RBC Bearings Inc. (ROLL) reported better-than-expected results for second-quarter 2015 (ended Sep 27, 2014). Adjusted earnings came in at 70 cents per share, increasing 9.4% from 64 cents earned in the year-ago quarter.
Also, the bottom line surpassed the Zacks Consensus Estimate of 69 cents.
Revenues
RBC Bearings generated net sales of $112.6 million, up 10.4% year over year but in line with the Zacks Consensus Estimate of $113 million. The year-over-year improvement can be attributed to increased sales in the aerospace and defense markets, along with a hike in the industrial market.
Revenue details of each segment are being discussed below:
Plain Bearings segment revenues (51% of second-quarter total sales) were up 8.8% year over year to $57.5 million. Roller Bearings segment sales (29.8%) rose 10.7% to $33.5 million. Ball Bearings segment sales (12.5%) were $14.1 million, up 25.8% year over year. Other sales (6.7%) were $7.5 million, down 1.9% year over year.
Exiting the quarter, backlog was $218 million versus $222.3 million as on Sep 28, 2013.
Margins
RBC Bearings’ cost of sales increased 18.6% year over year, representing 64.7% of total revenue versus 60.2% in the year-ago quarter. Adjusted gross margin fell 120 basis points (bps) year over year to 38.6%. Total operating expenses totaled $21.5 million, up 12.5% year over year.
Adjusted operating income grew 8.2% year over year, with margin coming in at 21.9% versus 22.4% in the year-ago quarter.
Balance Sheet
Exiting second-quarter fiscal 2015, RBC Bearings had cash and short-term investments of $109.4 million as compared with $104.5 million in the previous quarter. Total debt stood at $9.6 million versus $10.3 million reported in the preceding sequential quarter.
Cash Flow
In second-quarter fiscal 2015, RBC Bearings generated cash of $17.8 million from its operating activities, up from $4.2 million in the year-ago quarter. Capital spending declined 9.3% year over year to $8 million.
In first-quarter fiscal 2015, the company paid dividends amounting to $46 million and repurchased stocks worth $4.7 million.
With a market capitalization of $1.4 billion, RBC Bearings currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the machinery industry include Barnes Group Inc. (B), Parker-Hannifin Corporation (PH) and AO Smith Corp. (AOS). All these stocks hold a Zacks Rank #2 (Buy).
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