Regal Beloit Misses on Earnings - Analyst Blog
02 Mai 2013 - 1:30PM
Zacks
Industrial equipment manufacturer
Regal Beloit Corporation (RBC) reported first
quarter 2013 net income of $50.7 million or $1.09 per share
compared to $49.9 million or $1.16 per share in the year-ago
quarter. The year-over-year decrease in earnings per share was
primarily due to higher outstanding shares in the reported quarter.
The reported earnings missed the Zacks Consensus Estimate by 6
cents. Excluding one-time items, adjusted earnings for first
quarter 2013 were $1.08 per share vis-à-vis $1.15 per share in the
year-earlier quarter.
Net sales declined 3.7% year over year to $778.2 million in the
reported quarter due to the continued challenging macroeconomic
environment. Unico, the wholly-owned subsidiary of the company,
recorded strong sales during the quarter, while the residential
HVAC (heating, ventilation, and air conditioning) business expanded
slightly. However, Regal Beloit witnessed low demand for its other
businesses.
Segment Analysis
Revenues from the Electrical segment declined 2.8%
year over year to $711.0 million as the U.S. commercial and
industrial markets performed below expectations. However, revenue
from the North American residential HVAC sub-segment increased 3.5%
year over year.
Net sales in the Mechanical segment were down
12.2% year over year to $67.2 million despite accretive
acquisitions.
By geographic divisions, sales from outside the U.S. accounted for
33.6% of the total revenue and decreased 6.8% year over year. By
product class, net sales of high efficiency products were up 3.5%
and contributed 19.6% to total sales in the reported quarter.
Margins
Regal Beloit’s gross profit for the reported quarter was $199.5
million versus $197.6 million in the year-ago quarter. While gross
profit of the Electrical segment increased to $181.3 million from
$178.8 million in the prior-year quarter, it decreased marginally
in the Mechanical segment to $18.2 million from $18.8 million in
the year-earlier quarter.
Total operating profit declined to $75.9 million in first quarter
2013 from $79.1 million in the year-ago period. By segments,
operating profit decreased to $67.3 million in the Electrical
segment from $69.4 million, while Mechanical segment’s operating
profit was down from $9.7 million to $8.6 million in the reported
quarter.
Balance Sheet and Cash flows
At quarter-end, Regal Beloit’s cash and cash equivalents were
$411.9 million with long-term debt of $754.5 million.
Net cash provided by operating activities in the quarter was $66.0
million compared with $68.5 million in the year-ago quarter. Free
cash flow represented 91.7% of net income for the reported quarter.
Guidance
Management expects the listless demand in the North American
commercial and industrial markets to continue in the second
quarter, adversely affecting its performance in both its operating
segments. Regal Beloit also expects unfavorable market dynamics in
the HVAC sub-segment. Consequently, the company expects GAAP
earnings in the range of $1.17 to $1.25 per share and adjusted
earnings within $1.19 to $1.27.
Regal Beloit currently has a Zacks Rank #3 (Hold). Other players in
the industry worth mentioning include Alamo Group,
Inc. (ALG), Komatsu Ltd. (KMTUY), and
AO Smith Corp. (AOS), each carrying a Zacks Rank
#2 (Buy).
ALAMO GROUP INC (ALG): Free Stock Analysis Report
SMITH (AO) CORP (AOS): Free Stock Analysis Report
KOMATSU LTD ADR (KMTUY): Get Free Report
REGAL BELOIT (RBC): Free Stock Analysis Report
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