We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Barnes (B) Shares Up Nearly 6% Since Q1 Earnings Release
Read MoreHide Full Article
Barnes Group Inc. (B - Free Report) reported first-quarter 2023 adjusted earnings (excluding 21 cents from non-recurring items) of 47 cents per share, which surpassed the Zacks Consensus Estimate of 39 cents. Our estimate for first-quarter earnings was 39 cents. The bottom line increased 14.6% year over year.
Total revenues of $335.4 million outperformed the Zacks Consensus Estimate of $312.7 million. Our estimate for total revenues in the first quarter was $311.8 million. The top line increased 7.3% year over year, with organic sales growth of 9%. Foreign exchange woes impacted sales by 2%. Following this better-than-expected performance, shares of the company have gained 5.7% since the earnings release on Apr 27.
Segmental Discussion
Barnes reports revenues under two heads, namely Industrial and Aerospace. A brief snapshot of the segmental sales is provided below:
Revenues from Industrial amounted to $218 million, up 3% year over year. Organic sales were up 6% year over year, while adverse foreign currency movements lowered sales by 3%. Our estimate for segmental revenues was $202.6 million.
Barnes Group, Inc. Price, Consensus and EPS Surprise
The Aerospace segment’s sales totaled $117 million in the first quarter, up 16% from the year-ago quarter. The upside was due to an 11% increase in Aerospace original equipment manufacturing ("OEM") sales and a 27% rise in aftermarket sales. Our estimate for segmental revenues was $109.1 million.
Margin Profile
In the reported quarter, Barnes’ cost of sales increased 9.2% year over year to $226.24 million. Selling and administrative expenses climbed 15.9% to $85.83 million.
Adjusted operating income jumped 17% year over year to $37.16 million, while the margin improved 90 basis points.
Balance Sheet & Cash Flow
At the end of the first quarter, Barnes had cash and cash equivalents of $78.68 million compared with $76.86 million recorded at the end of 2022. Long-term debt was $563.94 million, down from $569.64 million at the end of 2022.
Liquidity available in the quarter included cash of $79 million and credit under revolving facilities of $539 million.
In the first quarter, Barnes generated net cash of $32.2 million from operating activities compared with $9.3 million consumed in the year-ago period. Capital expenditure totaled $10.9 million, up 47.8% from the year-ago quarter. Free cash flow was $21.27 million compared with negative $16.72 million a year ago.
In the first quarter, Barnes rewarded its shareholders with dividends of $8.10 million, nearly flat year over year.
2023 Outlook
Barnes expects organic sales growth of 6-8% for 2023. Adjusted operating margin is estimated to be 12.5-13.5%.
B raised its adjusted earnings to $2.15-$2.30 per share compared with $2.10-$2.30 expected earlier. The guided range reflects a year-over-year increase of 9-16%. The mid-point of the guided range — $2.23 — lies above the Zacks Consensus Estimate of $2.19.
Barnes expects capital expenditures of approximately $50 million for 2023. Cash conversion is estimated to be approximately 100% of net income. The adjusted effective tax rate is forecasted to be 24.5-25.5% for 2023.
Zacks Rank & Other Key Picks
Barnes carries a Zacks Rank #2 (Buy). Some other top-ranked stocks within the broader Industrial Products sector are as follows:
Image: Bigstock
Barnes (B) Shares Up Nearly 6% Since Q1 Earnings Release
Barnes Group Inc. (B - Free Report) reported first-quarter 2023 adjusted earnings (excluding 21 cents from non-recurring items) of 47 cents per share, which surpassed the Zacks Consensus Estimate of 39 cents. Our estimate for first-quarter earnings was 39 cents. The bottom line increased 14.6% year over year.
Total revenues of $335.4 million outperformed the Zacks Consensus Estimate of $312.7 million. Our estimate for total revenues in the first quarter was $311.8 million. The top line increased 7.3% year over year, with organic sales growth of 9%. Foreign exchange woes impacted sales by 2%. Following this better-than-expected performance, shares of the company have gained 5.7% since the earnings release on Apr 27.
Segmental Discussion
Barnes reports revenues under two heads, namely Industrial and Aerospace. A brief snapshot of the segmental sales is provided below:
Revenues from Industrial amounted to $218 million, up 3% year over year. Organic sales were up 6% year over year, while adverse foreign currency movements lowered sales by 3%. Our estimate for segmental revenues was $202.6 million.
Barnes Group, Inc. Price, Consensus and EPS Surprise
Barnes Group, Inc. price-consensus-eps-surprise-chart | Barnes Group, Inc. Quote
The Aerospace segment’s sales totaled $117 million in the first quarter, up 16% from the year-ago quarter. The upside was due to an 11% increase in Aerospace original equipment manufacturing ("OEM") sales and a 27% rise in aftermarket sales. Our estimate for segmental revenues was $109.1 million.
Margin Profile
In the reported quarter, Barnes’ cost of sales increased 9.2% year over year to $226.24 million. Selling and administrative expenses climbed 15.9% to $85.83 million.
Adjusted operating income jumped 17% year over year to $37.16 million, while the margin improved 90 basis points.
Balance Sheet & Cash Flow
At the end of the first quarter, Barnes had cash and cash equivalents of $78.68 million compared with $76.86 million recorded at the end of 2022. Long-term debt was $563.94 million, down from $569.64 million at the end of 2022.
Liquidity available in the quarter included cash of $79 million and credit under revolving facilities of $539 million.
In the first quarter, Barnes generated net cash of $32.2 million from operating activities compared with $9.3 million consumed in the year-ago period. Capital expenditure totaled $10.9 million, up 47.8% from the year-ago quarter. Free cash flow was $21.27 million compared with negative $16.72 million a year ago.
In the first quarter, Barnes rewarded its shareholders with dividends of $8.10 million, nearly flat year over year.
2023 Outlook
Barnes expects organic sales growth of 6-8% for 2023. Adjusted operating margin is estimated to be 12.5-13.5%.
B raised its adjusted earnings to $2.15-$2.30 per share compared with $2.10-$2.30 expected earlier. The guided range reflects a year-over-year increase of 9-16%. The mid-point of the guided range — $2.23 — lies above the Zacks Consensus Estimate of $2.19.
Barnes expects capital expenditures of approximately $50 million for 2023. Cash conversion is estimated to be approximately 100% of net income. The adjusted effective tax rate is forecasted to be 24.5-25.5% for 2023.
Zacks Rank & Other Key Picks
Barnes carries a Zacks Rank #2 (Buy). Some other top-ranked stocks within the broader Industrial Products sector are as follows:
Ingersoll Rand (IR - Free Report) presently sports a Zacks Rank #1 (Strong Buy). The company pulled off a trailing four-quarter earnings surprise of 8.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
Ingersoll Rand has an estimated earnings growth rate of 7.6% for the current year. The stock has rallied 11.2% in the past six months.
Allegion (ALLE - Free Report) presently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 12.5%, on average.
Allegion has an estimated earnings growth rate of 15.1% for the current year. The stock has gained 7.1% in the past six months.