(Reuters) - Factory automation systems maker Rockwell Automation Inc (ROK.N) on Wednesday raised its revenue and profit forecasts for fiscal 2017, citing improving outlook for industrial production growth, sending shares to a record high of $165.
Rockwell said it expects full-year organic sales growth of 4.5-7.5 percent, compared with its previous forecast of 1.0-5.0 percent.
The Milwaukee, Wisconsin-based company also raised its full-year adjusted profit forecast to $6.45-$6.75 per share, from $5.95-$6.35.
“Recent projections of industrial production growth have been adjusted upward and rates are expected to improve over the course of the year,” Chief Executive Blake Moret said on the earnings call.
Industrial production rose 0.5 percent in March, helped by a weather-driven surge in utilities generation. This was the largest increase in utilities output on record, according to the Fed.
With President Donald Trump pushing to keep factories in the United States, investors are betting that automation will gain speed in industries ranging from auto manufacturing to chicken processing to craft beer breweries.
Rockwell expects continued growth in demand from consumer and transportation
industries and a slight pick up in demand from heavy industries even as capital spending by its oil and gas customers remain weak.
“Rockwell’s recovery over the past few quarters has been faster than Tesla, driven by an increasing shift to its highest profitable architecture and software business at a time when the global industrial economy is becoming more digital,” William Blair & Co analyst Nicholas Heymann wrote in a note.
Sales in the company’s architecture and software business, which makes computers that help run manufacturing processes, rose 14.2 percent to $719 million in the second quarter ended March 31.
Rockwell said sales in its larger control products business, which makes motor starters, signaling devices and relays and timers, rose 3 percent to $835.3 million.
The company’s business in United States, its largest market, grew more than 5 percent, led by strong performance in the automotive industries. The company also saw double-digit growth in China.
Net income rose to $189.5 million, or $1.45 per share, in the quarter, from $168 million, or $1.28 per share, a year earlier.
On an adjusted basis, the Milwaukee, Wisconsin-based company earned $1.55 per share, beating estimates of $1.39, according to Thomson Reuters I/B/E/S.
Revenue rose 7.9 percent to $1.55 billion.
Up to Tuesday’s close, Rockwell’s shares had risen 19.2 percent this year.
Reporting by Arunima Banerjee in Bengaluru; Editing by Arun Koyyur