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RBC Bearings (ROLL) Q4 Earnings Beat Estimates, Decline Y/Y

·4 min read

RBC Bearings Incorporated ROLL delivered impressive results for the fourth quarter of fiscal 2021 (ended Apr 3, 2021). The company’s earnings beat estimates by 0.93% and sales exceeded the same by 0.83%.

Adjusted earnings in the reported quarter were $1.08 per share, surpassing the Zacks Consensus Estimate of $1.07. Also, the bottom line decreased 18.8% from the year-ago quarter’s figure of $1.33 on weak sales and a margin decline.

For fiscal 2021, the company’s adjusted earnings were $3.87 per share, down 23.7% from the year-ago figure of $5.07.

Revenue Details

In the reported quarter, RBC Bearings’ net sales were $160.3 million, declining 13.7% year over year due to the adverse impacts of the pandemic on operations.

The company’s overall aerospace business experienced a 28.6% decline in revenues. However, its business in industrial markets improved and recorded a 12.9% year-over-year increase in revenues.

The top line surpassed the Zacks Consensus Estimate of $159 million.

Exiting the reported quarter, the company had a backlog of $394.8 million, down 17.5% year over year.

RBC Bearings reports net sales under four heads/segments that are discussed below:

Revenues in Plain bearings totaled $74.7 million, down 20.4% year over year, while that for Roller bearings declined 21% year over year to $24.8 million. Ball bearings’ revenues of $23.1 million were up 12% year over year. Revenues in Engineered products summed $37.7 million, down 5.6% year over year.

For fiscal 2021, the company’s net sales were $609 million, reflecting a year-over-year decline of 16.3%.

Margin Picture

In the reported quarter, RBC Bearings’ cost of sales decreased 10.5% year over year to $97.8 million, representing 61% of net sales compared with 58.8% a year ago. Adjusted gross profit decreased 18.2% year over year to $62.7 million. Margin slipped 220 basis points (bps) to 39.1%.

Selling, general and administrative expenses of $27.4 million were down 11.5% year over year, accounting for 17.1% of net sales. Adjusted operating income declined 24.3% year over year to $32.5 million. Adjusted margin decreased 280 bps year over year to 20.3%. Interest expenses, net, declined 16% year over year to $0.3 million in the reported quarter.

Effective tax rate was 15.8% in the quarter under review compared with 21.4% in the prior-year quarter.

Balance Sheet and Cash Flow

Exiting the fiscal fourth quarter, RBC Bearings had cash and cash equivalents of $151.1 million, up 19.7% from $126.2 million recorded at the end of the previous quarter. Long-term debt was $13.5 million, down 6.3% sequentially.

In fiscal 2021, the company generated net cash of $152.5 million from operating activities, down 2% from $155.6 million in the previous year. Capital spending of $11.8 million fell 68.4% year over year.

In the fiscal year, the company repurchased shares worth $6.9 million, down from $12.2 million in the previous year.

Outlook

For the first quarter of fiscal 2022 (ending June 2021), RBC Bearings anticipates net sales of $154-$158 million.

RBC Bearings Incorporated Price, Consensus and EPS Surprise

RBC Bearings Incorporated Price, Consensus and EPS Surprise
RBC Bearings Incorporated Price, Consensus and EPS Surprise

RBC Bearings Incorporated price-consensus-eps-surprise-chart | RBC Bearings Incorporated Quote

Zacks Rank & Stocks to Consider

With a market capitalization of $4.7 billion, RBC Bearings currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the industry are Luxfer Holdings PLC LXFR, Tennant Company TNC and Applied Industrial Technologies, Inc. AIT. While Luxfer and Tennant presently sport a Zacks Rank #1 (Strong Buy), Applied Industrial carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 30 days, earnings estimates for the companies have improved for the current year. Further, positive earnings surprise in the last reported quarter was 62.50% for Luxfer, 82.81% for Tennant and 35.64% for Applied Industrial.

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