RBC Bearings (ROLL) delivered mixed Q2 2022 results. Revenue topped consensus estimates, but earnings missed even as the company posted exceptional growth in industrial markets. Additionally, the company registered strong order flow in aerospace and defense products.
RBC Bearings designs, manufactures, and markets precision bearings and products commonly used in industrial aerospace and defense markets. (See Insiders’ Hot Stocks on TipRanks)
Q2 Results
Net sales in Q2 climbed 10% year-over-year to $160.9 million, beating consensus estimates of $159.64 million. Net sales in Industrial Markets was up 31.1% year-over-year as net sales in the aerospace market fell 4.4% year-over-year.
Adjusted net income available to shareholders came in at $23 million, a drop from $23.2 million delivered the same quarter last year. Consequently, diluted EPS landed at $0.89, a decline from $0.93 delivered the same quarter last year, and also missed consensus estimates of $1.03.
RBC Bearings ended the quarter with a backlog of $456.7 million compared to $403 million as of September 26, 2020, and $420.2 million as of July 3, 2021. In early November, RBC Bearings completed the acquisition of Dodge for $2.9 billion.
During the quarter, RBC Bearings started expanding capacity in its aerospace and defense plants to address the strong demand in the market. According to CEO Michael J. Hartnett, there is robust strength in industrial products and continued growth in aerospace and defense segments.
Guidance
For Q3, net sales are expected to range between $245 million and $255 million, representing a growth rate of between 68% and 74.8%.
In September, Truist Financial analyst Michael Ciarmoli upgraded the stock to a Buy from Hold and increased the price target to $250 from $225, implying 9.5% upside potential to current levels.
Consensus among analysts is a Moderate Buy based on one Buy.
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