This Company Rocks!

Rockwell Automation (NYS: ROK) rocked the Street with a huge 47% jump in its third quarter earnings, driven by strong sales across all geographic regions. The numbers, however, did not impress investors much, as the stock retreated nearly 5%. Was it just an overflow of general shaky economic sentiment, or is there something more to Rockwell's numbers?

The numbers
Rockwell's Architecture and Software segment saw 21% revenue growth from the year-ago quarter, to $672.9 million. Though 6% of that jump can be attributed to currency translations, the primary driving factor was a 25% growth in its information-enabled Logix platform. The other larger segment, Control Products and Solutions, also saw sales rise by 18% over last year. Overall, organic revenues grew a healthy 13% in the quarter.

Rockwell's numbers are keeping up with the recent trend of good performances in the automation sector. Emerson Electric's (NYS: EMR) industrial automation segment's sales grew 24% in the third quarter, while Honeywell International's (NYS: HON) Automation and Control Solutions segment's sales surged 20% in its second quarter.

Every geographic region Rockwell has a presence in experienced strong sales growth in the just-concluded quarter. This top-line growth helped its net income surge to $179.5 million from $119.4 million in the year-ago quarter.

Rockwell continues to return value to shareholders. It has raised its quarterly dividend by 21% to $0.425 per share. It also repurchased shares worth $114.3 million.

Emerging trend
Apart from growing U.S. markets, automation players are gaining from robust demand in emerging markets. Rockwell's Latin America and Asia-Pacific sales grew 21% and 14%, respectively, in the latest quarter. India witnessed a 27% growth in organic sales.

Siemens' (NYS: SI) revenues from emerging markets accounted for almost a third of its total revenues in the third quarter, with India growing at 34%. ABB (NYS: ABB) also saw the highest order growth in Asia, up more than 50%, in its second quarter.

Rockwell is wisely looking at tapping this growing emerging-market trend further. The Wisconsin-based company is now aiming at 60% revenues from outside the United States, up from 20% in fiscal 2010. It also expects to improve Asia-Pacific sales by 20% this year.

Rockwell recently acquired an automation service provider with a view to expand in Europe and Asia. Before that, it targeted the Southern Africa region by acquiring a company based there.

The Foolish bottom line
Rockwell has raised its fiscal 2011 revenues and earnings guidance. Keeping the company's good performance in mind, it looks like a stock worth considering.

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At the time thisarticle was published Fool contributor Neha Chamaria owns no shares of any of the companies mentioned in this article.Motley Fool newsletter serviceshave recommended buying shares of Emerson Electric and ABB. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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