RBC Bearings (ROLL) Beats Q3 Earnings & Revenue Estimates

RBC Bearings Incorporated ROLL reported better-than-expected results for third-quarter fiscal 2018 (ended Dec 30, 2017).

Earnings and Revenues

Quarterly adjusted earnings came in at $1.05 per share, beating the Zacks Consensus Estimate of 86 cents. The top line also comfortably exceeded the year-ago tally of 73 cents per share.

Net sales in the reported quarter came in at $166.9 million, surpassing the Zacks Consensus Estimate of $163 million. In addition, the top line came in 13.8% higher than the year-ago figure. The upswing stemmed from strong demand secured from the industrial and aerospace end-markets.

Segmental Performance                 

Plain Bearingsrevenues improved 6% year over year to $69.8 million, while Roller Bearings sales climbed 24.2% to $32.5 million. Ball Bearings sales came in at $16.5 million, up 20.4% year over year. Engineered Productssales improved 17.4% year over year to $48.1 million.

RBC Bearings Incorporated Price, Consensus and EPS Surprise

 

RBC Bearings Incorporated Price, Consensus and EPS Surprise | RBC Bearings Incorporated Quote

Costs and Margins

Cost of sales in the reported quarter came in at $102.2 million, up 8.4% year over year. Adjusted gross margin came in at 38.8%, expanding 90 basis points (bps) year over year. The upside was driven by the company’s cost-reduction initiatives, consolidation programs and production-process improvements.

Selling, general and administrative expenses during the quarter came in at $28.2 million, up 9.5% year over year. Adjusted operating margin came in at 20.5% during the fiscal third quarter, up 170 bps year over year.

Other Financial Fundamentals

Existing the fiscal third quarter, RBC Bearings had cash and cash equivalents worth $43.8 million compared to $38.9 million recorded as of Apr 1, 2017.

In the nine-month period ended fiscal 2018, RBC Bearings generated $92.5 million of cash from its operating activities as against $74.6 million in the prior-year quarter. Capital spending escalated 42.5% year over year to $20.5 million.

In the nine-month period ended fiscal 2018, the company’s total debt came in at $198 million, lower than $294.9 million recorded on Dec 31, 2016.

Outlook

RBC Bearings intends to boost its near-term competency on the back of sturdier industrial and aerospace sales as well as disciplined cost-reduction measures. This Zacks Rank #2 (Buy) company anticipates to generate revenues in the range of $172-$175 million in fourth-quarter fiscal 2018 (estimating year-over-year growth of 7.4-9.2%).

Other Stocks to Consider

Some top-ranked stocks in the same space are listed below:

Applied Industrial Technologies, Inc. AIT currently sports a Zacks Rank #1 (Strong Buy). The company’s earnings per share (EPS) are projected to grow 12% in the next three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.

Colfax Corporation CFX carries a Zacks Rank #1. The company’s EPS is projected to grow 12.3% in the next three to five years.

Dover Corporation DOV carries a Zacks Rank #1. The company’s EPS is projected to grow 13% in the next three to five years.

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