Aerospace and industrial equipment maker Barnes Group Inc. (B) on Friday reported a 39 percent decline in profit for the first quarter, as higher sales were more than offset by an increase in expenses that include CEO transition costs. Looking ahead, the company affirmed its fiscal 2013 outlook, provided earlier in the week.
Aerospace segment sales for the first quarter edged up 1 percent from the prior-year period to $98.05 million, as higher aerospace original equipment manufacturing or OEM sales were largely offset by declines in aftermarket repair and overhaul and spare parts sales.
Industrial segment sales surged 32 percent to $165.50 million, driven by Synventive's sales contribution in the latest quarter.
Bristol, Connecticut-based Barnes Group's first-quarter net income decreased to $13.47 million or $0.24 per share from $22.21 million or $0.40 per share in the same quarter last year.
Income from continuing operations for the first quarter declined to $15.4 million or $0.28 per share, from $17.6 million or $0.32 per share in the prior-year period. The latest quarter's results included non-recurring CEO transition costs of $10.5 million pre-tax, or $0.12 per share, associated with the modification of outstanding equity awards granted to the company's former President & CEO.
Excluding this item, adjusted earnings per share from continuing operations for the quarter were $0.40, compared to $0.32 per share in the year-ago quarter. On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales from continuing operations grew 18 percent to $263.55 million from $222.80 million in the same period last year, driven by the sales contribution of the Synventive business. Analysts had a consensus revenue estimate of $335.88 million.
Operating margin declined to 9.5 percent from 11.0 percent in the previous-year quarter.
Looking ahead to fiscal 2013, Barnes forecast reported earnings per share from continuing operations in a range of $1.71 to $1.86. This guidance includes the impacts from the sale of Barnes Distribution North America which closed on April 22, 2013, and the previously announced CEO transition.
The company projects adjusted earnings per share for the year in a range of $1.83 to $1.98, compared to 2012 adjusted earnings per share from continuing operations of $1.52. The company also forecast revenue from continuing operations for the year to grow 17 to 20 percent from 2012.
Analysts expect the company to report earnings of $2.09 per share for the year on revenues of $1.34 billion.
In Friday's regular session, B is trading at $27.32, down $0.25 or 0.91 percent on a volume of 60,287 shares.
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