry our in of The to Life we really I and MES grow an the market, growth were Sciences. that We field talked brought combination to double-digit FactoryTalk puts Life an basic Sciences. software

So I'm happy with it.

more proficiency accelerate doing in going that in in November IT one comment, lot a and revenue as We're of It's lot business to last managing going about our recurring It's model. move we're a going sales an to not to growing certainly things to our November. infrastructure about our component about about our business. and we're software it's to talk talk overall just comprehensive the talk, more organization streams that more we're and a

Robert McCarthy

you I'll the think would don't you. for this, notable won I that's of it very think with the PLC win leave believe Well, you something they in [indiscernible] think so a this, I IT

Blake Moret

Rob. Yes. Thanks

Operator

of line comes question from Wells Deepa Your Raghavan Fargo. the from next

line is open. Your

Deepa Raghavan

good Hi morning.

Blake Moret

morning. Good

Deepa Raghavan

me. Two for questions

about growth us First, have can you your please into how region? regional talk and on just views outlook quarter what based update on changed seeing your you're across

Blake Moret

So, to in year. continue the we Latin America growth as see providing

the little We single were full in that North seeing and the a also for America QX, of digits. see In regions the weaker than EMEA low expected. growth Asia year we were

Patrick Goris

low guidance. little North little our the America than year lower for way is, digits. went company think current regions guidance digits, a full prior below mid about from the for Deepa average can single are it a you to all single the bit bit the Yes

were Asia So rather teens still before. about the than still and it's America is did EMEA we teens, and mid Latin that expecting XX%

outlook bit. our come in a every So has down other region

Deepa Raghavan

trepidation you color. you're your me, to about for few regards with recover cycle discussions, of on the the and Blake based times Thank their having you. What by of are markets the are current is magnitude now. with are the the if Follow-up what or if talked Got curious a duration or from some in surprised it, those client surprised expectations you weakness? what you're weakness your thanks short conversations

Blake Moret

Sure.

on to connected look to the what's think ways are strong growth contributing production continued information improve continuing top I basic some to productivity of services. decisions I think in that see customers cycle continued short investment around tariffs We over and the businesses that particularly to and and capital. the part that's on weigh certainty we're solutions is starting even seeing trade these of their of part

demand some through at customers as those But in to we're specific near-term cancellations. and cycle being further and went weigh to seeing the prospects plausible these are project-by-project as the again for products terms opposed of the as and push and we capital, outs looked general reasons that delays, precursor that's what are shorter given on

Operator

Your of from next question from line [indiscernible] comes Andrew the Citi.

is open. Your line

Unidentified Analyst

Vladimir Bystricky Andrew. again morning. It's good for Hi,

Blake Moret

Vlad. Good morning

Unidentified Analyst

hearing from delays your you tariffs could transitory more context versus widespread? customers be gives something these that of the delays that cancellations. up I that more to uncertainty So, sort not and plausible question of your delays on linger specific versus and up guess what you to and on are last and that confidence of drivers necessarily they're are just precursor comment the in push following that

Blake Moret

and companies supply I terms to into we with deal coming things chains of similar have year. continue we doing what to did are think these They information restacking their look the looking tariffs. at are in at the to

are get a tariffs trying sub-suppliers are And to inputs. cost to where so, of of we to there and as is that where built, their those movement products people being of is on various those the impact are neutralize who the products are

that's a work. so of And lot

uncertainty and some undone things, time in off have we're to that to doing by are our aren't way These that won't a talking the decisions to dealing customers that so environment the of current about horizon with being kind be and short-term in dealt that the with. that's able made react overnight we've

Unidentified Analyst

then, helpful. a shift just That's CP&S could minute. And I to if for

X% the momentum was think you good there. I up talked, You services and within some said Obviously you business guys solutions the quarter. organic in have very had

also there? your mid-single to remind So visibility just digit is help that growth CP&S continued business us big one can you and within

Patrick Goris

The think about control is, way can Vlad and that business solutions services solutions, and is of two-thirds about within the products you segment.

Blake Moret

it so which be that services for that and that little things include remote months order the importantly time projects that. just we get monitoring, think, track consultation or operations those gas shorter cycle a six longer businesses, the that like time the also the ship repair us, average for duration portion to like peel projects as of the includes growing might of five the we cycle some instance that I projects and from services product oil often it. back but It of the would that things to bit And connected attends things say also includes well network further the

and then that. the So as and scope defined high-value so mix also business, things centers those control to it's as like well order projects of engineer a motor services

segment. that of number to that gave Patrick All that the contributes overall two-thirds of CP&S

Unidentified Analyst

queue. Okay. hop I in will That's you. helpful. Thank back

Jessica Kourakos

question. we take one Operator, more will

Operator

of from Deutsche the line Nicole comes Your question DeBlase Bank. from last

Your line open. is

Nicole DeBlase

morning. Yes. Thanks. Good

Blake Moret

Good morning.

Nicole DeBlase

more. into dig I So to little want XQ a organic just bit

that be that organic there Could into said got little decline? actually a some things better conservatives in guess sequentially. X.X% X% to July that? does baked So you bit corroborate June I the worse time I'm progression? the having made comment quarterly hard things about trend so in why just XQ much fourth that get organic and given the quarter a you the understanding

Blake Moret

Yes. Nicole will to Patrick comment might add as and well. I make then a want

to next quarter. we're a can't and that. at apply We the as on extrapolate days to of through much peek the to like reporting performance first we be that then the take quarter out able As would correlation a linear

based we As line looked outlook the early is of July straight look just looking the and that of encouraged as with I we factors Typically QX, our quarter. June we the on draw can't mentioned were we development at that before, but inform conclusions strongest performance one we the inform but that we outlook. the account at It's helps it. take can't a that draw at into as QX,

Nicole DeBlase

And a Got spending. on that's just it, Blake thanks. clarification then, the investment question helpful,

I little Patrick, full said for know So up bit year. you X% than the less a

to for terms saying were XX can you million guidance versus the previously dollar clarify full it's terms a What I does the million up think in that in year. you on apples-to-apples XX mean Just basis? that dollar clear prior

Patrick Goris

now. to XX XX About

Nicole DeBlase

it, you. Got thank

Patrick Goris

Nicole. Thanks

Operator

questions. There I’ll turn over to are further call presenters. the back the no

Blake Moret

quarter So new performance I'm business just the difference customers and offerings a cycle important summarize, in is cycle productive. environment. how shorter is longer project-oriented Rockwell of happy the saw between embracing the our to business. help the with more add to and that This innovation expertise be sharp macro market regardless

life to all our our and and I our them resources We customers journey. the also at highly have begins in the productive enterprise ways They thank using operations to with by initiatives this bring to our directing and who our our partners committed to strategy. look engaged for strengths in best more connected in accelerate operations employees that That of day be continue own roles to own every and all. their

Jessica Kourakos

for That concludes joining us. today's call. Thank you

Rockwell Automation (ROK) 25 Jul 192019 Q3 Earnings call transcript