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Barnes Group (B) Q4 Earnings Surpass Estimates, Revenues Miss
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Barnes Group Inc. (B - Free Report) reported mixed fourth-quarter 2021 results, wherein its earnings surpassed estimates by 19.6%, but sales missed the same by 1.3%.
Its adjusted earnings in the reported quarter were 55 cents per share, surpassing the Zacks Consensus Estimate of 46 cents. Also, the bottom line increased 52.8% from the year-ago quarter figure of 36 cents on the back of higher sales generation.
In 2021, the company’s earnings came in at $1.94, an increase of 18.3% on a year-over-year basis.
Top-Line Results
In the reported quarter, Barnes’ net sales increased 8% year over year to $311 million. Organic sales in the quarter grew 9% on strengthening segmental businesses.
The company’s revenues missed the Zacks Consensus Estimate of $315 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 $210.3 million, increasing 1% year over year. The segment gained from strengthening end-market businesses. Organic sales were up 3% year over year, and movements in foreign currencies had a negative impact of 2%.
Aerospace’s sales were $100.7 million in the fourth quarter, up 26% from the year-ago quarter on the back of improvement in the aerospace markets.
Aftermarket sales were up 45% year over year, while that for original equipment manufacturing increased 18%.
In 2021, the company’s revenues came in at $1,258.8 million, up 12% year over year.
Barnes Group, Inc. Price, Consensus and EPS Surprise
In the reported quarter, Barnes’ cost of sales increased 6.3% year over year to $200.9 million. The cost of sales represented 64.6% of net sales versus 65.4% in the year-ago quarter. Selling and administrative expenses increased 10.8% to $74.7 million and represented 24% of net sales.
Adjusted operating income in the reported quarter increased 7.7% year over year to $35.4 million, whereas margins were stable at 11.4%. Growth in sales was offset by high labor, raw material and freight costs. Interest expenses totaled $3.8 million in the reported quarter, down 6.3% year over year.
The effective tax rate in 2021 was 21.9%, lower than 37.6% a year ago.
Balance Sheet & Cash Flow
Exiting the fourth quarter, Barnes’ cash and cash equivalents were $102.9 million, up 10.1% from $93.5 million recorded in the last reported quarter. Long-term debt was $599.9 million, reflecting a 4.6% decline from $628.7 million in the last reported quarter.
In 2021, the company repaid long-term debt of $115.5 million. Proceeds from the issuance of long-term debts were $48.3 million. Liquidity available in the quarter included cash of $103 million and credit under revolving facilities of $505 million.
In 2021, the company generated net cash of $167.8 million from operating activities, down 22.1% from the year-ago period. Capital expenditure totaled $34.1 million, decreasing 16.2%. Free cash flow was $133.7 million versus $174.8 million in the previous year.
In 2021, Barnes paid out dividends of $32.4 million, flat year over year. Shares worth $5.2 million were repurchased in the year.
Outlook
For 2022, Barnes anticipates adjusted earnings of $2.20-$2.45, suggesting a year-over-year increase of 19.8% on a mid-point basis.
Organic sales for the year are expected to rise 8-10% on a year-over-year basis. Movements in foreign currencies are expected to hurt sales by 2%.
The adjusted operating margin is predicted to be 13-14%. The company anticipates a capital expenditure of about $60 million. Cash conversion is expected to exceed 100% of net income. The effective tax rate for 2022 is expected to be 25.5-26.5%.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Griffon’s earnings estimates increased 9.9% for fiscal 2022 (ending September 2022) in the past 30 days. Its shares have lost 13.5% in the past three months.
Franklin Electric Co., Inc. (FELE - Free Report) presently sports a Zacks Rank #1. Its earnings surprise in the last four quarters was 17.44%, on average.
In the past 30 days, Franklin Electric’s earnings estimates have increased 10.9% for 2022. FELE’s shares have lost 11.9% in the past three months.
AZZ Inc. (AZZ - Free Report) presently carries a Zacks Rank #2 (Buy). Its earnings surprise in the last four quarters was 16.90%, on average.
AZZ’s earnings estimates have been stable for fiscal 2022 (ending February 2022) in the past 30 days. AZZ’s shares have declined 12.2% in the past three months.
