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RBC Bearings (ROLL) Q1 Earnings and Revenues Top Estimates

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RBC Bearings Incorporated reported mixed first-quarter fiscal 2022 (ended Jul 2, 2022) results. ROLL’s earnings surpassed the Zacks Consensus Estimate by 27.9% and quarterly sales beat the same by 0.8%.

Adjusted earnings in the quarter under review were $1.79 per share, surpassing the Zacks Consensus Estimate of $1.40. The bottom line increased 72.1% from the year-ago figure of $1.04, supported by higher revenues.

Revenue Details

In the quarter under review, RBC Bearings’ revenues were $354.1 million, reflecting an increase of 126.7% from the year-ago quarter’s level. Organic sales grew 13.1% from the year-ago quarter’s level.

While exiting the reported quarter, ROLL had a backlog of $635.7 million, up 5.4% sequentially.

RBC Bearings’ revenues beat the Zacks Consensus Estimate of $351 million and were lower than management’s projection of $355-$365 million.

ROLL currently has two reportable segments, namely Aerospace/Defense and Industrial. Its segmental performance for the fiscal first quarter is briefly discussed below:

Industrial revenues of $254.7 million (representing 71.9% of the quarter’s revenues) were up 286.8% year over year, including the impacts of the DODGE buyout.

Aerospace/Defense revenues totaled $99.4 million (representing 28.1% of the quarter’s revenues), increasing 10% year over year.

Margin Profile

In the reported quarter, RBC Bearings’ cost of sales increased 130.4% year over year to $212.9 million, representing 60.1% of net sales compared with 59.2% a year ago. Gross profit increased 121.3% to $141.2 million. Margin decreased 90 basis points (bps) to 39.9%.

Selling, general and administrative expenses of $55.8 million were up 78.8% year over year, representing 15.8% of the quarter’s net sales. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $100.7 million, increasing 122.3%. The EBITDA margin is 28.4%, down 60 bps year over year.

Adjusted operating income increased 128.5% to $68.3 million. Adjusted margin increased 20 bps to 19.3%. Net interest expenses were $15.8 million compared with $0.3 million in the year-ago quarter.

Balance Sheet and Cash Flow

At the time of exiting the fiscal first quarter, RBC Bearings had cash and cash equivalents of $119.6 million, down from $182.9 million at the end of the previous quarter. Total debt was $1,565.3 million, down from $1,688.3 million at the end of the earlier quarter.

In the first three months of fiscal 2023, RBC Bearings 1generated net cash of $59 million from operating activities, increasing 10.7% from the previous-year period’s number. Capital expenditure was $7.9 million, increasing 132.4%.

In the first three months, RBC Bearings repurchased shares for $6 million, increasing 4.8% year over year.

Outlook

For the second quarter of fiscal 2023 (ending September 2022), RBC Bearings anticipates net sales of $355-$365 million, suggesting an increase of 121-127% from the year-ago figure of $160.9 million.

Zacks Rank & Stocks to Consider

RBC Bearings currently carries a Zacks Rank #4 (Sell).

Some better-ranked companies from the industrial products sector are discussed below:

Greif, Inc. (GEF - Free Report) presently sports a Zacks Rank #1 (Strong Buy). GEF delivered a trailing four-quarter earnings surprise of 22.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.

GEF’s earnings estimates have increased 17.8% for fiscal 2022 (ending October 2022) in the past 60 days. Its shares have risen 17.9% in the past six months.

Titan International, Inc. presently flaunts a Zacks Rank of 1. Its earnings surprise in the last four quarters was 47%, on average.

In the past 60 days, TWI’s earnings estimates have increased 39.5% for 2022. The stock has surged 39.8% in the past six months.

Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank #2 (Buy). VMI’s earnings surprise in the last four quarters was 13.7%, on average.

In the past 60 days, Valmont’s earnings estimates have increased 3.8% for 2022. The stock has rallied 27.3% in the past six months.


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