RBC Bearings Incorporated’s RBC third-quarter fiscal 2024 (ended December 2023) adjusted earnings of $1.85 per share missed the Zacks Consensus Estimate of $1.91. Nevertheless, the figure increased 12.8% from the year-ago adjusted earnings of $1.64 per share, supported by higher revenues.

Revenue Details

In the quarter under review, RBC Bearings’ revenues were $373.9 million, indicating an increase of 6.3% from the year-ago quarter’s level. However, the figure missed the Zacks Consensus Estimate of $377 million.
While exiting the reported quarter, RBC had a backlog of $652.1 million, up 6.3% year over year.

The company currently has two reportable segments, namely Aerospace/Defense and Industrial. Its segmental performance for the fiscal third quarter is briefly discussed below:

Industrial revenues of $244.6 million (representing 65.4% of the quarter’s revenues) were down 0.6% year over year.
Aerospace/Defense revenues totaled $129.3 million (representing 34.6% of the quarter’s revenues), increasing 22.6% year over year.

RBC Bearings Incorporated Price, Consensus and EPS Surprise

RBC Bearings Incorporated price-consensus-eps-surprise-chart | RBC Bearings Incorporated Quote

Margin Profile

In the reported quarter, RBC Bearings’ cost of sales increased 5% year over year to $215.9 million. Gross profit increased 8.2% to $158 million. The margin increased 80 basis points (bps) to 42.3%.

Selling, general and administrative expenses were $63.9 million, up 12.5% year over year. Adjusted EBITDA was $109.5 million, up 3%. The EBITDA margin was 29.3%, down 10 bps year over year.

Adjusted operating income increased 5.4% to $75.5 million. The adjusted margin decreased 20 bps to 20.2%. Net interest expenses were $19.3 million compared with $20.9 million in the year-ago quarter.

Balance Sheet and Cash Flow

At the time of exiting the fiscal third quarter, RBC Bearings had cash and cash equivalents of $71.6 million compared with $82 million at the end of the year-ago fiscal quarter. Total debt was $1.26 billion, down from $1.46 billion at the end of the year-ago fiscal quarter.

In the first nine months of fiscal 2024, RBC Bearings generated net cash of $195.3 million from operating activities, increasing 30.8% from the previous-year period’s number. Capital expenditure was $23.7 million, decreasing 19.9% from the year-ago quarter.

In the first nine months of fiscal 2024, RBC Bearings repurchased shares for $7.6 million, increasing 15.4% year over year.

Outlook

For the fourth quarter of fiscal 2024, RBC Bearings anticipates net sales to be $405-$415 million, suggesting an increase of 2.7-5.2% from the year-ago figure of $394.4 million.

For fiscal 2024, the company expects net sales to be approximately $1.55 billion. It anticipates gross margins to be in the low to mid-40s range.