Rockwell Automation, Inc.

Thank you for holding, and welcome to Rockwell Automation's quarterly conference call. I need to remind everyone that today's conference call is being recorded. Later in the call, we will open up the lines for questions. If you have a question at that time, please press star, then 1. At this time, I would like to turn the call over to Steve Edsel, Vice President of Investor Relations and Treasurer. Mr. Edsel, please go ahead.

Good morning, and thank you for joining us for Rockwell Automation's second quarter fiscal 2019 earnings release conference call. With me today is Blake Moret, our chairman and CEO, and Patrick Gorath, our CFO. Our results were released earlier this morning, and the press release and charts have been posted to our website. Both the press release and charts include reconciliations to non-GAAP measures. A webcast of this call will be available at that website for replay for the next 30 days. Before we get started, I need to remind you that our comments will include statements related to the expected future results of our company and are, therefore, forward-looking statements. Our actual results may differ materially from our projections due to a wide range of risks and uncertainties that are described in our earnings release and detailed in all of our SEC filings. So, with that, I'll hand the call over to Blake.

Thanks, Steve. Good morning, everyone. Thank you for joining us on the call today. I'll start with some key points for the quarter, so please turn to page three in the slide deck. Our results for the quarter reflect profitable growth in all regions, led by strong process industry performance. We saw accelerating growth in information solutions and connected services, reflecting adoption of the connected enterprise. Our growth was tempered by weaker than expected automotive sales, which were down about 20% year over year. This impacted our product sales in the quarter, particularly in North America. In this region, we saw strong product growth in January. February was weak, with orders picking up in late March. Globally, organic sales were up 3.6%. From a vertical perspective, Growth was once again led by heavy industries, which grew high single digits, and consumer, which grew mid single digits. Heavy industries growth was led by oil and gas, pulp and paper, and mining. Oil and gas grew double digits. In consumer, life sciences was very strong. I already mentioned automotive, but within transportation, tire grew nicely. of double digits. Our KPI for process sales grew 10% organically. The weakness in automotive drove a 2% decline in logics. Commenting on regional performance in the quarter, North America, which for us is the combination of the US and Canada, grew 2% organically. While automotive weakness significantly impacted the overall growth rate for this region, growth was broad-based across a wide range of industries. In pulp and paper, we won a significant process and power control order this quarter with Green Bay Packaging. EMEA was up over 5% in the quarter, led by consumer and tire. Asia grew about 4%, led by heavy industries and automotive. China grew 6.5%. Latin America sales were up 13%, led by heavy industries. I'll make a few additional comments about our Q2 results. Adjusted EPS was up 8%, and segment operating margin expanded 40 basis points year over year. Book-to-bill performance for our solutions and services businesses was 1.09 in Q2. Backlog remains high. Patrick will elaborate on our second quarter financial performance in his remarks. Let's move on now to guidance for full year fiscal 2019. Forecasts continue to call for industrial production growth. We continue to see broad-based growth with strong financial performance. However, given the weakness in automotive, we are reducing the high end of our guidance range for organic sales growth and adjusted EPS. We expect our fiscal 2019 organic sales to be up 4.5% year-over-year at midpoint of guidance. Currency is now expected to reduce growth by 2 percentage points. including the revised impact of currency, our fiscal 2019 guidance is sales of about $6.8 billion. Midpoint of the updated adjusted EPS guidance range is now $9, compared to $9.05 in previous guidance. As Patrick will discuss in a few minutes, this guidance does not include the impacts of the Centsia joint venture. Moving on to slide four, I'll provide an update on two recent strategic investments to increase long-term value for our customers and shareholders. Our strategic partnership with PTC is progressing well. We're winning profitable new business across all focus industries and geographies, and some of our engagements are expanding to multi-site rollouts, even in automotive. where overall spending is down, customers are excited about our FactoryTalk Innovation Suite. Recently, Ford decided to expand this new offering to additional locations. Another customer, eCarX, an affiliate of Geely Auto Group, chose the FactoryTalk Innovation Suite to improve production management and quality. In consumer, Rockwell Automation is partnering with Stanley, Black, and Decker to bring the connected enterprise to life through their Manufactory 4.0 digital manufacturing vision. As shown on the right side of the slide, in February, we announced that we will be forming the Sensia joint venture with Schlumberger, creating the oil and gas industry's first fully integrated automation solutions provider for the digital oil field. The announcement has been well received by target customers. Activities to form the joint venture are well underway. Now I'll turn it over to Patrick to provide more detail around our Q2 results and our 2019 sales and earnings guidance.