Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Headquartered in Beloit, Wisconsin, Regal-BeloitCorporation (RBC - Snapshot Report) recently issued a public offering of 2,750,000 shares of its common stock. The electrical and mechanical motion control products manufacturer also intends to provide the underwriters an option to buy up to an added 412,500 shares of common stock in order to cover over-allotments.

Underwriters to this offering are Credit Suisse Securities (USA) LLC, a subsidiary of Credit Suisse (CS - Snapshot Report) and Robert W. Baird & Co. Incorporated. The proceeds from the offerings are expected to aid the company’s future acquisitions along with other general corporate and working capital expenses.

The latest capital raising initiatives are likely to help the company minimize its total debt burden to a considerable extent. Further, the company will be able to raise its capital ratios with this capital spending which in turn will facilitate the company’s future growth prospects and acquisition opportunities. The strategic efforts are also aimed at increasing the liquidity of the company.

However, even though liquidity will improve in the short-term for the company, an increase in the number of outstanding shares may prove to be an extra burden for Regal-Beloit in the long run, considering its steady and regular dividend payout strategy.

Earlier, the company had reported adjusted diluted earnings per share of $1.32 in the third quarter of 2012 compared to $1.31 per share in the year-ago quarter and $1.50 in the second quarter of 2012. The results failed to meet the Zacks Consensus Estimate of $1.37 per share.

Exiting the third quarter, Regal-Beloit’s cash and cash equivalents were $185.8 million versus $190.9 million in the previous quarter. Long-term debt at the end of 3Q12 was $781.7 million versus $899.8 million at the end of the previous quarter.

In a different story, the company recently announced to pay its third-quarter dividend of $0.19 per share. The dividend will be paid on January 18, 2013, to shareholders of record as of December 28, 2012.

Regal-Beloit is operating in a highly competitive industry. Some of the competitors in electric motor, power generation and mechanical motion control markets are ABB Ltd. (ABB - Snapshot Report) and Emerson Electric Co. (EMR - Analyst Report) who enjoy greater financial and other resources than the company. 

The current Zacks Consensus Estimates of Regal-Beloit for the fourth quarter of 2012 and for 2012 are 73 cents and $4.71, representing year-over-year growth of (21.0%) and 0.1%, respectively. The company currently retains a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. However, we are maintaining a long-term ‘Neutral’ recommendation on the stock.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%