Zacks Investment Research downgraded RBC Bearings Inc. (ROLL) to a Zacks Rank #5 (Strong Sell) on Feb 13, 2015. Going by the Zacks model, companies holding a Zacks Rank #5 have strong chances of performing worse than the broader market.
Why the Downgrade?
Amid global uncertainties, RBC Bearings' outlook for 2015 remains gloomy. The company anticipates negative impact from foreign currency translations to hurt its top-line growth in fourth-quarter 2014. Weak demand in the defense and aerospace business might prove to be another major headwind.
Let's now take a look into how RBC Bearings performed in third-quarter fiscal 2015 (ended Dec 27, 2014). Adjusted earnings came in at 62 cents per share, surpassing the Zacks Consensus Estimate by a penny. Revenue growth of 5.7% was partially offset by a 4.2% hike in costs of sales.
Also, total operating expenses grew 11.8% year over year, while interest expense recorded 4.3% growth. Exiting the quarter, backlog was $217.5 million, down compared with $218.6 million as on Dec 28, 2013.
Over the last 30 days, the Zacks Consensus Estimate decreased by 5.5% to $2.73 for fiscal 2015 and 7.7% to $3.13 for fiscal 2016.
Other Stocks to Consider
RBC Bearings Inc. currently has a market capitalization of $1.4 billion. Some better-ranked stocks in the industry include II-VI (IIVI), Kadant Inc. (KAI) and Pioneer Power Solutions, Inc. (PPSI). While II-VI sports a Zacks Rank #1 (Strong Buy), both Kadant and Pioneer Power Solutions carry a Zacks Rank #2 (Buy).
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