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Barnes Group (B) Q4 Earnings Surpass Estimates, Revenues Miss
Barnes Group Inc. (B - Free Report) reported mixed fourth-quarter 2021 results, wherein its earnings surpassed estimates by 19.6%, but sales missed the same by 1.3%.
Its adjusted earnings in the reported quarter were 55 cents per share, surpassing the Zacks Consensus Estimate of 46 cents. Also, the bottom line increased 52.8% from the year-ago quarter figure of 36 cents on the back of higher sales generation.
In 2021, the company’s earnings came in at $1.94, an increase of 18.3% on a year-over-year basis.
Top-Line Results
In the reported quarter, Barnes’ net sales increased 8% year over year to $311 million. Organic sales in the quarter grew 9% on strengthening segmental businesses.
The company’s revenues missed the Zacks Consensus Estimate of $315 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 $210.3 million, increasing 1% year over year. The segment gained from strengthening end-market businesses. Organic sales were up 3% year over year, and movements in foreign currencies had a negative impact of 2%.
Aerospace’s sales were $100.7 million in the fourth quarter, up 26% from the year-ago quarter on the back of improvement in the aerospace markets.
Aftermarket sales were up 45% year over year, while that for original equipment manufacturing increased 18%.
In 2021, the company’s revenues came in at $1,258.8 million, up 12% year over year.
Barnes Group, Inc. Price, Consensus and EPS Surprise
Barnes Group, Inc. price-consensus-eps-surprise-chart | Barnes Group, Inc. Quote
Margin Profile
In the reported quarter, Barnes’ cost of sales increased 6.3% year over year to $200.9 million. The cost of sales represented 64.6% of net sales versus 65.4% in the year-ago quarter. Selling and administrative expenses increased 10.8% to $74.7 million and represented 24% of net sales.
Adjusted operating income in the reported quarter increased 7.7% year over year to $35.4 million, whereas margins were stable at 11.4%. Growth in sales was offset by high labor, raw material and freight costs. Interest expenses totaled $3.8 million in the reported quarter, down 6.3% year over year.
The effective tax rate in 2021 was 21.9%, lower than 37.6% a year ago.
Balance Sheet & Cash Flow
Exiting the fourth quarter, Barnes’ cash and cash equivalents were $102.9 million, up 10.1% from $93.5 million recorded in the last reported quarter. Long-term debt was $599.9 million, reflecting a 4.6% decline from $628.7 million in the last reported quarter.
In 2021, the company repaid long-term debt of $115.5 million. Proceeds from the issuance of long-term debts were $48.3 million. Liquidity available in the quarter included cash of $103 million and credit under revolving facilities of $505 million.
In 2021, the company generated net cash of $167.8 million from operating activities, down 22.1% from the year-ago period. Capital expenditure totaled $34.1 million, decreasing 16.2%. Free cash flow was $133.7 million versus $174.8 million in the previous year.
In 2021, Barnes paid out dividends of $32.4 million, flat year over year. Shares worth $5.2 million were repurchased in the year.
Outlook
For 2022, Barnes anticipates adjusted earnings of $2.20-$2.45, suggesting a year-over-year increase of 19.8% on a mid-point basis.
Organic sales for the year are expected to rise 8-10% on a year-over-year basis. Movements in foreign currencies are expected to hurt sales by 2%.
The adjusted operating margin is predicted to be 13-14%. The company anticipates a capital expenditure of about $60 million. Cash conversion is expected to exceed 100% of net income. The effective tax rate for 2022 is expected to be 25.5-26.5%.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies are discussed below.
Griffon Corporation (GFF - Free Report) presently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. It delivered a four-quarter earnings surprise of 16.20%, on average.
Griffon’s earnings estimates increased 9.9% for fiscal 2022 (ending September 2022) in the past 30 days. Its shares have lost 13.5% in the past three months.
Franklin Electric Co., Inc. (FELE - Free Report) presently sports a Zacks Rank #1. Its earnings surprise in the last four quarters was 17.44%, on average.
In the past 30 days, Franklin Electric’s earnings estimates have increased 10.9% for 2022. FELE’s shares have lost 11.9% in the past three months.
AZZ Inc. (AZZ - Free Report) presently carries a Zacks Rank #2 (Buy). Its earnings surprise in the last four quarters was 16.90%, on average.
AZZ’s earnings estimates have been stable for fiscal 2022 (ending February 2022) in the past 30 days. AZZ’s shares have declined 12.2% in the past three months.