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RBC Bearings Q2 Earnings Beat on Solid Aerospace Revenues

Premium machine tools & accessories company RBC Bearings Inc.ROLL reported mixed results for second-quarter fiscal 2016. The benefits reaped from improved aerospace business, both in terms of commercial original equipment manufacturing and aftermarket functions, were partially offset by weakness in defense & industrial market business.

Earnings came in at 76 cents per share, up 8.6% year over year, and surpassing the Zacks Consensus Estimate of 72 cents. Net sales of $148.7 million increased 32.1% year over year. However, the top line missed the Zacks Consensus Estimate of $156 million.

Rbc Bearings Inc. (ROLL) - Earnings Surprise | FindTheCompany

RBC Bearings' cost of sales during the quarter was $96.6 million, up 32.7% year over year, and representing 64.9% of aggregate revenue.

Adjusted gross margin fell 70 basis points (bps) year over year to 37.9%. Total operating expenses were $28.5 million, up 32.9% year over year.

Exiting the quarter, backlog was $347.8 million compared with $218 million as on Sep 27 2014.

Other Financial Fundamentals

RBC Bearings exited the quarter with total debt of $402.3 million, remarkably up from $9.6 million recorded in the year-ago period.

In second-quarter fiscal 2016, RBC Bearings generated $18.1 million of cash from its operating activities, up from $17.8 million recorded in the prior-year quarter. Capital spending decreased 43.2% year over year to $4.5 million.

Segmental Performance

Plain Bearings revenues were up 17.7% year over year to $67.6 million; while Roller Bearings sales fell 19% to $27.2 million. Ball Bearings sales were $13.1 million, down 6.9% year over year. Engineered Products sales totaled $40.8 million, up remarkably from $7.5 million generated in the year-ago period.

Outlook

RBC Bearings continues to project a positive outlook, expecting benefits reaped from the newly acquired Sargent Aerospace & Defense business as well as superior industrial sales to support growth in revenues and margin, going ahead. The company also intends to enhance its earnings and backlog on the back of greater operational efficiency in the future.

Stocks to Consider

RBC Bearings presently holds a Zacks Rank #4 (Sell). Better-ranked stocks in the industry include Middleby Corp. MIDD , Advanced Emissions Solutions, Inc. ADES and Alarm.Com Holdings, Inc. ALRM . All three stocks carry a Zacks Rank #2 (Buy).

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RBC BEARINGS (ROLL): Free Stock Analysis Report

MIDDLEBY CORP (MIDD): Free Stock Analysis Report

ALARM.COM HLDGS (ALRM): Free Stock Analysis Report

ADV EMISSIONS (ADES): 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 Nasdaq, Inc.


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

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