Will RBC Bearings (ROLL) Disappoint This Earnings Season? - Analyst Blog

By Zacks Equity Research,

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A leading manufacturer of precision bearings and components, RBC Bearings Inc. ( ROLL ) is slated to release its fiscal first-quarter 2015 (ended Jun 30) results before the opening bell on Aug 7, 2014. In the preceding quarter, it delivered a positive earnings surprise of 2.82%. Let's see how things are shaping up prior to this announcement.

Factors to Consider

RBC Bearings' aircraft and defense products' revenues have been witnessing a rise for the past few quarters, backed by higher aircraft build rates as well as aftermarket sales. With continued increase in demand of aircraft products along with acceptance of several large product programs, the company is poised to reap further benefits from these segments.

The company has also been growing inorganically, with its various acquisitions expected to contribute roughly $25 million to the annual revenues. Moreover, RBC Bearings is attempting to reward its shareholders through dividend payments. The company, in the near future, intends to use excess cash and earnings for expansion and development of its existing business.

Earnings Whispers

Our proven model does not conclusively show that RBC Bearings is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as we will see below.

Zacks ESP: RBC Bearings' Most Accurate Estimate stands in line with the Zacks Consensus estimate of 70 cents. This results in an Earnings ESP of 0.00%.

Zacks Rank #3 (Hold): RBC Bearings has a Zacks Rank #3 (Hold) which, when combined with a 0.00% ESP makes surprise prediction difficult. We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.

Other Stocks to Consider

Here are some other companies in the industry you may want to consider on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter:

AU Optronics Corp. ( AUO ), Earnings ESP of +7.14% and a Zacks Rank #3.

Nordson Corporation ( NDSN ), Earnings ESP of +1.77% and a Zacks Rank #3.

Kaiser Aluminum Corporation ( KALU ), Earnings ESP of +0.99% and a Zacks Rank #3.

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RBC BEARINGS (ROLL): Free Stock Analysis Report

NORDSON CORP (NDSN): Free Stock Analysis Report

AU OPTRONCS-ADR (AUO): Free Stock Analysis Report

KAISER ALUMINUM (KALU): 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 Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Stocks: ROLL , NDSN , AUO , KALU

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