With first-quarter earnings drawing to a close, industry peers are doing various analysis and comparisons to gauge the underlying metrics and relative performance. Let us perform a similar comparative analysis between two stocks in the Zacks Industrial Products sector— Regal Beloit Corporation RBCand IDEX Corporation IEX— to pick the better investment option.
Earnings Scoresheet
Regal Beloit reported decent first-quarter 2018 results, supported by strong organic sales growth and favorable foreign currency translation impact. On a GAAP basis, the industrial goods manufacturer reported net income of $58.4 million or $1.31 per share compared with $46.3 million or $1.02 per share in the year-earlier quarter. The year-over-year improvement was primarily due to higher revenues across segments. Adjusted earnings for the reported quarter were $1.34 per share compared with $1.07 in the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of $1.26. Net sales increased to $878.8 million from $813.5 million in the year-earlier quarter, driven by strong organic sales growth across all three operating segments. Moreover, quarterly revenues beat the Zacks Consensus Estimate of $867 million.
IDEX reported strong first-quarter results with all-time high revenues, operating income and earnings driven by healthy organic growth and diligent execution of operational plans. GAAP earnings for the reported quarter were $99 million or $1.27 per share compared with $75.9 million or 99 cents per share in the year-earlier quarter. The year-over-year improvement was primarily attributable to top-line growth. Excluding restructuring and other non-recurring items, adjusted earnings for the reported quarter were $1.29 per share, which beat the Zacks Consensus Estimate of $1.24. Net sales came in at $612.3 million compared with $553.6 million in the year-ago quarter. Quarterly sales exceeded the Zacks Consensus Estimate of $601 million. The top-line increase was primarily attributable to organic growth of 7%. Investments in product innovations, business development and reallocation of resources led to growth in revenues across all segments of the company, which helped drive total revenues.
Based on first-quarter earnings, there appears to be no clear favorite as Regal Beloit has an edge over IDEX with respect to earnings surprise percentage, while it is just the opposite with respect to revenue surprise percentage.
Price Performance
Over the past month, Regal Beloit has outperformed IDEX with an average return of 8.7% against a loss of 3.1% for the latter while the sector declined 1.7%. Based on the price performance, Regal Beloit appears to be a clear winner.