Regal-Beloit Offers Common Stock - Analyst Blog
13 Dezember 2012 - 4:30PM
Zacks
Headquartered in Beloit, Wisconsin,
Regal-BeloitCorporation
(RBC) recently issued a public offering of 2,750,000 shares of its
common stock. The electrical and mechanical motion control products
manufacturer also intends to provide the underwriters an option to
buy up to an added 412,500 shares of common stock in order to cover
over-allotments.
Underwriters to this offering are
Credit Suisse Securities (USA) LLC, a subsidiary of Credit
Suisse (CS) and Robert W. Baird & Co. Incorporated.
The proceeds from the offerings are expected to aid the company’s
future acquisitions along with other general corporate and working
capital expenses.
The latest capital raising
initiatives are likely to help the company minimize its total debt
burden to a considerable extent. Further, the company will be able
to raise its capital ratios with this capital spending which in
turn will facilitate the company’s future growth prospects and
acquisition opportunities. The strategic efforts are also aimed at
increasing the liquidity of the company.
However, even though liquidity will
improve in the short-term for the company, an increase in the
number of outstanding shares may prove to be an extra burden for
Regal-Beloit in the long run, considering its steady and regular
dividend payout strategy.
Earlier, the company had reported
adjusted diluted earnings per share of $1.32 in the third quarter
of 2012 compared to $1.31 per share in the year-ago quarter and
$1.50 in the second quarter of 2012. The results failed to meet the
Zacks Consensus Estimate of $1.37 per share.
Exiting the third quarter,
Regal-Beloit’s cash and cash equivalents were $185.8 million versus
$190.9 million in the previous quarter. Long-term debt at the end
of 3Q12 was $781.7 million versus $899.8 million at the end of the
previous quarter.
In a different story, the company
recently announced to pay its third-quarter dividend of $0.19 per
share. The dividend will be paid on January 18, 2013, to
shareholders of record as of December 28, 2012.
Regal-Beloit is operating in a
highly competitive industry. Some of the competitors in electric
motor, power generation and mechanical motion control markets are
ABB Ltd. (ABB) and Emerson Electric
Co. (EMR) who enjoy greater financial and other resources
than the company.
The current Zacks Consensus
Estimates of Regal-Beloit for the fourth quarter of 2012 and for
2012 are 73 cents and $4.71, representing year-over-year growth of
(21.0%) and 0.1%, respectively. The company currently retains a
Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.
However, we are maintaining a long-term ‘Neutral’ recommendation on
the stock.
ABB LTD-ADR (ABB): Free Stock Analysis Report
CREDIT SUISSE (CS): Free Stock Analysis Report
EMERSON ELEC CO (EMR): Free Stock Analysis Report
REGAL BELOIT (RBC): Free Stock Analysis Report
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