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Barnes Group Inc. (B - Free Report) reported better-than-expected results for the second quarter of 2021. Its earnings surpassed estimates by 2.27% and sales beat the same by 6.88%.
Its adjusted earnings in the reported quarter were 45 cents per share, surpassing the Zacks Consensus Estimate of 44 cents. Also, the bottom line increased 66.7% from the year-ago quarter figure of 27 cents on the back of higher sales generation and improved margins.
Top-Line Results
In the reported quarter, Barnes’ net sales increased 36.4% year over year to $321.2 million. Organic sales in the quarter grew 31% year over year on strengthening end markets. Movements in foreign currencies had a positive impact of 5%.
It is worth noting here that second-quarter sales rose 6% from first-quarter 2021.
The company’s revenues surpassed the Zacks Consensus Estimate of $300 million.
Barnes reports revenues under two heads — Industrial and Aerospace. A brief snapshot of the segmental sales is provided below:
Revenues generated from Industrial amounted to $234.7 million, increasing 42.2% year over year. The segment gained from strengthening end-market businesses. Organic sales were up 35% year over year and movements in foreign currencies had a positive impact of 7%.
Aerospace’s sales were $86.5 million in the second quarter, up 22.7% from the year-ago quarter. The results gained from healthy original equipment manufacturing performance, partially offset by the pandemic-related weakness in the aerospace aftermarket business.
Aftermarket sales were down 2% year over year, while that of original equipment manufacturing increased 37%.
Margin Profile
In the reported quarter, Barnes’ cost of sales increased 38.2% year over year to $203.2 million. Notably, cost of sales represented 63.3% of net sales versus 62.4% in the year-ago quarter. Selling and administrative expenses increased 1.4% year over year to $79.4 million, and represented 24.7% of net sales.
Adjusted operating income in the reported quarter increased 40.9% year over year to $39.2 million, whereas margin grew 40 basis points to 12.2%. Interest expenses totaled $4.5 million in the reported quarter, up 14.8% year over year. Tax rate in the quarter was 25.3%, lower than 89% in the year-ago quarter.
Balance Sheet & Cash Flow
Exiting the second quarter, Barnes’ cash and cash equivalents were $91.1 million, up 7.3% from $84.9 million recorded in the last reported quarter. Long-term debt was $654.5 million, reflecting a 1.4% decline from $664 million in the last reported quarter.
In the first half, the company repaid long-term debt of $56.5 million. Also, it received $25 million as proceeds from the issuance of long-term debts. Liquidity available in the quarter included cash of $91 million and credit under revolving facilities of $451 million.
In the first six months of 2021, the company generated net cash of $85.7 million from operating activities, down 30.4% from the year-ago period. Capital expenditure totaled $17.6 million, decreasing 11.3% year over year. Free cash flow was $68.2 million versus $103.4 million in the year-ago period.
In the first half of 2021, Barnes paid out dividends of $16.2 million, representing a 0.1% decrease from the prior-year period. Shares worth $5.2 million were repurchased in the first half of 2021.
Outlook
For 2021, Barnes anticipates earnings of $1.83-$1.98 per share, above the previously stated $1.78-$1.98. The revised projection suggests year-over-year growth of 12-21%.
Organic sales for the year are expected to rise 11-12% (on a year-over-year basis) versus 10-12% mentioned earlier. Movements in foreign currencies are expected to boost sales by 2% (maintained). Divestiture impact is expected to be adverse 1% (maintained).
Operating margin is predicted to be 13% (maintained). The company anticipates a capital expenditure of $50 million, the same as the previously mentioned figure. Cash conversion is expected to exceed 110% of net income (higher than 100% mentioned previously). Effective tax rate for 2021 is expected to be 30% (maintained).
Barnes Group, Inc. Price, Consensus and EPS Surprise
With a market capitalization of $2.6 billion, Barnes currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the industry are The Middleby Corporation (MIDD - Free Report) , Altra Industrial Motion Corp. and Applied Industrial Technologies, Inc. (AIT - Free Report) . While Middleby currently sports a Zacks Rank #1 (Strong Buy), both Altra Industrial and Applied Industrial carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 30 days, earnings estimates for Middleby and Altra Industrial improved for the current year, while have been unchanged for Applied Industrial. Earnings surprise for the last reported quarter was 9.82% for Middleby, 8.54% for Altra Industrial and 35.64% for Applied Industrial.
