RBC Bearings (ROLL) Beats Q3 Earnings Estimates, Sales Miss

Machinery company RBC Bearings IncorporatedROLL reported impressive bottom-line results for third-quarter of fiscal 2017 (ended Dec 31, 2016). The company's adjusted earnings came in at 73 cents per share, above the Zacks Consensus Estimate of 70 cents. However, the bottom line was in sync with the year-ago tally.

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Revenues generated in the quarter totaled $146.7 million, up 1.7% year over year but below the Zacks Consensus Estimate of $147.9 million. The rise in revenues can be attributed to 1.2% sales growth in aerospace markets and 2.7% gain in industrial markets.

Exiting the quarter, the company had backlog of $349.1 million, down 0.9% year over year.

During the quarter, the company decided to restructure its industrial manufacturing operations in South Carolina by exiting certain product offerings and consolidating two manufacturing facilities.

Segmental Revenues

RBC Bearings reports its net sales under four heads/segments. The segmental results are briefly discussed below:

Revenues from Plain bearings totaled $65.8 million, up 2.6% year over year while that from Roller bearings fell 0.5% year over year to $26.2 million. Ball bearings' revenues were $13.7 million, up 6.6% year over year. Revenues from Engineered products totaled $41 million, up 0.2% year over year.


In the quarter, RBC Bearings' cost of sales grew 1.1% year over year, representing 62.1% of net sales compared with 62.5% in the year-ago quarter. Gross margin increased 40 basis points (bps) year over year to 37.9%. Selling, general and administrative expenses, as a percentage of revenues were 17.5% compared with 16.5% recorded in the year-ago quarter.

Balance Sheet and Cash Flow

Exiting the fiscal third quarter, RBC Bearings had cash and cash equivalents of $39.5 million, up from $37.5 million at the previous quarter end. Total debt was $294.9 million, down 10.7% sequentially.

In the quarter, the company generated net cash of $36.1 million from its operating activities, up from $21.5 million generated in the year-ago period. Capital spending totaled $4.8 million, decreasing 0.9% year over year.

In the first nine months of fiscal 2017, the company bought back shares worth $4.8 million.

RBC Bearings Incorporated Price and Consensus

RBC Bearings Incorporated Price and Consensus | RBC Bearings Incorporated Quote

Zacks Rank & Other Stocks to Consider

With a market capitalization of approximately $2.14 billion, RBC Bearings Incorporated currently sports a Zacks Rank #1 (Strong Buy). Other stocks worth considering in the industry include Altra Industrial Motion Corp. AIMC , Chart Industries Inc. GTLS and Manitex International, Inc. MNTX . All these stocks sport a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

Altra Industrial Motion Corporation's earnings estimates for 2017 have improved over the last 60 days. Average earnings surprise for the last four quarters is a positive 8.06%.

Chart Industries Inc. has an average positive earnings surprise of 548.51% for the last four quarters.

Manitex International, Inc.'s financial performance has been impressive in the last quarter, with a positive earnings surprise of 225%. Also, earnings estimates for 2017 have been revised upward, over the last 60 days.

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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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