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RBC Bearings (ROLL) Q1 Earnings Top Estimates, Sales Lag

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RBC Bearings Incorporated (ROLL - Free Report) delivered mixed results for the first quarter of fiscal 2022 (ended Jul 3, 2021). The company’s earnings beat estimates by 4%, whereas sales lagged the same by 1.9%.

Adjusted earnings in the reported quarter were $1.04 per share, surpassing the Zacks Consensus Estimate of $1.00. Also, the bottom line increased 9.5% from the year-ago quarter’s figure of 95 cents on weak sales generation.

Revenue Details

In the reported quarter, RBC Bearings’ net sales were $156.2 million, declining 0.2% year over year. Also, the top line lagged the Zacks Consensus Estimate of $156.3 million but was in line with the company’s projection of $154-$158 million for the quarter.

The company’s overall aerospace business experienced an 18.3% decline in revenues. However, its business in industrial markets improved and recorded a 31% year-over-year increase in revenues.

Exiting the reported quarter, the company had a backlog of $420.2 million, down 2.7% year over year.

RBC Bearings reports net sales under four heads/segments that are discussed below:

Revenues in Plain bearings totaled $73.3 million, down 7.1% year over year, while that for Roller bearings increased 10.2% year over year to $25.3 million. Ball bearings’ revenues of $23.1 million were up 22.8% year over year. Revenues in Engineered products summed $34.5 million, down 3.8% year over year.

Margin Picture

In the reported quarter, RBC Bearings’ cost of sales decreased 4.7% year over year to $92.4 million, representing 59.2% of net sales compared with 62% a year ago. Gross profit increased 7.3% year over year to $63.8 million. Margin grew 280 basis points (bps) to 40.8%.

Selling, general and administrative expenses of $29.8 million were up 11.1% year over year, accounting for 19.1% of net sales. Adjusted operating income increased 4.5% year over year to $31.3 million. Adjusted margin grew 90 bps year over year to 20%. Interest expenses, net, declined 24.9% year over year to $0.3 million in the reported quarter.

Effective tax rate was 15.8% in the quarter under review compared with 20% in the prior-year quarter.

Balance Sheet and Cash Flow

Exiting the fiscal first quarter, RBC Bearings had cash and cash equivalents of $175.8 million, up 16.2% from $151.1 million recorded at the end of the previous quarter. Long-term debt was $10.8 million, down 20% sequentially.

In the reported quarter, the company generated net cash of $53.3 million from operating activities, up 10.2% from $48.4 million in the previous-year quarter. Capital spending of $3.4 million fell 13.1% year over year.

In the reported quarter, the company repurchased shares worth $6.3 million, up from $4.4 million in the previous-year quarter.

Outlook

For the second quarter of fiscal 2022 (ending September 2021), RBC Bearings anticipates net sales of $158-$162 million. This represents an increase of 8-10.7% from the year-ago figure of $146.3 million.

RBC Bearings Incorporated Price, Consensus and EPS Surprise

 

RBC Bearings Incorporated Price, Consensus and EPS Surprise

RBC Bearings Incorporated price-consensus-eps-surprise-chart | RBC Bearings Incorporated Quote

Zacks Rank & Stocks to Consider

With a market capitalization of $5.8 billion, RBC Bearings currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the industry are EnPro Industries, Inc. (NPO - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and Dover Corporation (DOV - Free Report) . While EnPro presently sports a Zacks Rank #1 (Strong Buy), both Applied Industrial and Dover 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 EnPro and Applied Industrial have been unchanged, while have improved for Dover for the current year. Further, positive earnings surprise in the last reported quarter was 25.81% for EnPro, 35.64% for Applied Industrial and 11.96% for Dover.