Electrical and mechanical product maker Regal Beloit Corp. (RBC), Thursday increased its earnings guidance for the third quarter ended September 26, 2009, despite a 25% anticipated decline in revenue. The company currently expects earnings in the range of $0.80 to $0.85 per share which is an increase from the prior expected range of $0.60 to $0.68 per share.
On average, 10 analysts polled by Thomson Reuters currently expects the company to report earnings of $0.65 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue is expected to decline approximately 25%, compared to the third quarter of 2008, which is consistent with prior guidance. Analysts currently expects the company to report revenue of $473.19 million for the quarter.
Beloit, Wisconsin-based Regal Beloit noted the improvement in earnings from the prior expectations was mainly due to a lower effective tax rate, lower raw material costs, the sales mix of energy efficient products and cost reductions.
The current guidance for the effective tax rate is 27.0% as compared to the prior guidance of 30.0%. This change is driven by the favorability in raw material costs and sales of energy efficient products which continue to grow at an accelerated pace and the cost reductions.
Regal Beloit is scheduled to release its third quarter financial results on November 2, 2009. At this time, the company expects the fourth quarter to reflect a sequential decrease in sales driven by the normal seasonal patterns, a normalized tax rate and less favorable raw material costs.
RBC closed Thursday's regular trading at $47.24, up 2.07 or 4.58%, on a volume of 501K shares on the NYSE. In after hours, the stock further gained 0.67 or 1.42%, trading at $47.91.
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