At the close of what has been a double-digit growth fiscal year for most of the big automation vendors, Rockwell Automation and Siemens AG this week reported solid financial numbers driven by strong market demand.
Rockwell yesterday announced that 2007 sales were up 10%, to $5 billion, amid a corporate revamp designed to build the company's standing within the process industries. Net income for the year ended Sept. 30, 2007 rose sharply — to $1.49 billion from $607 million in 2006 — mainly as a result of the sale of its Power Systems group earlier in the year. By comparison, income from continuing operations, excluding special charges, grew 15% to $597 million, from $517.3 million in 2006.
Fourth-quarter sales jumped 15% year over year to $1.37 billion, but net income in Q4 was flat at about $165 million, the company said. Meanwhile, in the Control Products & Solutions group, sales spiked 20% to $801 million, from $667 million in the same period last year. Company officials credited acquisitions with some of the gains.
During the year, Rockwell divested its Power Systems business and made three strategic acquisitions, with Pavilion Technologies Inc., a purveyor of advanced process control software, the most recent. Providing products and solutions to the process industries will be an important growth lever in 2008, company officials said on a conference call to announce the results. Logix, the company's multi-discipline control platform, remains the company's bread-and-butter product line, but officials hope new additions to the product portfolio in the form of complex process modeling and safety software will enable Rockwell to compete for business in the oil and gas, life sciences, and chemical industries.
In order to break into that space, however, Rockwell must offer value-added services that allow customers to meet business needs, including achieving faster time to market, lowering total cost of ownership, improving asset utilization, and reducing manufacturing risks, said Rockwell Chairman and CEO Keith Nosbusch, in an interview with Managing Automation.
"For us to evolve from a discrete company to a plant-wide control supplier ... we have to become more of a solution provider," Nosbusch said.
The company is not changing its core, Nosbusch noted, but augmenting it with new capabilities. These changes will be major contributors toward Rockwell's projected 10% to 12% revenue growth in 2008, he said. Logix, which the company projects will grow by 20% in 2008, will also help the transition into process markets. Currently, two-thirds of Logix sales go into the process and OEM space, Nosbusch said.
Collectively, Rockwell's efforts in 2007 will keep the company on a steady course going forward, officials said. "Our demonstrated ability to diversify our revenue base, combined with recent acquisitions, causes us to be optimistic that 2008 will be another good year for Rockwell," Nosbusch told financial analyst during yesterday's briefing.
In its fiscal fourth quarter, ended Sept. 30, Germany-based automation giant Siemens AG reported revenue up 9% year over year to €20.2 billion, while orders rose 21%, to €21.3 billion.
The highlight of the quarter was an operational profit of nearly €2 billion, a 166% jump over the same period last year. All of the company's nine operational groups contributed to the profit results, having reached their target margin ranges for the first time, and in accordance with Siemens' Fit 4 2010 initiative, the company said.
However, Siemens swung to a loss of €74 million in the fourth quarter, compared with income in the prior-year period of €148 million. The drop was attributed largely to non-operating items in discontinued operations, including the pending close of its sale of Siemens VDO Automotive.
The Automation and Drives (A&D) group reported solid results in the quarter, posting a profit of €607 million, a 42% jump compared with the year-earlier period. Revenue for the group came in at €4.4 billion, a 22% year-over-year increase and a new quarterly high. A&D's revenue rose 32% in the Asia-Pacific region, 26% in its home market of Germany, 20% in Europe outside Germany, and 16% in the Americas. For Siemens as a whole, orders in the Asia-Pacific region increased 61% year over year, including 87% growth in China.
For the full year, A&D's profit increased 33%, to €2.1 billion, while revenue for fiscal 2007 was up 18%, to €15.4 billion. For Siemens as a whole, net income rose 21% to €4.03 billion in fiscal 2007. Revenue grew 9% to €72.4 billion, while new orders were up 12%, to €83.9 billion, for the full year.
In discussing Siemens' quarterly results on a Webcast today for financial analysts, CEO Peter Loscher reiterated his intention to focus on transparency, accountability, and performance going forward, including a streamlined leadership structure as well as an organizational restructuring that will meld the current nine business units into just three — Energy, Industry, and Healthcare — a plan first suggested when Loscher took over as CEO in July.