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Barnes Group Inc. B provided an update related to its restructuring actions, considering the impacts of the coronavirus pandemic on its operational performance. Its share price increased 1.4% yesterday, eventually closing the trading session at $39.81.
As communicated, the company will likely take a restructuring charge of about $18 million mainly related to severance costs in the second quarter of 2020. It is worth noting here that Barnes Group expects the charge to have a minor impact on cash in the second quarter and an impact of around $10 million on cash in the second half of this year. Notably, the company anticipates witnessing the remaining cash impact in the next year.
In addition, Barnes Group stated that its cost-reduction actions include the reduction of its global workforce by around 8%. Notably, reductions in the workforce will help it to generate around $30 million of annualized cost savings, with savings realization likely to commence in the second half of this year.
Notably, the company is set to release second-quarter 2020 results on July 28, before market open, where it will give an update of its business operations.
In the past 60 days, the Zacks Consensus Estimate for Barnes Group’s earnings has declined 4.5% to 21 cents for second-quarter 2020 on one downward estimate revision against none upward.
Zacks Rank, Price Performance and Estimate Trend
Barnes Group, with a $2-billion market capitalization, currently carries a Zacks Rank #4 (Sell). Persistent weakness in the Industrial segment remains concerning for the company. Also, 737 MAX-related issues and lower aircraft demand are likely to have an adverse impact on the performance of its Aerospace segment’s OEM business.
Over the past six months, the company’s share price has decreased 36.7% compared with the industry’s decline of 9.8%.
In the past 60 days, the Zacks Consensus Estimate for Barnes Group’s earnings has declined 4.9% to $1.75 for 2020 on one downward estimate revision against none upward.
Stocks to Consider
Some better-ranked stocks from the same space are Altra Industrial Motion Corp. AIMC, Chart Industries, Inc. GTLS and Ingersoll Rand Inc. IR. All the companies currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Altra Industrial delivered a positive earnings surprise of 9.78%, on average, in the trailing four quarters.
Chart Industries delivered a positive earnings surprise of 1.41%, on average, in the trailing four quarters.
Ingersoll Rand delivered a positive earnings surprise of 3.47%, on average, in the trailing four quarters.
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