Rexnord Q2 Earnings Beat Estimates - Analyst Blog

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Rexnord Corporation ( RXN ) reported earnings per share, adjusted for one-time items, of 24 cents for the first quarter of fiscal 2014 (ended Jun 29, 2013). Results were a cent above 23 cents earned in the year-ago quarter and also surpassed the Zacks Consensus Estimate of 20 cents per share.

Including one-time adjustments, GAAP earnings per share in the quarter were 14 cents versus 2 cents loss reported in the year-ago quarter.

Revenue

Rexnord's net sales increased 3.1% year over year to $508.7 million in the first quarter. The increase can be attributed to healthy performance at the company's business segments.

Process & Motion Control sales in the first quarter increased 0.2% to $314.6 million while sales at Water Management business were $194.1 million, up 8.0% year over year.  

Margins

Cost of sales in the first quarter increased 3.8% year over year and represented 64.2% of total revenue; up from 63.8% in the year-ago quarter. Gross margin came in at 35.8%. Selling, general and administrative expenses, as a percentage of total revenue, stood at 21.0%.

Balance Sheet

Exiting the first quarter of fiscal 2014, Rexnord's cash and cash equivalents stood at $334.9 million compared with $524.1 million in the previous quarter. Long-term debt registered a slight decline sequentially and came in at $1,961.4 million at the end of the quarter.

Cash Flow

In the first quarter of fiscal 2014, Rexnord used $27.3 million of net cash for operating activities as compared with $37.9 million used in the year-ago quarter. Capital spending compared with the year-ago quarter was roughly half at $7.8 million.

Outlook

For full fiscal year 2014, management of Rexnord increased its core sales growth guidance from 1%-3%, to 2%-4%. Earnings per share guidance were also raised at the lower end from $1.10-$1.18, to $1.12-$1.18. Tax rate is expected to be within 31%-33% range.

For the second quarter of fiscal 2014, sales are anticipated to be within $510-$520 million and adjusted earnings per share within 23-25 cents range. Tax rate is expected to be 35%.

Rexnord Corporation is a well-known mechanical components manufacturer and currently has a $1.9 billion market capitalization. The stock currently has a Zacks Rank #2 (Buy). Other stocks to watch out for are AO Smith Corp. ( AOS ) and Lennox International, Inc. ( LII ), each with a Zacks Rank #1 (Strong Buy) while Plug Power Inc. ( PLUG ) has a Zacks Rank #2 (Buy).



SMITH (AO) CORP (AOS): Free Stock Analysis Report

LENNOX INTL INC (LII): Free Stock Analysis Report

PLUG POWER INC (PLUG): Free Stock Analysis Report

REXNORD CORP (RXN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: AOS , LII , PLUG , RXN

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