Premium machine tools & accessories company, RBC Bearings Incorporated (NASDAQ:ROLL) reported better-than-expected earnings for fourth-quarter fiscal 2017(ended Mar 31, 2017). This Zacks Rank #2 (Buy) stock was valued at $105.46 per share as of Jun 1, up 4.1% post the release of fourth-quarter and fiscal 2017 results on May 31.
Over the last one month, the has stock yielded a return of 5.92%, outperforming 1.08% growth recorded by the Zacks categorized Machinery-General Industrial industry.
Earnings and Revenues
Quarterly earnings came in at 90 cents per share, beating the Zacks Consensus Estimate of 88 cents per share. The bottom line also came 4.7% higher than the year-ago tally.
Net sales in the reported quarter came in at $160.2 million, missing the Zacks Consensus Estimate of $162 million. In addition, the top line came 1.3% lower than the prior-year figure.
Earnings for fiscal 2017 came in at $3.17 per share compared with $3.14 per share reported in the year-ago period.
Net sales for fiscal 2017 came in at $615.4 million compared with $597.5 million recorded at the end of fiscal 2016.
Segmental Performance
Plain Bearings revenues edged down 0.7% year over year to $72.6 million, whereas Roller Bearings sales climbed 2.4% to $28.7 million. Ball Bearings sales were $16.5 million, up 10.8% year over year. Engineered Products sales fell 8.3% year over year to $42.4 million.
Costs and Margins
Cost of sales in the reported quarter was $97 million, down 4.8% year over year. Adjusted gross margin came in at 39.5%, up 230 basis points year over year.
Selling, general and administrative expenses during the quarter came in at $26.2 million, nearly flat year over year. Adjusted operating margin was 21.5% during the fiscal fourth quarter, expanding 150 bps year over year.
Adjusted gross margin for fiscal 2017 was 37.9%, up 10 bps year over year. Adjusted operating margin for fiscal 2017 came in at 19.7%, down 20 bps year over year.
Other Financial Fundamentals
Existing the fiscal year, RBC Bearings had cash and cash equivalents worth $38.9 million compared to $39.2 million recorded as of Apr 2, 2016.
In the fiscal fourth quarter, RBC Bearings generated $26.7 million of cash from its operating activities as against $21.6 million in the prior-year quarter. Capital spending increased 4% year over year to $6.5 million.
Total debt for fiscal 2017 came in at $269.8 million, lower than $363.7 million recorded on Apr 2, 2016.
Outlook
RBC Bearings intends to lower its debt burden, introduce share buyback programs and fund growth oriented investments with increased cash flow generation. The company also noted that demand from its major end markets would likely shoot up in the upcoming quarters. Additionally, near-term profitability is expected to improve on the back of solid revenues and the successful integration of the Sargent Aerospace & Defense business (acquired in Apr 2015).
Other Stocks to Consider
Some top-ranked stocks in the industry are listed below:
Caterpillar Inc. (NYSE:CAT) delivered a positive average earnings surprise of 40.25% for the trailing four quarters and currently boasts a Zacks Rank #1 (Strong Buy) . You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies, Inc. (NYSE:AIT) , which sports a Zacks Rank #1 at present, pulled off an average positive earnings surprise of 9.78% over the last four quarters.
Acco Brands Corporation (NYSE:ACCO) currently carries a Zacks Rank #2 and has an average positive earnings surprise of 79.74% for the past four quarters.
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RBC Bearings Incorporated (ROLL): Free Stock Analysis Report
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