Rockwell Automation CEO Explains Coming Success

Blake Moret, CEO of Rockwell Automation, joins ‘The Exchange’ to discuss the manufacturing slowdown, automation transformation, the change to digital and the company’s strong earnings. Rockwell Automation is the maker of industrial machinery and automation software.

What happened

Shares of Rockwell Automation (NYSE:ROK) jumped more than 13% on Tuesday morning after the industrial technology company reported better-than-expected results for its fiscal fourth quarter, and guided for an earnings range that exceeds analysts' consensus forecast for its next fiscal year. Many industrial-focused companies are suffering amid the current slowdown in the manufacturing sector, but Rockwell appears to have a portfolio that can weather this storm.

So what

Rockwell Automation, which provides robotics and technologies that help automate factories and assembly lines, reported adjusted earnings of $2.01 per share on revenue of $1.73 billion, beating expectations for EPS of $1.92 on sales of $1.65 billion. Its operating margin fell slightly from 20.8% to 20.2% due to restructuring charges, but for the full fiscal year, its operating margin was up.

Image source: Getty Images.

Ahead of this report, investors had feared Rockwell Automation's manufacturing customers were cutting their capital spending, and management twice reduced its earnings guidance this year. But the  company credited its wide reach with helping power this latest earnings." Our broadening portfolio helped deliver better-than-expected performance in the quarter," CEO Blake D. Moret said in a statement. "Organic sales growth of 1.4 percent was driven by continued strength in oil and gas, mining, and life sciences, as well as better performance in automotive and food and beverage."

Now What?

Rockwell Automation also provided an optimistic outlook for its fiscal 2020, saying it expects earnings of between $8.70 and $9.10 per share. Analysts had been expecting $8.52 per share. Moret says he expects cost-cutting moves undertaken this year to boost results, and said the strength of the company's products should be a counterweight to the weakness in the industrial sector.
"Our outlook balances geopolitical uncertainty with confidence in our differentiated portfolio and ability to gain share," Moret said. "We will complement organic investments with inorganic opportunities that best align with our strategy."

Rockwell's core business, placing automation and Internet of Things tech inside factories, could be attractive in a slowing market as manufacturing customers attempt to streamline and do more with fewer workers.

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AT&T Provides Tools To Combat Cyber Risks

While awareness of 5G-related cybersecurity risks is high among enterprises, more needs to be done to prepare, according to a new report from AT&T’s cybersecurity unit, which suggested implementing tools like virtualization and automation.

In AT&T’s most recent Cybersecurity Insights Report, based on a survey by 451 Research, nearly three-quarters of respondents indicated medium-high or high level of concern in terms of the potential impact of 5G on security and 76% expect brand-new security threats to emerge from 5G.

The communications market was most concerned, with 54% expecting 5G to have a very significant impact on the network that might require a new security stack or an entirely new set of processes, compared with 42% of respondents overall. 

The survey was conducted in August and September 2019 and polled 704 security professionals located in North America, India, UK, and Australia, from organizations with at least 500 employees and across sectors such as manufacturing and construction, communications, financial services, and technology, among others. 

5G is unique in that security features are baked into the 3GPP 5G standard, including stronger over-the-air encryption and subscriber identity privacy to help ensure 5G devices are connecting to the right network, but AT&T said standards alone are not enough to handle all business security needs.
With 5G comes more avenues for cyber-attacks on enterprises due in part to the potential for a larger attack surface and a greater number of connected devices, AT&T noted.
  
In terms of what enterprises are worried about, the aforementioned issues ranked highest for top security concerns, with 44% citing a larger attack surface due to the massive increase in connectivity, and 39% naming concern over a greater number of devices accessing the network, followed by the need to extend security policy to IoT devices (36%). See the graph below for other concerns respondents cited as top security concerns regarding 5G.

Frequency of top 3 concerns for enterprises 5G. (AT&T Cybersecurity Insights Report 2019)
Most surveyed are getting ready for 5G-related security changes, with 16% already implementing changes and 38% expected to start within the next 6 months. Another 35% said they will start in the next 1-2 years. Still, three-quarters believe current security policies will either continue to be effective as 5G rolls outs (22%) or will need tweaks, but without major changes (53%).

Source: Fierce Wireless 

Automation Could Replace 800m Jobs

A staggering 800 million jobs could be replaced with automation by 2035. While this may come as surprise, researchers have become increasingly focused on how this shift will shine on the American people.

Candidates like Andrew Yang, a Democrat, (who's chances of winning any U.S. election appear better than most expected) are pushing for a way to match this combat this occupational shift by implementing a universal income bill. This bill lays the groundwork for a $1000 a month, no questions asked, payment to adults over 18 that can pay for things like rent, gas, food, day care, health, and school.

Yang's automation alarms are correct, I believe, because this could be replaced with something much better if thought about ahead of time. Think about the people who would have less stress because they are finally getting a slice of the sales on tax dollars which as of today are not even being payed by Amazon, Yahoo, Google, and others.

Millions of American college students owe huge debts for student loans in this country. Some work two jobs and do their best to achieve personal success e.g. the pursuit of happiness, How can we leave them in a debt hole created by the banks and wall street? The answer is government accountability

Top 5 Occupational Fields To Be Replaced By Automation.

• Food Prep
• Office and Admin
• Transportation
• Productions
• Construction

Source: cnbc article