A month has gone by since the last earnings report for RBC Bearings Incorporated . Shares have lost nearly 6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Third-Quarter Fiscal 2017 Highlights
RBC Bearings Inc. reported impressive bottom-line results for third-quarter of fiscal 2017 (ended Dec 31, 2016).
The company’s adjusted earnings came in at $0.73 per share, above the Zacks Consensus Estimate of $0.70. However, the bottom line was in sync with the year-ago tally.
Revenues: Revenues generated in the quarter totaled $146.7 million, up 1.7% year over year, but came in 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.
Margins/Costs: 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 expanded 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.
Segmental Performance: 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 edged down 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.
Other Financial Fundamentals: 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.
Outlook: RBC Bearings continues to project a positive outlook. The company estimates that higher demand for aerospace products and certain specific industrial products would drive its revenues in the near term. Further, earnings and backlog would likely improve on higher sales and greater operational efficiency.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, RBC Bearings' stock has an average Growth Score of 'C', however its Momentum is doing a bit better with a 'B'. However, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
The stock has Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.
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Why Is RBC Bearings (ROLL) Down 6% Since the Last Earnings Report?
A month has gone by since the last earnings report for RBC Bearings Incorporated . Shares have lost nearly 6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Third-Quarter Fiscal 2017 Highlights
RBC Bearings Inc. reported impressive bottom-line results for third-quarter of fiscal 2017 (ended Dec 31, 2016).
The company’s adjusted earnings came in at $0.73 per share, above the Zacks Consensus Estimate of $0.70. However, the bottom line was in sync with the year-ago tally.
Revenues: Revenues generated in the quarter totaled $146.7 million, up 1.7% year over year, but came in 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.
Margins/Costs: 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 expanded 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.
Segmental Performance: 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 edged down 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.
Other Financial Fundamentals: 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.
Outlook: RBC Bearings continues to project a positive outlook. The company estimates that higher demand for aerospace products and certain specific industrial products would drive its revenues in the near term. Further, earnings and backlog would likely improve on higher sales and greater operational efficiency.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
RBC Bearings Incorporated Price and Consensus
RBC Bearings Incorporated Price and Consensus | RBC Bearings Incorporated Quote
VGM Scores
At this time, RBC Bearings' stock has an average Growth Score of 'C', however its Momentum is doing a bit better with a 'B'. However, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
The stock has Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.