Power generation products manufacturer Regal-Beloit Corp. (RBC) Monday announced that sales and earnings for the second quarter are currently expected to be similar to those of the first quarter. Previously, the company had expected the second quarter to show sequential sales and earnings growth from the first quarter.
The Beloit, Wisconsin-based company noted that its lower operational expectations for the second quarter are driven by current anticipation that it would not experience seasonal increases in revenue and that the inventory liquidation by its customers would continue into the second quarter.
Earlier, the company believed that would experience normal seasonal sales growth, and an end to inventory liquidation by its customers. It also expected the completion of the company's internal inventory reduction efforts.
However, the company noted that it sees sales and earnings growth beyond the second quarter. The company added that the ongoing plant restructuring, lower raw material costs and the increasing demand for energy efficient products would contribute to the growth.
Earlier in the month, KeyBanc Capital downgraded Regal-Beloit shares to 'Hold' from 'Buy'. The brokerage maintained its 2009 EPS estimate of $2.35. Analyst Jeffrey Hammond downgraded the stock as risk-reward is more balanced.
In Monday's regular trading session, RBC is currently trading at $37.87, down $2.94 or 7.20% on a volume of 0.23 million shares.
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