Rexnord (RXN) Tops Q2 EPS by 4c, Revenues Beat; Boosts FY19 Operating Outlook

Rexnord (NYSE: RXN) reported Q2 EPS of $0.46, $0.04 better than the analyst estimate of $0.42. Revenue for the quarter came in at $525 million versus the consensus estimate of $515.4 million.

• Net sales were $525 million and increased 16% year over year (+9% core sales(1), +8% acquisitions, -1% foreign currency translation).
• Net income from continuing operations was $46 million (diluted EPS of $0.37), compared with the comparable $33 million (diluted EPS of $0.26) in the year-ago quarter.
• Net loss(2) was $43 million (diluted loss per share of $0.30), including the $84 million loss from discontinued operations, and compared with net income(2) of $24 million (diluted EPS of $0.23) in the year-ago quarter.
• Adjusted EPS(1) increased 44% year over year and was $0.46 compared with $0.32 in the year-ago quarter.
• Adjusted EBITDA(1) increased 20% year over year and was $115 million (21.9% of net sales) compared with $96 million (21.0% of net sales) in last year\'s second quarter.
• Net debt leverage ratio decreased to 2.5x.
• Signed definitive agreement to sell VAG.

Adams continued, “We are increasing our outlook for our fiscal 2019. Our execution continues to be very sharp, demand trends are favorable, and we have great confidence in our ability to manage the price/cost equation. Our revised outlook includes net income from continuing operations to be in a range of $147 million to $154 million, our Adjusted EBITDA(1) to be in a range of $433 million to $443 million, and our free cash flow(1) to exceed net income. We also expect our core growth to be toward the upper end of the mid-single digit range for the year. We believe our improved outlook balances our solid execution in the first six months of our fiscal year with a prudent approach to forecasting the remaining six months.”

For earnings history and earnings-related data on Rexnord (RXN) click here.

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