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Rockwell Automation's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: ROK

Europe had another strong quarter despite macroeconomic headwinds. Our team there is executing very well in a difficult environment.

I was encouraged to see Asia return to double-digit growth in the quarter. China improved to high single-digit growth, and we are optimistic that market conditions will continue to improve in the second half of the year. Our outlook for India is more cautious. Sales in India were flat in the quarter, and we have yet to see evidence of improvement in the economy.

Lastly, while Latin America organic sales were only up 4% in the quarter, they have difficult comparison to a great quarter last year. Orders were strong in the quarter, and we continue to expect double-digit growth for the full year. I hope that regional color was helpful. I have a few other second quarter highlights to share before I move on to the first half.

Our Process business continued to gain traction and delivered another quarter of over 20% sales growth. We continue to expand our integrator network, which is enabling us to pursue a broader spectrum of applications in all regions. Process remains our greatest growth opportunity, and we are executing well. We introduced 2 new Logix mid-range controller platforms that improved scalability and Ethernet connectivity, plus enhanced motion for our OEM customers.

For the fourth time, we were recognized by the Ethisphere Institute as one of the World's Most Ethical Companies. This award is a real tribute to the efforts of all of our employees and the importance of ethics in our culture.

Ted will provide more detail on second quarter financial performance in his remarks. So I'd like to provide a few highlights on the first half of the fiscal year.

I am pleased with our year-over-year performance through the end of March. Sales grew over 8%, excluding currency. Operating margin expanded 1.7 points, and segment conversion margin was over 40%. Earnings per share in the first half grew 12% in spite of a pretty significant headwind from taxes, and we continue to generate best-in-class return on invested capital.

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