RBC Bearings Incorporated’s (RBC Quick QuoteRBC - Free Report) third-quarter fiscal 2024 (ended December 2023) adjusted earnings of $1.85 per share missed the Zacks Consensus Estimate of $1.91. Nevertheless, the figure increased 12.8% from the year-ago adjusted earnings of $1.64 per share, supported by higher revenues.

Revenue Details

In the quarter under review, RBC Bearings’ revenues were $373.9 million, indicating an increase of 6.3% from the year-ago quarter’s level. However, the figure missed the Zacks Consensus Estimate of $377 million.
While exiting the reported quarter, RBC had a backlog of $652.1 million, up 6.3% year over year.

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

Industrial revenues of $244.6 million (representing 65.4% of the quarter’s revenues) were down 0.6% year over year.
Aerospace/Defense revenues totaled $129.3 million (representing 34.6% of the quarter’s revenues), increasing 22.6% year over year.

Margin Profile

In the reported quarter, RBC Bearings’ cost of sales increased 5% year over year to $215.9 million. Gross profit increased 8.2% to $158 million. The margin increased 80 basis points (bps) to 42.3%.

Selling, general and administrative expenses were $63.9 million, up 12.5% year over year. Adjusted EBITDA was $109.5 million, up 3%. The EBITDA margin was 29.3%, down 10 bps year over year.

Adjusted operating income increased 5.4% to $75.5 million. The adjusted margin decreased 20 bps to 20.2%. Net interest expenses were $19.3 million compared with $20.9 million in the year-ago quarter.

Balance Sheet and Cash Flow

At the time of exiting the fiscal third quarter, RBC Bearings had cash and cash equivalents of $71.6 million compared with $82 million at the end of the year-ago fiscal quarter. Total debt was $1.26 billion, down from $1.46 billion at the end of the year-ago fiscal quarter.

In the first nine months of fiscal 2024, RBC Bearings generated net cash of $195.3 million from operating activities, increasing 30.8% from the previous-year period’s number. Capital expenditure was $23.7 million, decreasing 19.9% from the year-ago quarter.

In the first nine months of fiscal 2024, RBC Bearings repurchased shares for $7.6 million, increasing 15.4% year over year.

Outlook

For the fourth quarter of fiscal 2024, RBC Bearings anticipates net sales to be $405-$415 million, suggesting an increase of 2.7-5.2% from the year-ago figure of $394.4 million.

For fiscal 2024, the company expects net sales to be approximately $1.55 billion. It anticipates gross margins to be in the low to mid-40s range.

Zacks Rank & Stocks to Consider

RBC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked companies from the same space are discussed below:

Parker-Hannifin Corporation (PH Quick QuotePH - Free Report) presently carries a Zacks Rank #2 (Buy). PH delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for its 2023 earnings has increased 2.7%.

Flowserve Corporation (FLS Quick QuoteFLS - Free Report) presently has a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has remained steady.

Applied Industrial Technologies, Inc. (AIT Quick QuoteAIT - Free Report) presently carries a Zacks Rank #2. It has a trailing four-quarter average earnings surprise of 10.4%. The Zacks Consensus Estimate for AIT’s fiscal 2024 (ending June 2024) earnings remained steady in the past 60 days.