U.S. Markets close in 5 hrs 17 mins
  • S&P 500

    3,831.01
    -0.38 (-0.01%)
     
  • Dow 30

    30,964.35
    -3.47 (-0.01%)
     
  • Nasdaq

    11,334.93
    +12.70 (+0.11%)
     
  • Russell 2000

    1,729.00
    -12.33 (-0.71%)
     
  • Crude Oil

    96.64
    -2.86 (-2.87%)
     
  • Gold

    1,753.50
    -10.40 (-0.59%)
     
  • Silver

    19.15
    +0.03 (+0.15%)
     
  • EUR/USD

    1.0178
    -0.0092 (-0.8957%)
     
  • 10-Yr Bond

    2.8620
    +0.0530 (+1.89%)
     
  • Vix

    27.73
    +0.19 (+0.69%)
     
  • GBP/USD

    1.1892
    -0.0060 (-0.4983%)
     
  • USD/JPY

    135.8330
    -0.0090 (-0.0066%)
     
  • BTC-USD

    20,166.32
    +621.97 (+3.18%)
     
  • CMC Crypto 200

    436.84
    +1.31 (+0.30%)
     
  • FTSE 100

    7,134.80
    +109.33 (+1.56%)
     
  • Nikkei 225

    26,107.65
    -315.82 (-1.20%)
     

Barnes Group (B) Q4 Earnings Surpass Estimates, Revenues Miss

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·5 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Barnes Group Inc. B reported mixed fourth-quarter 2021 results, wherein its earnings surpassed estimates by 19.6%, but sales missed the same by 1.3%.

Its adjusted earnings in the reported quarter were 55 cents per share, surpassing the Zacks Consensus Estimate of 46 cents. Also, the bottom line increased 52.8% from the year-ago quarter figure of 36 cents on the back of higher sales generation.

In 2021, the company’s earnings came in at $1.94, an increase of 18.3% on a year-over-year basis.

Top-Line Results

In the reported quarter, Barnes’ net sales increased 8% year over year to $311 million. Organic sales in the quarter grew 9% on strengthening segmental businesses.

The company’s revenues missed the Zacks Consensus Estimate of $315 million.

Barnes reports revenues under two heads — Industrial and Aerospace. A brief snapshot of the segmental sales is provided below:

Revenues generated from Industrial amounted to $210.3 million, increasing 1% year over year. The segment gained from strengthening end-market businesses. Organic sales were up 3% year over year, and movements in foreign currencies had a negative impact of 2%.

Aerospace’s sales were $100.7 million in the fourth quarter, up 26% from the year-ago quarter on the back of improvement in the aerospace markets.

Aftermarket sales were up 45% year over year, while that for original equipment manufacturing increased 18%.

In 2021, the company’s revenues came in at $1,258.8 million, up 12% year over year.

Barnes Group, Inc. Price, Consensus and EPS Surprise

Barnes Group, Inc. Price, Consensus and EPS Surprise
Barnes Group, Inc. Price, Consensus and EPS Surprise

Barnes Group, Inc. price-consensus-eps-surprise-chart | Barnes Group, Inc. Quote

Margin Profile

In the reported quarter, Barnes’ cost of sales increased 6.3% year over year to $200.9 million. The cost of sales represented 64.6% of net sales versus 65.4% in the year-ago quarter. Selling and administrative expenses increased 10.8% to $74.7 million and represented 24% of net sales.

Adjusted operating income in the reported quarter increased 7.7% year over year to $35.4 million, whereas margins were stable at 11.4%. Growth in sales was offset by high labor, raw material and freight costs. Interest expenses totaled $3.8 million in the reported quarter, down 6.3% year over year.

The effective tax rate in 2021 was 21.9%, lower than 37.6% a year ago.

Balance Sheet & Cash Flow

Exiting the fourth quarter, Barnes’ cash and cash equivalents were $102.9 million, up 10.1% from $93.5 million recorded in the last reported quarter. Long-term debt was $599.9 million, reflecting a 4.6% decline from $628.7 million in the last reported quarter.

In 2021, the company repaid long-term debt of $115.5 million. Proceeds from the issuance of long-term debts were $48.3 million. Liquidity available in the quarter included cash of $103 million and credit under revolving facilities of $505 million.

In 2021, the company generated net cash of $167.8 million from operating activities, down 22.1% from the year-ago period. Capital expenditure totaled $34.1 million, decreasing 16.2%. Free cash flow was $133.7 million versus $174.8 million in the previous year.

In 2021, Barnes paid out dividends of $32.4 million, flat year over year. Shares worth $5.2 million were repurchased in the year.

Outlook

For 2022, Barnes anticipates adjusted earnings of $2.20-$2.45, suggesting a year-over-year increase of 19.8% on a mid-point basis.

Organic sales for the year are expected to rise 8-10% on a year-over-year basis. Movements in foreign currencies are expected to hurt sales by 2%.

The adjusted operating margin is predicted to be 13-14%. The company anticipates a capital expenditure of about $60 million. Cash conversion is expected to exceed 100% of net income. The effective tax rate for 2022 is expected to be 25.5-26.5%.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked companies are discussed below.

Griffon Corporation GFF presently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. It delivered a four-quarter earnings surprise of 16.20%, on average.

Griffon’s earnings estimates increased 9.9% for fiscal 2022 (ending September 2022) in the past 30 days. Its shares have lost 13.5% in the past three months.

Franklin Electric Co., Inc. FELE presently sports a Zacks Rank #1. Its earnings surprise in the last four quarters was 17.44%, on average.

In the past 30 days, Franklin Electric’s earnings estimates have increased 10.9% for 2022. FELE’s shares have lost 11.9% in the past three months.

AZZ Inc. AZZ presently carries a Zacks Rank #2 (Buy). Its earnings surprise in the last four quarters was 16.90%, on average.

AZZ’s earnings estimates have been stable for fiscal 2022 (ending February 2022) in the past 30 days. AZZ’s shares have declined 12.2% in the past three months.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AZZ Inc. (AZZ) : Free Stock Analysis Report

Barnes Group, Inc. (B) : Free Stock Analysis Report

Franklin Electric Co., Inc. (FELE) : Free Stock Analysis Report

Griffon Corporation (GFF) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research