Rockwell Automation Q4 , full year results

Rockwell Automation, Inc., Milwaukee, WI, reported fiscal 2002 fourth quarter income from continuing operations and net income of $49 million. This result includes income of $4 million ($3 million after-tax) from the favorable settlement of intellectual property matters; and a charge of $4 million ($3 million after-tax) related to a workforce reduction and an asset impairment at Rockwell FirstPoint Contact.

Fiscal 2001 fourth quarter income from continuing operations and net income was $12 million. Excluding the effect of the amortization of goodwill and certain other intangible assets, special charges and a favorable intellectual property settlement, income from continuing operations in 2001's fourth quarter would have been $27 million.

Sales for the fourth quarter were $1,017 million compared to $976 million in the fourth quarter of 2001. Full year 2002 income from continuing operations before accounting change was $226 million. This result includes: a benefit of $48 million from the settlement of tax matters for the period 1995-1999; income of $9 million from the favorable settlement of intellectual property matters; a charge of $4 million related to a workforce reduction and an asset impairment at Rockwell FirstPoint Contact.

Excluding the effect of these items, income from continuing operations before accounting change was $174 million.
Full year 2002 net income was $121 million. Net income includes a trademark and goodwill impairment charge of $129 million ($108 million after-tax) related to Rockwell Automation's adoption of SFAS 142 and income of $3 million before- and after-tax from the resolution of certain obligations related to two discontinued businesses.

Fiscal 2001 income from continuing operations was $125 million. Excluding the effect of the amortization of goodwill and certain other intangible assets, special charges, resolution of tax matters and a favorable intellectual property settlement, income from continuing operations was $198 million. Net income, which includes the results of Rockwell Automation's discontinued Rockwell Collins business, was $305 million.

Sales for the full year were $3,909 million. This result compares to $4,285 million in fiscal 2001, which includes $60 million related to the former Rockwell Science Center business.

Don H. Davis, chairman and CEO, said, 'We are pleased with the performance turned in by this management team in these difficult market conditions. Excellent execution on our various productivity initiatives under the Rockwell Lean Enterprise program had a significant impact on our operating results and also resulted in strong free cash flow for the full year. Our cash generation capability remains outstanding and provides the ability to continue to make important investments in the future of our business.'

Davis added, 'Indicators of the future direction of the global manufacturing economy are mixed, though our end markets have generally stabilized. While we do not expect further deterioration in the markets we serve, we are managing our cost structure tightly, and our first quarter results will include expenses for targeted cost reduction actions. These actions, combined with normal quarterly revenue trends, are expected to result in first quarter earnings per share in the range of 16 to 18 cents. For the full year, we will deliver earnings growth of at least 15 percent (to $1.05 per share), even if the current soft business conditions persist. If business conditions improve modestly, we expect to achieve earnings growth of 25 percent (to $1.15 per share).'