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Regal Beloit (RBC) Q2 Earnings Miss Estimates, Sales Up Y/Y
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Regal Beloit Corporation (RBC - Free Report) reported mixed results for the second quarter of 2018.
On a GAAP basis, the industrial goods manufacturer reported net income of $65.9 million or $1.50 per share compared with $53 million or $1.18 per share in the year-earlier quarter. The improvement came on the back of higher revenues across segments.
Adjusted earnings were $1.60 per share compared with $1.29 in the year-ago quarter. However, the bottom line missed the Zacks Consensus Estimate of $1.61.
Net sales increased to $959.7 million from $869.2 million in the year-earlier quarter, driven by strong organic sales growth across all three operating segments. Moreover, quarterly revenues beat the Zacks Consensus Estimate of $953.7 million.
GAAP operating income improved to $99.6 million from $83.2 million in the prior-year quarter. Adjusted operating income was $106.1 million compared with $90.6 million in the year-ago quarter. Adjusted operating margin came in at 11.1%, up 70 basis points year over year.
Regal Beloit Corporation Price, Consensus and EPS Surprise
Revenues from Power Transmission Solutions increased 11.6% year over year to $213.4 million. Sales were driven by rise in demand in the oil & gas, material handling, and aerospace end markets. Operating margin at the segment increased to 11.8% from 11.6% in the prior-year quarter.
Net sales from Commercial and Industrial Systems were $469 million, up 15.1% year over year, driven by strength in commercial HVAC (heating, ventilation and air conditioning), oil & gas and power generation and Asia. Operating margin at the segment increased to 6.5% from 5.1% in the prior-year quarter.
Net sales from Climate Solutions improved 2.5% year over year to $277.3 million owing to strength in North American residential HVAC, somewhat offset by weakness in the Middle East and residential hermetic motor components. Operating margin of the segment increased to 15.9% from 14.9% in the year-ago quarter.
Balance Sheet and Cash Flow
As on Jun 30, 2018, Regal Beloit’s cash and cash equivalents were $175.6 million while long-term debt was $1,235.1 million.
Net cash from operating activities for the first six months of 2018 totaled $144.3 million, down from $148.9 million in the year-ago period.
Free cash flow for the reported quarter amounted to $80.6 million or 122.3% of net income compared with the respective tallies of $81.7 million and 154.2% in the prior-year period. During the quarter, Regal Beloit repurchased 579,005 shares for $46.1 million.
2018 Outlook
For 2018, Regal Beloit currently expects its adjusted earnings per share in the range of $5.70-$6.00. The company projects GAAP earnings per share between $4.78 and $5.08, down from prior expectations of $5.29-$5.69.
Regal Beloit currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks are Altra Industrial Motion Corp. , Pentair plc (PNR - Free Report) and Roper Technologies, Inc. (ROP - Free Report) . While Altra Industrial Motion sports a Zacks Rank #1 (Strong Buy), Pentair and Roper Technologies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Altra Industrial Motion surpassed estimates thrice in the trailing four quarters with an average beat of 4.01%.
Pentair exceeded estimates thrice in the trailing four quarters with an average beat of 2.50%.
Roper Technologies surpassed estimates in each of the trailing four quarters with an average beat of 4.48%.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Regal Beloit (RBC) Q2 Earnings Miss Estimates, Sales Up Y/Y
Regal Beloit Corporation (RBC - Free Report) reported mixed results for the second quarter of 2018.
On a GAAP basis, the industrial goods manufacturer reported net income of $65.9 million or $1.50 per share compared with $53 million or $1.18 per share in the year-earlier quarter. The improvement came on the back of higher revenues across segments.
Adjusted earnings were $1.60 per share compared with $1.29 in the year-ago quarter. However, the bottom line missed the Zacks Consensus Estimate of $1.61.
Net sales increased to $959.7 million from $869.2 million in the year-earlier quarter, driven by strong organic sales growth across all three operating segments. Moreover, quarterly revenues beat the Zacks Consensus Estimate of $953.7 million.
GAAP operating income improved to $99.6 million from $83.2 million in the prior-year quarter. Adjusted operating income was $106.1 million compared with $90.6 million in the year-ago quarter. Adjusted operating margin came in at 11.1%, up 70 basis points year over year.
Regal Beloit Corporation Price, Consensus and EPS Surprise
Regal Beloit Corporation Price, Consensus and EPS Surprise | Regal Beloit Corporation Quote
Segmental Analysis
Revenues from Power Transmission Solutions increased 11.6% year over year to $213.4 million. Sales were driven by rise in demand in the oil & gas, material handling, and aerospace end markets. Operating margin at the segment increased to 11.8% from 11.6% in the prior-year quarter.
Net sales from Commercial and Industrial Systems were $469 million, up 15.1% year over year, driven by strength in commercial HVAC (heating, ventilation and air conditioning), oil & gas and power generation and Asia. Operating margin at the segment increased to 6.5% from 5.1% in the prior-year quarter.
Net sales from Climate Solutions improved 2.5% year over year to $277.3 million owing to strength in North American residential HVAC, somewhat offset by weakness in the Middle East and residential hermetic motor components. Operating margin of the segment increased to 15.9% from 14.9% in the year-ago quarter.
Balance Sheet and Cash Flow
As on Jun 30, 2018, Regal Beloit’s cash and cash equivalents were $175.6 million while long-term debt was $1,235.1 million.
Net cash from operating activities for the first six months of 2018 totaled $144.3 million, down from $148.9 million in the year-ago period.
Free cash flow for the reported quarter amounted to $80.6 million or 122.3% of net income compared with the respective tallies of $81.7 million and 154.2% in the prior-year period. During the quarter, Regal Beloit repurchased 579,005 shares for $46.1 million.
2018 Outlook
For 2018, Regal Beloit currently expects its adjusted earnings per share in the range of $5.70-$6.00. The company projects GAAP earnings per share between $4.78 and $5.08, down from prior expectations of $5.29-$5.69.
Regal Beloit currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks are Altra Industrial Motion Corp. , Pentair plc (PNR - Free Report) and Roper Technologies, Inc. (ROP - Free Report) . While Altra Industrial Motion sports a Zacks Rank #1 (Strong Buy), Pentair and Roper Technologies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Altra Industrial Motion surpassed estimates thrice in the trailing four quarters with an average beat of 4.01%.
Pentair exceeded estimates thrice in the trailing four quarters with an average beat of 2.50%.
Roper Technologies surpassed estimates in each of the trailing four quarters with an average beat of 4.48%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>