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Barnes (B) Tops Q2 Earnings Estimates, Revises '21 Projections
Barnes Group Inc. (B - Free Report) reported better-than-expected results for the second quarter of 2021. Its earnings surpassed estimates by 2.27% and sales beat the same by 6.88%.
Its adjusted earnings in the reported quarter were 45 cents per share, surpassing the Zacks Consensus Estimate of 44 cents. Also, the bottom line increased 66.7% from the year-ago quarter figure of 27 cents on the back of higher sales generation and improved margins.
Top-Line Results
In the reported quarter, Barnes’ net sales increased 36.4% year over year to $321.2 million. Organic sales in the quarter grew 31% year over year on strengthening end markets. Movements in foreign currencies had a positive impact of 5%.
It is worth noting here that second-quarter sales rose 6% from first-quarter 2021.
The company’s revenues surpassed the Zacks Consensus Estimate of $300 million.
Barnes reports revenues under two heads — Industrial and Aerospace. A brief snapshot of the segmental sales is provided below:
Revenues generated from Industrial amounted to $234.7 million, increasing 42.2% year over year. The segment gained from strengthening end-market businesses. Organic sales were up 35% year over year and movements in foreign currencies had a positive impact of 7%.
Aerospace’s sales were $86.5 million in the second quarter, up 22.7% from the year-ago quarter. The results gained from healthy original equipment manufacturing performance, partially offset by the pandemic-related weakness in the aerospace aftermarket business.
Aftermarket sales were down 2% year over year, while that of original equipment manufacturing increased 37%.
Margin Profile
In the reported quarter, Barnes’ cost of sales increased 38.2% year over year to $203.2 million. Notably, cost of sales represented 63.3% of net sales versus 62.4% in the year-ago quarter. Selling and administrative expenses increased 1.4% year over year to $79.4 million, and represented 24.7% of net sales.
Adjusted operating income in the reported quarter increased 40.9% year over year to $39.2 million, whereas margin grew 40 basis points to 12.2%. Interest expenses totaled $4.5 million in the reported quarter, up 14.8% year over year. Tax rate in the quarter was 25.3%, lower than 89% in the year-ago quarter.
Balance Sheet & Cash Flow
Exiting the second quarter, Barnes’ cash and cash equivalents were $91.1 million, up 7.3% from $84.9 million recorded in the last reported quarter. Long-term debt was $654.5 million, reflecting a 1.4% decline from $664 million in the last reported quarter.
In the first half, the company repaid long-term debt of $56.5 million. Also, it received $25 million as proceeds from the issuance of long-term debts. Liquidity available in the quarter included cash of $91 million and credit under revolving facilities of $451 million.
In the first six months of 2021, the company generated net cash of $85.7 million from operating activities, down 30.4% from the year-ago period. Capital expenditure totaled $17.6 million, decreasing 11.3% year over year. Free cash flow was $68.2 million versus $103.4 million in the year-ago period.
In the first half of 2021, Barnes paid out dividends of $16.2 million, representing a 0.1% decrease from the prior-year period. Shares worth $5.2 million were repurchased in the first half of 2021.
Outlook
For 2021, Barnes anticipates earnings of $1.83-$1.98 per share, above the previously stated $1.78-$1.98. The revised projection suggests year-over-year growth of 12-21%.
Organic sales for the year are expected to rise 11-12% (on a year-over-year basis) versus 10-12% mentioned earlier. Movements in foreign currencies are expected to boost sales by 2% (maintained). Divestiture impact is expected to be adverse 1% (maintained).
Operating margin is predicted to be 13% (maintained). The company anticipates a capital expenditure of $50 million, the same as the previously mentioned figure. Cash conversion is expected to exceed 110% of net income (higher than 100% mentioned previously). Effective tax rate for 2021 is expected to be 30% (maintained).
Barnes Group, Inc. Price, Consensus and EPS Surprise
Barnes Group, Inc. price-consensus-eps-surprise-chart | Barnes Group, Inc. Quote
Zacks Rank & Stocks to Consider
With a market capitalization of $2.6 billion, Barnes currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the industry are The Middleby Corporation (MIDD - Free Report) , Altra Industrial Motion Corp. and Applied Industrial Technologies, Inc. (AIT - Free Report) . While Middleby currently sports a Zacks Rank #1 (Strong Buy), both Altra Industrial and Applied Industrial carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 30 days, earnings estimates for Middleby and Altra Industrial improved for the current year, while have been unchanged for Applied Industrial. Earnings surprise for the last reported quarter was 9.82% for Middleby, 8.54% for Altra Industrial and 35.64% for Applied Industrial.