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Rockwell Automation, Inc. (ROK) — this company's answers

The model's full reasoning — Q4 2017 call → NOWe need to determine if the dynamic described is present. The question asks about a recently emerged positive element of the business, probed by analysts, and management responds with unhesitating, granular operational command, answering follow-ups with specific present-tense working detail, while conveying that the element's contribution is still early. Also requires at least two exchanges with added substance, and management conveys most of the effect lies ahead. Let's identify a recently emerged positive element. The transcript mentions several: oil and gas returning to growth, powertrain and EV, Connected Enterprise, process business, etc. But we need to see if analysts probe one of these and management gives granular operational detail. Look at the Q&A. The first question from Jeff Sprague asks about restructuring and FX, and then about investment spending and strategic direction. Not really about a specific new element. John Inch asks about China slowdown, then about Emerson and process. Not exactly. Rich Kwas asks about automotive and powertrain/EV. Blake responds: "we see it as very positive. When you combine the powertrain business that we've been talking about for the last few years as $20 million of additional revenue each year and you add the activity going on at many of those same-tier suppliers with electric vehicles, in 2018, we expect the contribution from powertrain and EV to be $100 million worth of business in our automotive segment. So it's big enough to be meaningful and we continue to see those high growth rates. We're competing and winning around the world at those customers. And that's definitely providing a boost to the traditional internal combustion assembly business that we've enjoyed for a long time in automotive." Then Rich asks if it's incremental, and Blake says "Absolutely. I mean, three or four years ago, that was a zero." Then Patrick adds guidance for automotive growth below company average. That's two exchanges? Actually Rich asks a follow-up: "And that's incremental on top of what you would normally get..." Blake answers. So that's two exchanges about powertrain/EV. But is this a recently emerged positive element? Yes, it's new within last few years, and management says it's $100 million in 2018, and it's still early? They say it's meaningful and growing.

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