It has been about a month since the last earnings report for RBC Bearings Incorporated (ROLL - Free Report) . Shares have added about 4.9% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is ROLL due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter Fiscal 2018 Highlights
RBC Bearings Inc. reported mixed fourth-quarter fiscal 2018 (ended March 2018) results.
Earnings: Quarterly adjusted earnings came in at $1.08 per share, missing the Zacks Consensus Estimate of $1.13. However, the bottom line came in 20% higher than the year-ago tally.
Revenues: Net sales in the reported quarter came in at $179.9 million, surpassing the Zacks Consensus Estimate of $175 million. In addition, the top line came in 12.3% higher than the year-ago figure.
Net sales also improved 13.5% year over year organically in the reported quarter. The upswing stemmed from strong demand secured from the industrial and aerospace end-markets.
Plain Bearings revenues improved 12.8% year over year to $81.9 million, while Roller Bearings sales climbed 24.8% to $35.8 million. Ball Bearings sales came in at $19.1 million, up 15.7% year over year. Engineered Products sales inched up 1.6% year over year to $43.1 million.
Adjusted earnings for fiscal 2018 came in at $3.87 per share, missing the Zacks Consensus Estimate of $3.91. However, annual earnings improved 22.1% year over year.
Net sales in fiscal 2018 came in at $674.9 million, beating the Zacks Consensus Estimate of $669.8 million. The top line also improved 9.7% year over year. On an organic basis, revenues were up 10% year over year.
Costs/Margins: Cost of sales in the reported quarter came in at $110.2 million, up 13.6% year over year. Adjusted gross margin came in at 38.8%, contracting 70 basis points (bps) year over year.
Selling, general and administrative expenses during the quarter came in at $29.6 million, up 12.8% year over year. Adjusted operating margin came in at 21.3% during the fiscal fourth quarter, down 20 bps year over year.
For fiscal 2018, adjusted gross and operating margin shrunk 30 bps and 50 bps, respectively.
Balance Sheet/Cash Flow: Existing the fiscal fourth quarter, RBC Bearings had cash and cash equivalents worth $54.2 million compared to $38.9 million recorded as of Apr 1, 2017.
In fiscal 2018, RBC Bearings generated $130.3 million of cash from its operating activities as against $101.2 million reported in the prior-year period. Capital spending escalated 33.9% year over year to $28 million.
In fiscal 2018, the company's total debt came in at $173.4 million, lower than $269.8 million recorded as of Dec 31, 2016.
Outlook: RBC Bearings intends to boost its near-term competency on the back of sturdier industrial and aerospace sales. The company anticipates to generate revenues in the range of $171-$174 million in first-quarter fiscal 2019 (estimating year-over-year growth of 4.3-6.2%).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
RBC Bearings Incorporated Price and Consensus
At this time, ROLL has a great Growth Score of A, though it is lagging a lot on the momentum front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Estimates have been broadly trending downward for the stock and the magnitude of this revision indicates a downward shift. Interestingly, ROLL has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.