Barnes Q1 Profit Surges, Adj. EPS Miss View; Updates FY14 Forecast - Update

(RTTNews) - Aerospace and industrial manufacturer Barnes Group, Inc. (B) reported Friday a a surge in first-quarter profit boosted by lower charges as well as higher net sales. Adjusted earnings per share, meanwhile, missed analysts' estimates, while top line beat their view. Further, the company trimmed its fiscal 2014 forecast for reported earnings and organic sales growth, while it lifted the lower end of its adjusted earnings forecast range.

President and Chief Executive Officer Patrick Dempsey said, "Barnes Group's first quarter performance positions us well for continued profitable growth in 2014. Our individual businesses had varied starts to the year, yet overall results were solid. … The first quarter performance allows us to affirm our 2014 continuing operations outlook while tightening the expectation towards the top end of the range."

For the first quarter, net income climbed 68.9 percent to $22.8 million from last year's $13.5 million. Earnings per share grew 70.8 percent to $0.41 from last year's $0.24. Excluding prior year's loss from discontinued operations, income climbed 46 percent year-over-year.

The latest results included $0.06 per share impact of Männer short-term purchase accounting adjustments, and $0.03 per share of costs related to the close of production operations at Associated Spring's Saline, Michigan facility. The prior year results included $0.12 per share of non-recurring CEO transition costs.

Adjusted earnings, which excluded items, was $0.50 per share, compared to last year's $0.40 per share. On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.52 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales climbed 18.4 percent to $312.1 million from $263.5 million a year ago, while five analysts estimated revenues of $306.34 million for the quarter. The sales growth reflected organic sales growth of 4 percent and the sales contribution from the recently acquired Männer business..

Aerospace delivered 10 percent organic sales growth, and while Industrial's organic sales were essentially flat, organic orders exceeded 7 percent.

Quarterly operating margin was 11.3 percent, 1.8 basis points higher than last year's 9.5 percent. Adjusted operating margin went up 20 basis points to 13.7 percent.

Looking ahead for fiscal 2014, Barnes now expects earnings from continuing operations to be in the range of $1.98 to $2.08 per share, compared to prior estimate of $2.02 to $2.17 per share.

Excluding items, adjusted earnings per share from continuing operations are now anticipated to be in the range of $2.20 to $2.30, up 20 percent to 26 percent from 2013's adjusted earnings per share of $1.83. Earlier, the company expected adjusted earnings per share from continuing operations to be in the range of $2.15 to $2.30. Street is currently looking for full-year 2014 earnings of $2.26 per share.

The company continues to expect 2014 total revenue to grow 14 percent to 17 percent on a reported basis. Meanwhile, on an organic basis, revenue is now projected to grow 4 percent to 7 percent, compared to previous estimate of 5 percent to 8 percent increase.

Barnes shares closed Thursday's trading at $38.91, down $0.09 or 0.23 percent.