RBC Bearings Incorporated RBC is benefiting from persistent strength in the Aerospace/Defense segment. Strength in the commercial aerospace market, driven by strong growth in orders from the OEM (original equipment manufacturer) and the aftermarket verticals, is driving the segment’s performance.
The robust backlog level, along with the company’s strong execution on incremental orders in the commercial aerospace market, has been proving beneficial. In the first six months of fiscal 2025 (ended September 2024), the Aerospace/Defense segment’s revenues increased 18% year over year.
Solid demand for the company’s bearings and engineered component products in the defense market, supported by growth in marine, helicopter and missile applications orders, augurs well for the segment in the quarters ahead. For the third quarter of fiscal 2025 (ended December 2024), RBC Bearings anticipates net sales to be in the range of $390-$400 million, indicating a year-over-year increase in the band of 1-3.6%.
RBC Bearings remains focused on acquiring businesses to gain access to new customers, regions and product lines. The company acquired Carson City, NV-based precision bearings manufacturer Specline in August 2023. Specline’s unique bearing and manufacturing processes expanded RBC Bearings’ aerospace product offerings and boosted the its production capacity.
The company remains committed to increasing shareholders’ value through dividend payments and share repurchases. In the first six months of fiscal 2025, it paid dividends of $11.4 million, flat year over year, and repurchased shares for $8.4 million, up 20% year over year.
RBC’s Price Performance
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In the past three months, this Zacks Rank #3 (Hold) company’s shares have gained 5.2% against the industry’s 1.6% decline.
However, the company’s Industrial segment is witnessing weakness owing to the soft semiconductor machinery market. Also, weak refinery demand is affecting the oil and gas end markets, which remains a concern for the segment. The Industrial segment’s revenues declined 2.5% year over year in the first six months of fiscal 2025.
Also, RBC Bearings is dealing with rising costs and operating expenses. In the first six months of fiscal 2025, the company’s cost of sales increased 1.8% year over year. Selling, general and administrative expenses increased 9.5% year over year in the same period due to increased personnel costs, IT costs and other professional fees.
3 Promising Stocks
Some better-ranked stocks from the same space are discussed below.
Graham Corporation GHM presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter average earnings surprise of 101.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GHM’s fiscal 2025 earnings has been stable at $1.03 per share in the past 30 days.
Applied Industrial Technologies AIT presently carries a Zacks Rank #2 (Buy). It delivered a trailing four-quarter average earnings surprise of 4.9%.
In the past 30 days, the Zacks Consensus Estimate for AIT’s fiscal 2025 earnings has remained unchanged at $9.76 per share.
Gates Industrial GTES currently carries a Zacks Rank of 2. GTES delivered a trailing four-quarter average earnings surprise of 11.8%.
In the past 60 days, the Zacks Consensus Estimate for its 2025 earnings has been stable at $1.34 per share.
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Free: See Our Top Stock And 4 Runners UpRBC Bearings Incorporated (RBC) : Free Stock Analysis Report
Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
Graham Corporation (GHM) : Free Stock Analysis Report
Gates Industrial Corporation PLC (GTES) : Free Stock Analysis Report
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