Rexnord Corporation (RXN) announced a public offering of 10 million shares held by certain affiliates of Apollo Global Management, LLC (APO). The news surfaced within a week of releasing the first-quarter fiscal 2015 (ended Jun 30) results by the company.
As communicated, Rexnord will not directly offer shares and thus, will not be entitled to receive any proceeds from this public offering. Prior to this, the company carried out a similar public offering of 15 million shares held by Apollo in May, while roughly 3 million shares were offered in Jan 2014. An additional 2.25 million shares were offered to underwriters both in May and January.
Exiting fiscal 2014, Apollo Global Management, Rexnord’s largest shareholder, owned nearly 42% of the company’s common shares. Any change in ownership of shares by Apollo directly influences Rexnord.
Shares of Rexnord Corporation has climbed 3.3% since the release of first-quarter results on Aug 6. A brief snapshot of the quarterly results has been provided below.
Adjusted earnings came in at 26 cents per share, up 18% year over year while revenues edged up 0.2% to $510 million. Excluding those generated from Mill Products, revenues increased by 2%. Earnings guidance for fiscal 2015 is maintained at $1.60−$1.70 per share. Core sales growth is expected within 3−5%, including 4−6% for the second half of 2014.
The Zacks Consensus Estimate for Rexnord Corporation is pegged at $1.58 for fiscal 2015 and $1.85 for fiscal 2016. These estimates represent year-over-year growth rates of 17.9% and 17.1% respectively.
With a market capitalization of $2.8 billion, Rexnord Corporation presently carries a Zacks Rank #3 (Hold). Two better-ranked stocks in the diversified machinery industry include CommScope Holding Company, Inc. (COMM) and AO Smith Corp. (AOS). While CommScope Holding sports a Zacks Rank #1 (Strong Buy), AO Smith holds a Zacks Rank #2 (Buy).
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