Rexnord Beats Earnings Est. in 4Q13

Zacks

Rexnord Corporation (RXN), a mechanical components manufacturer, reported weak results for the fourth quarter of fiscal 2013, with adjusted earnings per share of 32 cents, declining 15.8% year over year. However, earnings beat the Zacks Consensus Estimate of 31 cents by a penny.

In fiscal 2013, Rexnord reported adjusted earnings per share of 98 cents, increasing by a penny over the year-ago earnings as well as beating the Zacks Consensus Estimate of 97 cents.

Revenue: Revenue in the reported quarter was flat at $540.3 million, compared with $540.1 million revenue recorded in the year ago quarter. Core sales increased revenue by 1.0% in the quarter, while foreign currency exchange reduced revenue by 1.0%. Revenue missed the Zacks Consensus Estimate of $545.0 million by 0.9%.

On a segmental basis, revenue from Process & Motion Control was recorded at $313.9 million, declining from $324.7 million recorded in the fourth quarter of fiscal 2012. Water Management’s revenue came in at $179.7 million, against $145.0 million in the year-ago comparable quarter.

Revenue for fiscal 2013 amounted to $2,005.1 million, compared with $1,944.2 million in fiscal 2012. The 3.0% increase in revenue was facilitated by a 4.0% increase in the revenue from acquisitions, which was slightly offset by 1.0% decline due to foreign currency exchange. Revenue lagged the Zacks Consensus Estimate of $2,019.0 million by 0.7%.

Costs/Margins: Adjusted EBITDA in the quarter was $115.0 million, against $113.1 million recorded in the year-ago quarter. This led to a 40 basis point increase in the EBITDA margin to 21.3%. Selling, general and administrative expenses, as a percentage of sales, were recorded at 20.1%, declining 70 basis points year over year.

In fiscal 2013, adjusted EBITDA was recorded at $405 million, increasing 5.0% year-over-year, leading to a 40 basis point increase in adjusted EBITDA margin to 20.2%.

Balance Sheet: Exiting the fourth quarter of fiscal 2013, Rexnord’s cash and cash equivalents were recorded at $524.1 million, almost double the $298.0 million recorded in the fiscal fourth quarter 2012. Long-term debt stood at $1,962.3 million, compared with $2,413.4 million recorded in the comparable quarter.

Outlook: Based on the current results, management expects a 1.0%-3.0% increase in the core sales for fiscal 2014. Adjusted EPS is expected to lie in the range of $1.10 to $1.18. For the fiscal first quarter 2014, sales are expected to be in the range of $489.0 million to $499.0 million, with adjusted EPS in the range of 17 cents to 19 cents.

Rexnord currently bears a Zacks Rank #3 (Hold). Other stocks worth a look in the industry are AO Smith Corp. (AOS), carrying a Zacks Rank #1 (Strong Buy). Also, Broadwind Energy, Inc. (BWEN) and Generac Holdings Inc. (GNRC) carry a Zacks Rank #2 (Buy) each.

Read the Full Research Report on AOS

Read the Full Research Report on BWEN

Read the Full Research Report on GNRC

Read the Full Research Report on RXN

Zacks Investment Research



More From Zacks.com
View Comments (0)