Barnes Group (B) Tops Q4 EPS by 4c, Beats on Revenues; Offers FY18 EPS Guidance Above Consensus

Barnes Group (NYSE: B) reported Q4 EPS of $0.71, $0.04 better than the analyst estimate of $0.67. Revenue for the quarter came in at $373 million versus the consensus estimate of $357.77 million.

Fourth Quarter 2017:

• Sales of $373 million, up 15% from last year’s fourth quarter; Organic Sales up 10%
• Operating Margin of 13.3%; Adjusted Operating Margin of 13.7%, down 230 bps
• GAAP EPS of ($1.10) including a $1.79 charge for new U.S. tax legislation
• Adjusted EPS of $0.71, up 6% versus prior year

2018 Outlook:

• 2018 Expected Sales Growth of 4% to 6%; Organic Sales Growth of 3% to 5%
• 2018 Adjusted Net Income of $2.98 to $3.13 per Share; Up 3% to 9% from 2017 Adjusted Net Income of $2.88 per Share

2018 Outlook

Barnes Group expects 2018 total revenue growth of 4% to 6%, with organic sales growth of 3% to 5%. Foreign exchange is anticipated to benefit revenues by approximately 1% for the year. Operating margin is forecasted to be in the range of 15.5% to 16.5%. Earnings are expected to be in the range of $2.98 to $3.13 per diluted share, up 3% to 9% from 2017’s adjusted diluted earnings per share of $2.88. Further, the Company anticipates capital expenditures of between $60 million to $65 million and cash conversion of greater than 100% of net income. Based upon our forecasted geographic mix of earnings, the effective tax rate for 2018 is expected to be between 25% and 26%. The Company does not expect the new Revenue Recognition standard to have a material impact on future revenues or net income.

“2017 was a good year for Barnes Group even as we dealt with some operational challenges within one of our Industrial businesses. As we move beyond this in the first half of 2018, we anticipate solid revenue growth, improved financial performance, and good cash generation. With our supportive balance sheet, we will continue to invest in organic growth opportunities and strategic acquisitions that position us well for the future,” said Christopher J. Stephens, Jr., Senior Vice President, Finance and Chief Financial Officer, Barnes Group Inc.

GUIDANCE:

Barnes Group sees FY2018 EPS of $2.98-$3.13, versus the consensus of $2.97.

For earnings history and earnings-related data on Barnes Group (B) click here.

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