Barnes Group (NYSE: B) reported Q4 EPS of $0.86, $0.02 better than the analyst estimate of $0.84. Revenue for the quarter came in at $370 million versus the consensus estimate of $376.23 million.

Fourth Quarter 2019:

• Sales of $370 million, down 4% from last year; Organic Sales down 4%
• Operating Margin of 16.5%; Adjusted Operating Margin of 17.2%, up 190 bps
• GAAP EPS of $0.80; Adjusted EPS of $0.86, up 2% versus prior year period

“End market trends experienced throughout the year endured into the fourth quarter, as a weak global industrial manufacturing environment and lingering trade uncertainties unfavorably impacted revenues in our Industrial business, while sustained strength in Aerospace provided a partial offset. Evident in our 2019 performance is the power of our transformed portfolio, which allowed us to generate one of the best financial years in Barnes Group’s long history,” said Patrick J. Dempsey, President and Chief Executive Officer of Barnes Group Inc. “As a Company, we generated record operating profit in 2019 and increased operating margins over the previous year. Aerospace led the way with record sales and operating profit. With solid backlog in place, and an energized workforce, we anticipate another good year in 2020,” added Dempsey.

GUIDANCE:

Barnes Group sees FY2020 EPS of $3.12-$3.32, versus the consensus of $3.42.

Barnes Group expects 2020 organic sales to be up 1% to 3%, with total revenue down slightly given the divestiture of the Seeger business; a 4% impact on sales. Foreign exchange is not anticipated to have a meaningful impact on 2020 sales. Operating margin is forecasted to be in the range of 16.0% to 17.0%. Adjusted earnings are expected to be in the range of $3.12 to $3.32 per diluted share, down 3% to up 3% from 2019’s adjusted earnings of $3.21 per share. Adjusted earnings per share for 2020 are anticipated to exclude a $0.10 impact, primarily taxes, related to the divesture of the Seeger business. Further, the Company forecasts capital expenditures of approximately $60 million and cash conversion of greater than 100% of net income. Excluding the tax charge related to the Seeger divestiture, the effective tax rate for 2020 is expected to be approximately 24.0% to 24.5%.

“2019, while presenting challenges in certain of our Industrial end markets, generated solid results for Barnes Group. As 2020 unfolds, we anticipate organic revenue growth to return, especially after the first quarter. With a well-positioned balance sheet and the expectation of sustained, solid cash generation, we anticipate ongoing investments in both organic growth opportunities and strategic acquisitions, all with an eye towards a strengthened portfolio built to support our future,” said Christopher J. Stephens, Jr., Senior Vice President, Finance and Chief Financial Officer, Barnes Group Inc.

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