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Regal Beloit Q4 Profit Rises, Tops View; Guides Q1 In Line

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Power generation products manufacturer Regal Beloit Corp. (RBC: Quote) reported Monday a profit for the fourth quarter that increased from last year, boosted by improved operating margins and revenue growth. Both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also provided earnings forecast for the first quarter, in line with Street view.

"Our performance in the fourth quarter is another indicator that the diversification of our end markets and our ability to be a consistent and successful acquirer allow us to perform well through difficult cycles. A number of our key business units performed well," CEO Mark Gliebe said in a statement.

The Beloit, Wisconsin-based company reported net income of $33.45 million or $0.80 per share for the fourth quarter, higher than $25.24 million or $0.65 per share in the prior-year quarter.

Results for the latest quarter primarily include incremental warranty expense of $0.23 per share. Excluding items, adjusted net income for the quarter would have been $0.93 per share.

On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.70 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 30.8 percent to a record of $727.01 million from $555.68 million in the same quarter last year, and topped eleven Wall Street analysts' consensus estimate of $721.59 million by a whisker.

The results for the latest quarter was boosted by $198.5 million of incremental net sales from the businesses acquired within the last twelve months.

Sales for the electrical segment for the quarter rose 33.6 percent from the prior-year quarter to $660.3 million, and mechanical segment sales totaled $66.7 million, up 8.5 percent from last year.

Geographically, total international sales increased 24.6 percent from the year-ago quarter.

Operating margins expanded 120 basis points to 8.1 percent as operating expenses contracted 120 basis points and gross margins grew 10 basis points.

"Revenues in our commercial and industrial motors business, our mechanical businesses and Unico remained strong, offsetting continued weakness in HVAC. The EPC integration remains on track, and the performance of the business helped the Company exceed our guidance for the quarter. EPC is now a key positive contributor to the Company," Gliebe said.

For fiscal 2011, the company reported net income of $152.29 million or $3.79 per share, compared to $149.38 million or $3.84 per share in the prior year.

Excluding items, adjusted net income for the year would have been $4.71 per share. Analysts expected the company to report earnings of $4.32 per share for fiscal 2011.

Net sales for the full year grew 25.5 percent to $2.81 billion from $2.24 billion in the previous year. Street was looking for full-year 2011 revenues of $2.80 billion.

Looking ahead to the first quarter, the company anticipates earnings in a range of $1.07 to $1.13 per share. Analysts expect the company to report earnings of $1.07 per share for the quarter.

"As we look forward into the first quarter of fiscal 2012, we expect continued strength from our commercial and industrial motors business, our mechanical businesses and Unico, and continued softness in residential HVAC applications," Gliebe added.

RBC closed Monday's regular trading session at $61.72, up $0.09 or 0.15% on a volume of 0.89 million shares.

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by RTT Staff Writer

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