RBC Bearings (ROLL) Q2 Earnings Top Estimates, Revenues Miss

RBC Bearings Incorporated (NASDAQ:ROLL) reported mixed second-quarter fiscal 2019 results, wherein the bottom line beat the Zacks Consensus Estimate but the top line missed the same.

Earnings/Revenues

Quarterly adjusted earnings came in at $1.22 per share, up 47% year over year. It outpaced the consensus estimate of $1.08.

Net sales in the reported quarter came in at $172.92 million, up 5.2% year over year. However, the figure missed the Zacks Consensus Estimate of $174 million. Notably, revenues improved 7.3% year over year, organically.

Revenues in the Plain bearings segment were $77.5 million, up 7% year over year. The Roller bearings segment’s top line improved 14.6% to $37 million. Quarterly revenues in the Ball bearings segment came in at $18 million, up 9.1%. However, the Engineered products segment’s revenues were $40.4 million, down 6.3%.

Costs/Margins

Cost of sales in the reported quarter came in at $105.1 million, up 2.6% year over year. Adjusted gross margin was 39.2%, up 150 basis points (bps).

Aggregate operating expenses in the fiscal second quarter were $31.9 million, up from $36.5 million recorded in the year-ago quarter. Adjusted operating margin was 20.8%, up 530 bps year over year.

Balance Sheet/Cash Flow

Exiting the fiscal second quarter, RBC Bearings had cash and cash equivalents of $60.4 million, up from $42.9 million recorded as of Sep 30, 2017. Total debt was $124.5 million, down from $220.2 million reported a year ago.

In the first six months of fiscal 2019, the company generated $57.9 million cash from operating activities, down from $64 million recorded in the year-ago period. Capital expenditures in the quarter totaled $10.8 million, up from $7 million incurred in second-quarter fiscal 2018.

Outlook

RBC Bearings intends to boost its near-term competency on the back of solid industrial and aerospace sales. The company anticipates generating revenues of $174-$176 million in third-quarter fiscal 2019 (estimating year-over-year growth of 4.3-5.5%).

Zacks Rank & Key Picks

RBC Bearings currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same space are Applied Industrial Technologies, Inc. (NYSE:AIT) , Graco Inc. (NYSE:GGG) and Luxfer Holdings PLC (NYSE:LXFR) . Notably, all these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Applied Industrial Technologies surpassed estimates in each of the trailing four quarters, the average beat being 11.67%.

Graco exceeded estimates twice in the trailing four quarters, the average beat being 4.05%.

Luxfer Holdings surpassed estimates thrice in the trailing four quarters, the average beat being 24.27%.

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