RBC Bearings Rolling Right Along

RBC Bearings Inc. (ROLL) is an international manufacturer and marketer of highly engineered precision bearings and components. Founded in 1919, the company is primarily focused on producing highly technical or regulated bearing products requiring sophisticated design, testing and manufacturing capabilities for the diversified industrial, aerospace and defense markets. Headquartered in Oxford, Connecticut, RBC Bearings currently employs approximately 1,850 people and operates 16 manufacturing facilities in three countries.

On Jun 12, RBC Bearings reported fiscal fourth-quarter earnings of 47 cents per share, up from 33 cents in the year-ago period and six cents above expectations. Driving the earnings growth, revenues rose 7% to $81 million, just beating analysts’ expectations of $80.9 million. For the full-year, the company posted a profit of $1.33 per share, up from 76 cents per share in 2006. Revenues rose to $306.1 million from $274.5 million.

This company has exceeded analysts’ expectations for four consecutive quarters and has never reported a negative surprise. After the latest release, analysts raised their 2008 profit projections by 14 cents to $1.90. Next year’s projections have been guiding higher as well and currently stand at $2.32, implying year-over-year earnings growth of 22%. Furthermore, the company is ranked a number one out of 15 companies in our Metals Procurement & Fabrication category.

The company’s expected 2008 earnings growth of 21.7% is a full six percentage points above the forecasted industry growth. Furthermore, over the next five years, ROLL is expected to grow earnings at a 16.7% annual rate, just beating the expected industry average of 16.5%. Lastly, the company’s ROE of 21.4% more than doubles the peer group average of 10.5%.

After returning 76.4% in 2006, ROLL has climbed an impressive 43.9% year-to-date.

ROLL 1-yr chart: