Power generation products manufacturer Regal Beloit Corp. (RBC) on Monday reported a 55.9% year-over-year drop in profit for the second quarter, hurt by lower margins and higher expenses as well as a 25% sales decline. The company also provided earnings forecast for the second quarter, which is in line with current analysts' expectations. In a statement, chairman and chief executive officer, Henry Knueppel said, "The second quarter proved to be better than our expectations. We were particularly pleased with the results of our inventory reduction efforts, which exceeded our stated goal. We also benefited from the impact of the continued move to more energy efficient motor products. From a cost perspective, our cost reduction efforts are on plan and we expect to see even greater benefits from these activities as we move into the second half of the year."
The Beloit, Wisconsin-based company reported net income of $16.45 million or $0.47 per share for the second quarter, down from $37.31 million or $1.11 per share in the prior-year quarter.
On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.42 per share for the second quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter dropped 25% to $454.55 million from $606.32 million in the same quarter last year, but missed ten Wall Street analysts' consensus estimate of $461.28 million.
Sales for the second quarter include $16.3 million of sales attributable to the Hwada acquisition completed in April 2008, the Dutchi acquisition acquired in October 2008 and the Customer Power Technology acquisition completed on January 2009.
Sales for the electrical segment decreased 24.7% from the prior-year quarter to $407.24 million, while mechanical segment sales for the quarter totaled $47.31 million, down 27.5% from the corresponding quarter last year.
Income from operations for the second quarter dropped to $29.47 million or 6.5% of sales, from $67.49 million or 11.1% of sales, in the prior-year quarter, while total operating expenses was $65.16 million or 14.3% of sales, up from $63.68 million or 10.5% of sales, in the year-ago quarter.
Gross profit for the quarter was $94.62 million, down from $131.18 million in the comparable quarter a year ago, while gross profit margin declined 80 basis points to 20.8% from last year, due to the fixed cost absorption impact of lower unit volumes production. The company ended the second quarter with cash and cash equivalents of $290.55 million, compared to $87.71 million at end of the prior-year quarter.
For the second six moths, the company reported net income of $29.24 million or $0.86 per share, down from $68.74 million or $2.06 per share in the prior-year period.
Net sales for the year-to-date period dropped to $897.82 million from $1.14 million in the same period last year.
Looking ahead to the third quarter, the company anticipates earnings in a range of $0.60 to $0.68 per share. Analysts expect the company to report earnings of $0.61 per share for the second quarter.
"We continue to expect a difficult global sales environment as we move into the third quarter. The impact of the cost reduction and plant rationalization efforts will, however, improve the relative profitability of our business," Knueppel added.
RBC closed Monday's regular trading session at $47.56, up $0.75 on a volume of 0.62 million shares, higher than the three-month average volume of 0.44 million shares.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.