RBC Bearings Incorporated (ROLL - Free Report) reported better-than-expected results for the first quarter of fiscal 2020 (ended Jun 29, 2019), delivering a positive earnings surprise of 3.36%. This was the company’s fifth consecutive quarter of impressive results.
The machinery company’s adjusted earnings in the reported quarter were $1.23 per share, surpassing the Zacks Consensus Estimate of $1.19. Also, the bottom line rose 7% from the year-ago quarter’s number of $1.15 on healthy sales growth and margin improvement.
Organic Sales Drive Revenues
In the quarter under review, RBC Bearings’ revenues totaled $182.7 million, reflecting year-over-year growth of 3.8%. Organic sales in the quarter grew 6.5% year over year on healthy growth in aerospace markets.
However, the company’s revenues lagged the Zacks Consensus Estimate of $183 million by 0.23%.
Exiting the reported quarter, it had backlog of $459.4 million, up 9.6% year over year.
RBC Bearings reports net sales under four heads/segments. The segmental results are briefly discussed below:
Revenues from Plain bearings totaled $87.5 million, up 11.4% year over year, while that from Roller bearings grew 2.7% year over year to $36.9 million. Ball bearings’ revenues were $17.7 million, down 2% year over year. Revenues from Engineered products totaled $40.6 million, down 6.6% year over year.
Margins Improve Y/Y
In the reported quarter, RBC Bearings’ cost of sales grew 3.5% year over year to $112 million. It represented 61.3% of net sales versus 61.5% recorded in the year-ago quarter. Gross profit in the quarter rose 4.4% year over year to $70.7 million. Margin in the quarter grew 20 basis points (bps) to 38.7%.
Selling, general and administrative expenses of $30.1 million rose 1.7% year over year, and represented 16.5% of net sales versus 16.8% in the year-ago quarter. Operating income in the reported quarter grew 6.9% year over year to $38.5 million. Adjusted margin was 21.1% versus 20.5% in the year-ago quarter.
Effective tax rate was 19.3% in the quarter under review versus 17.4% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the fiscal first quarter, RBC Bearings had cash and cash equivalents of $32.7 million, rising 9.5% from $29.9 million recorded at the previous quarter end. Total debt was $26.3 million, down 39.2% sequentially.
In the first quarter of fiscal 2020, the company generated net cash of $40.1 million from operating activities, up 18.6% from $33.8 million recorded in the year-ago comparable quarter. Capital spending totaled $12 million, rising 72.2% year over year.
During the quarter, the company repurchased shares worth $9.5 million.
RBC Bearings anticipates net sales of $180-$180 million for the second quarter of fiscal 2019 (ending September 2019). The projection reflects growth of 4.1-5.3% from the year-ago quarter.
RBC Bearings Incorporated Price, Consensus and EPS Surprise