Rockwell’s Orders from Asia Picking Up

Costa Mesa-based Rockwell International Corp., the largest maker of automated controls, sees Asia becoming a “bright spot” for sales and orders, an indication that the region may be emerging from its recent economic trauma, the president of Rockwell’s automation unit said Tuesday.

Orders in the Asia-Pacific region, outside Japan, are increasing at high single-digit growth rates, an improvement from 1998, Keith Nosbusch, Rockwell’s automation unit president, told the Bloomberg Forum. Japan remains weak, he said.

Rockwell’s sales have slowed as declines in the Asian and Latin American economies have left its customers with less money to spend on capital equipment such as the automated controls used to run factory machinery. The pulp-and-paper and metals industries were particularly hard-hit, he said.

“Most of the financial trauma has occurred in the countries of that region, and most of them are coming out of it, and continuing now to move in the investment cycle,” Nosbusch said.

Rockwell, which also sells equipment for airplane cockpits, is seeing the start of a slowdown in some parts of Europe, where it has enjoyed double-digit revenue growth for the last several years, he said.

“We’re going to be sensitive to a slowing in a couple of the economies in that region, particularly in Germany,” he said. “We want to be cautious about Europe and the impact it may have outside of that region.”

Growth in Latin America, which had been strong for Rockwell automation over the last couple of years, is slowing in part because of the devaluation of the Brazilian real. Other parts of the region, including Mexico and Venezuela, have been strong this year, he said.

Fiscal second-quarter orders for the period ended March 31 are improving from the first quarter and should be equal to or slightly ahead of orders in the year-ago quarter, he said.

Rockwell Automation wants to increase the revenue it receives from services such as consulting, program-and-project management and asset management from 10% to 25% of its total revenue in five to seven years. The automation unit, based in Milwaukee, accounted for $4.6 billion of Rockwell’s fiscal 1998 revenue of $6.8 billion.

Rockwell said earlier this year that it will move its corporate headquarters to Milwaukee.

Rockwell’s fiscal first-quarter profit rose 8.9% to $134 million, or 70 cents a share, for the quarter ended Dec. 31, after a gain and charges. Revenue rose to $1.61 billion from $1.60 billion in the year-ago quarter.