Rockwell Automation, Inc. (ROK) has received an $11 million contract from Cynar Plc, a leading technology company in the waste-to-energy market. As per the contract Rockwell Automation will design and build a plastic to fuel conversion plant in Bristol, U.K., for Cynar customer and partner, SITA UK Ltd.
Rockwell Automation will work on the design and build of process skids, automation architecture, software, power control and engineering/startup services utilizing the Rockwell Automation PlantPAx Process Automation System.
London-based Cynar, through its unique conversion technology process, transforms waste plastic that are otherwise disposed of in landfills and incinerators into liquid fuels, mainly diesel. Through the process, synthetic fuels that are produced are cleaner and low in sulphur.
The Cynar and Rockwell Automation alliance goes back two years. Till now Rockwell Automation’s Global Solutions team had been engaged in the development, engineering, modularization and process improvements of Cynar’s waste end-of-life plastic to fuel conversion plant. The current contract award marks Rockwell Automation’s entry into the design and build phase of the project.
Rockwell Automation reported an increase in profit to $183.3 million or $1.27 per share in the first quarter of fiscal 2012 from $150.1 million or $1.04 per share in the same quarter of prior fiscal year. The profits exceeded the Zacks Consensus Estimate by 6 cents per share.
Sales in the quarter grew 8% to $1.47 billion, which is lower than the Zacks Consensus Estimate of $1.52 billion. Acquisitions contributed 1 percentage point to the increase in sales while currency translation reduced sales by 1 percentage point.
Based on projected sales of $6.2 billion to $6.5 billion in fiscal 2012, Rockwell expects EPS in the range of $5.05 to $5.45 for fiscal 2012.
We believe Rockwell Automation is well positioned for long-term growth based on its strong global market presence. The company is focused on further expanding its global footprint in emerging markets, as it expects automation growth rates in the emerging markets to be 50% higher than growth rates in developed countries. In fiscal 2011, emerging markets represented about 22% of total sales. The company has a long-term goal of deriving 30% of its total revenue from emerging markets. This is the key to meeting the company’s target of generating 60% of its revenue from outside the U.S. by 2013.
Based in Milwaukee, Wisconsin, Rockwell Automation is an original equipment manufacturer of industrial automation equipment, application specific integrated software and consulting design services. The company is a leading global provider of industrial automation power, control, and information solutions.
Rockwell competes with ABB Ltd (ABB), Emerson Electric Company (EMR) and Siemens AG (SI). Currently, it retains a Zacks #2 Rank on its stock, which translates to a short-term (1 to 3 months) rating of “Buy”.
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