RBC Bearings Incorporated’s (RBC Quick QuoteRBC - Free Report) first-quarter fiscal 2024 (ended Jul 1, 2023) adjusted earnings of $1.98 per share surpassed the Zacks Consensus Estimate of adjusted earnings of $1.87 per share. The bottom line increased 10.6% from the year-ago figure of $1.79 per share, supported by higher revenues.

Revenue Details

In the quarter under review, RBC Bearings’ revenues were $387.1 million, reflecting an increase of 9.3% from the year-ago quarter’s level. However, RBC Bearings’ revenues missed the consensus estimate of $391 million.

While exiting the reported quarter, RBC had a backlog of $641.1 million, up 0.9% year over year.

RBC currently has two reportable segments, namely Aerospace/Defense and Industrial. Its segmental performance for the fiscal first quarter is briefly discussed below:

Industrial revenues of $266.7 million (representing 68.9% of the quarter’s revenues) were up 4.7% year over year.

Aerospace/Defense revenues totaled $120.5 million (representing 31.1% of the quarter’s revenues), increasing 21.2% year over year.

Margin Profile

In the reported quarter, RBC Bearings’ cost of sales increased 3% year over year to $219.3 million. Gross profit increased 18.9% to $167.9 million. The margin increased 350 basis points (bps) to 43.4%.

Selling, general and administrative expenses were $64.7 million, up 15.8% year over year. Adjusted EBITDA was $120.4 million, increasing 19.5%. The EBITDA margin was 31.1%, up 270 bps year over year.

Adjusted operating income increased 24.9% to $85.3 million. The adjusted margin increased 270 bps to 22%. Net interest expenses were $20.5 million compared with $15.8 million in the year-ago quarter.

Balance Sheet and Cash Flow

At the time of exiting the fiscal first quarter, RBC Bearings had cash and cash equivalents of $56.7 million, compared with $65.4 million at the end of the fourth quarter of fiscal 2023. Total debt was $1,344.9 million, down from $1,395.0 million at the end of the fourth quarter of fiscal 2023.

In the first three months of fiscal 2024, RBC Bearings generated net cash of $61.7 million from operating activities, increasing 4.6% from the previous-year period’s number. Capital expenditure was $6.7 million, decreasing 15.2% from the year-ago quarter.

In the same time period, RBC Bearings repurchased shares for $6.8 million, increasing 13.3% year over year.

Outlook

For the second quarter of fiscal 2024, RBC Bearings anticipates net sales of $380-$390 million, suggesting an increase of 7.3-10.1% from the year-ago figure of $354.1 million. The Zacks Consensus Estimate for the quarter is pegged at $403.2 million. The gross margin (as a percentage of net sales) is expected to be 42-42.50% for the quarter. RBC predicts selling, general and administrative expenses (as a percentage of net sales) to be 16.25-16.75%. For the fiscal quarter, the company expects interest expense (net) to be $19,500-$20,000.

Zacks Rank & Other Stocks to Consider

RBC currently carries a Zacks Rank #2 (Buy). Some other top-ranked companies from the Industrial Products sector are discussed below:

Greif, Inc. (GEF Quick QuoteGEF - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.

GEF delivered a trailing four-quarter earnings surprise of 7.7%, on average. GEF’s earnings estimates have increased 12.7% for fiscal 2023 in the past 60 days. Its shares have risen 7.9% in the past year.

Caterpillar Inc. (CAT Quick QuoteCAT - Free Report) presently carries a Zacks Rank of 2. CAT’s earnings surprise in the last four quarters was 18.5%, on average.

In the past 60 days, estimates for Caterpillar’s earnings have increased 7.3% for 2023. The stock has gained 48.8% in the past year.