Rexnord Q2 Earnings Beat Estimates - Analyst Blog


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.


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.  


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.


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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Zacks Investment Research

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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