Premium machine tools & accessories company RBC Bearings Incorporated ROLL reported mixed results for second-quarter fiscal 2018 (ended Sep 30, 2017).
Earnings and Revenues
Quarterly adjusted earnings came in at 83 cents per share, missing the Zacks Consensus Estimate of 85 cents. However, the bottom line came in higher than the year-ago tally of 78 cents per share.
Net sales in the reported quarter came in at $164.3 million, surpassing the Zacks Consensus Estimate of $162 million. In addition, the top line came in 6.7% higher than the year-ago figure. The upswing stemmed from sturdy industrial sales growth.
Plain Bearings revenues improved 5.2% year over year to $72.4 million, while Roller Bearings sales climbed 20.6% to $32.3 million. Ball Bearings sales came in at $16.5 million, up 13.1% year over year. However, Engineered Products sales edged down 1.4% year over year to $43.1 million.
RBC Bearings Incorporated Price, Consensus and EPS Surprise
RBC Bearings Incorporated Price, Consensus and EPS Surprise | RBC Bearings Incorporated Quote
Costs and Margins
Cost of sales in the reported quarter came in at $102.5 million, up 5.4% year over year. Adjusted gross margin came in at 37.6%, expanding 70 basis points (bps) year over year. The upside was driven by the company’s cost-reduction initiatives, consolidation programs and production-process improvements.
Selling, general and administrative expenses during the quarter came in at $27.6 million, up 9.6% year over year. Adjusted operating margin came in at 19.3% during the fiscal second quarter, flat year over year.
Other Financial Fundamentals
Existing the fiscal second quarter, RBC Bearings had cash and cash equivalents worth $42.9 million compared to $38.9 million recorded as of Apr 1, 2017.
In the reported quarter, RBC Bearings generated $24.2 million of cash from its operating activities as against $19.3 million in the prior-year quarter. Capital spending escalated 57.3% year over year to $7 million.
In the first half of fiscal 2018, the company’s total debt came in at $220.2 million, lower than $330.1 million recorded on Oct 1, 2016.
During the reported quarter, RBC Bearings decided to restructure its production facility in Montreal, Canada. The company intends to close its Montreal facility and combine certain residual assets in other locations by the end of fiscal 2018.
Based on the existing market conditions, the company anticipates to generate revenues within the range of $162-$163 million in third-quarter fiscal 2018 (estimating year-over-year top-line growth of 10.5-11.1%).
Stocks to Consider
RBC Bearings currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry are listed below:
TASER International, Inc. AAXN currently carries a Zacks Rank of 2 (Buy) and has a positive average earnings surprise of 45.61% for the last four quarters. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Acco Brands Corporation ACCO also holds a Zacks Rank of 2 and pulled off a positive average earnings surprise of 81.89% over the trailing four quarters.
Altra Industrial Motion Corp. AIMC carries a Zacks Rank of 2 and recorded a positive average earnings surprise of 17.30% during the same time frame.
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