Analysis RBC
RBC Bearings clears its sales forecast as industrial growth revives
The precision-parts maker beat the top of its July sales forecast, even after removing a new acquisition. Industrial sales strengthened, while half-year cash generation also increased.
RBC Bearings had told investors to expect sales of $505 million to $515 million for the quarter ended September 26, 2026, its second quarter of fiscal 2027. It delivered $524.6 million. The small acquisition it completed during the quarter contributed $2 million, so the business would still have cleared the forecast without it.
Industrial customers supplied more of the growth. Industrial sales rose 14.8% from a year earlier, or 14% excluding the acquired business. The division's growth had been just 0.7% in the comparable quarter last year and 8.4% in the previous quarter, each measured against a year earlier. The maker of precision parts for machinery and aircraft is getting stronger support from its industrial customers.
Sales outpaced the forecast
Total sales grew 15.2% from a year earlier. Operating profit rose faster, increasing about 35% to $131.6 million from $97.8 million. RBC kept more profit from each dollar of sales as selling and administrative costs took a smaller share of revenue.
Reported net profit rose 56% to $93.8 million. That increase also benefited from lower interest expense and a lower tax rate, so it should not all be read as stronger factory performance.
RBC's adjusted earnings per share were $3.74, up from $2.88. That measure removes costs including employee share awards and the gradual write-down of assets such as customer relationships acquired in past deals. It supplements the result under standard accounting rules.
The reported gross margin, which measures sales left after production costs, reached 45.6%. That landed inside the 45.5% to 45.75% range forecast in July. The margin included a $1.7 million benefit from tariff refunds, a useful reminder that the sales beat did not mean every measure exceeded expectations.
Cash helped repay the term loan
Cash generated by operations in the first six months of fiscal 2027 rose to $278.2 million from $208.4 million a year earlier. These are half-year figures, separate from the quarterly profit numbers. RBC repaid $173 million of term-loan principal during those six months and said the loan was fully repaid in the second quarter.
Other borrowing remains. The September balance sheet showed $709.8 million of long-term debt and $0.7 million classified as current, alongside $89.3 million in cash.
The new purchase was PSC Couplings, a maker of industrial disc couplings acquired for $24.2 million in cash on August 10. Its modest first contribution makes the wider improvement in industrial sales more meaningful than an acquisition-led jump alone.
Key questions
Is management forecasting another increase from this quarter?
Not necessarily. Its next-quarter sales forecast is $520 million to $525 million, a range that includes the latest $524.6 million result. The projected growth of 12.7% to 13.7% is against the year-earlier quarter.