- CEO says growth may not start until later in the year
- Industrial customers are postponing capital expenditures
Rockwell Automation Inc. fell the most in more than two months after the maker of factory-efficiency software said earnings and sales may decline in fiscal 2016 as customers postpone capital investments.
Adjusted earnings per share may be $5.90 to $6.40 on sales of about $6 billion, the company said Tuesday. Profit for the year just ended was $6.40 a share, while revenue was $6.3 billion. Analysts had expected $6.71 in 2016 earnings and $6.41 billion in sales, according to the average of estimates compiled by Bloomberg.
“That reflects continuation of the weakness we’ve seen,” Eli Lustgarten, an analyst at Longbow Research who has neutral rating on the company, said in a telephone interview.
Industrial markets including oil and gas haven’t stabilized, while there’s still softness in emerging markets, Rockwell said. A stronger dollar is hurting business in the U.S., so customers are “more cautious” about capital expenditures, the Milwaukee-based company said.
“We are experiencing weak market conditions as we enter fiscal 2016,” Chief Executive Officer Keith Nosbusch said in a statement. Rockwell doesn’t “believe we will see year-over-year growth until later in fiscal 2016,” he said.
Rockwell declined 3.3 percent, the most since Sept. 1, to $104.18 at the close in New York. The shares have lost 6.3 percent this year through Tuesday.