Last week, Rockwell Automation Inc. (ROK) reaffirmed its fiscal 2010 guidance. The company forecasts revenues of $4.1 to $4.4 billion and earnings of $1.25 to $1.75 per share for the fiscal year. Rockwell had reported EPS of $1.53, on revenues of $4.3 billion for fiscal 2009.
 
Fiscal 2010 revenue outlook assumes a favorable currency translation impact. Excluding currency, the company expects fiscal 2010 revenues to decline by 9%-2% from the prior-year level, as the slowdown in industrial equipment spending seen over the last few quarters is expected to continue in the near term.
 
Rockwell said that it has witnessed a sequential improvement in order rates for both its Products and Solutions businesses in the current quarter. On a year-over-year basis, the company expects revenues to be lower in the first half of fiscal 2010, with growth turning positive in the second half of the year.
 
Rockwell is focused on expanding its global market presence. The company sees strong growth potential in the emerging markets. According to Rockwell, automation growth rates in the emerging markets are expected to be 50% higher than growth rates in developed countries. The company derived around 20% of its total sales from emerging markets during fiscal 2009. Management stated that emerging market growth is the key to meeting Rockwell’s target of deriving 60% of its revenue from outside the U.S. by 2013.
 
The company also aims to broaden its portfolio of products, services and solutions as it enters new markets. The company intends to enhance its market accessibility and be less dependent on any particular industry or geographical region by successfully diversifying its revenue base.
 
We maintain a Neutral recommendation on the stock.
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