Barnes Group (B) Q1 Earnings & Revenues Surpass Estimates
Barnes Group Inc. B reported adjusted earnings of 38 cents per share in first-quarter 2024, surpassing the Zacks Consensus Estimate of 35 cents. However, the bottom line declined 19% year over year due to the increasing cost of sales.
Inside the Headlines
Total revenues of $430.6 million beat the Zacks Consensus Estimate of $425 million. The top line increased 28.4% year over year, with organic sales growth of 4%.
Barnes Group reports revenues under two heads, namely Industrial and Aerospace. A brief snapshot of segmental sales is provided below:
Revenues from the Industrial segment amounted to $209 million, down 4% year over year. Also, organic sales were down 4% year over year. Our estimate for segmental revenues was $195.4 million.
The Aerospace segment’s sales totaled $221 million in the first quarter, up 89% year over year. Organic sales increased 19%, and acquisition-boosted sales rose 70%. The upside can be attributed to an 85% surge in Aerospace original equipment manufacturing sales and a 94% rise in aftermarket sales. Our estimate for segmental revenues was $229 million.
Barnes Group, Inc. Price, Consensus and EPS Surprise
Barnes Group, Inc. price-consensus-eps-surprise-chart | Barnes Group, Inc. Quote
Margin Profile
In the reported quarter, Barnes Group’s cost of sales increased 32.6% year over year to $300.1 million. Selling and administrative expenses increased 5.9% to $90.9 million.
Adjusted operating income was $51.1 million, up 37.4% year over year, while the margin increased 80 basis points to 11.9%.
Balance Sheet & Cash Flow
At the end of the first quarter, Barnes Group had cash and cash equivalents of $81.6 million compared with $89.8 million recorded at the end of 2023. Long-term debt was $1.29 billion, up from $1.28 billion at the end of 2023. Liquidity available in the quarter included cash of $82 million and credit under revolving facilities of $344 million.
In the first three months of 2024, B used net cash of $2.3 million from operating activities against $32.2 million generated in the year-ago period. Capital expenditures totaled $12.8 million, up 17.4% year over year. Free cash outflow was $15.2 million against free cash inflow of $21.3 million a year ago.
In the first three months of 2024, Barnes Group rewarded its shareholders with dividends of $8.1 million, nearly flat year over year.
2024 Outlook
For 2024, Barnes Group expects total sales to increase in the range of 13-16% year over year and organic sales to grow 5-8%. Adjusted operating margin is estimated to be 12-14%, while adjusted EBITDA margin is projected to be 20-22%.
GAAP earnings are projected to be between $1.08 per share and $1.28 per share, while adjusted earnings are expected in the band of $1.62-$1.82.
For 2024, management expects capital expenditures of $60-$70 million, while free cash flow is likely to be between $75 million and $85 million. The adjusted effective tax rate is forecast] to be 31-33% for the year.
Zacks Rank & Stocks to Consider
Barnes Group currently carries a Zacks Rank #4 (Sell). Some better-ranked companies from the same space are discussed below:
Applied Industrial Technologies, Inc. AIT presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter average earnings surprise of 8.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AIT’s fiscal 2024 (ending June 2024) earnings has increased 1.2% in the past 60 days.
Ingersoll Rand plc IR currently carries a Zacks Rank of 2 (Buy). IR delivered a trailing four-quarter average earnings surprise of 15.9%.
In the past 60 days, the Zacks Consensus Estimate for Ingersoll Rand’s 2024 earnings has increased 1.6%.
Luxfer Holdings LXFR presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 82.7%.
In the past 60 days, the Zacks Consensus Estimate for LXFR’s 2024 earnings has increased 111.4%.
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Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
Ingersoll Rand Inc. (IR) : Free Stock Analysis Report
Barnes Group, Inc. (B) : Free Stock Analysis Report
Luxfer Holdings PLC (LXFR) : Free Stock Analysis Report