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Machinery company Rexnord Corporation recently priced an offering of $500 million of 4.875% senior notes due Dec 15, 2025. Subject to customary closing conditions, this offering is anticipated to close on Dec 7, 2017.
As noted, the senior notes will be issued by Rexnord’s two subsidiaries — RBS Global, Inc. and Rexnord LLC — and will be guaranteed by the company. Interest rate of 4.875% will be paid semiannually on Jun 15 and Dec 15, starting from Jun 15, 2018.
Rexnord intends to use the net proceeds from the issuance to lower its debt balance. It will primarily resort to refinancing and alterations in terms of some credit agreements.
Exiting second-quarter fiscal 2018 (ended Sep 30, 2017), Rexnord had long-term debt of approximately $1,599.4 million, down 20 basis points sequentially while its net debt leverage ratio for the quarter was 2.9. Also, the company states that it has repaid debts of approximately $8.2 million in the first half of year. Notwithstanding Rexnord’s efforts to reduce its debt, we believe that, if unchecked, huge debt levels will increase its financial burden and prove detrimental to profitability.
With a market capitalization of $2.6 billion, Rexnord presently carries a Zacks Rank #3 (Hold). The stock’s earnings estimates are currently pegged at $1.26 for fiscal 2018 (ending March 2018) and at $1.53 for fiscal 2019.
In the last reported quarter (second-quarter fiscal 2018), the company’s earnings and sales topped their Zacks Consensus Estimate by 3.2% and 1%, respectively. Gross margin improved as costs of sales fell as a proportion of revenues. The company delivered positive earnings surprises in each of the last four quarters, with average positive earnings surprise of 4.33%. Over a year, the company’s shares have yielded 22.9% return, outperforming the gain of 15.3% recorded by the industry.
For fiscal 2018, Rexnord anticipates core sales growth to be in low-to-mid single digits versus the previous expectation of low single-digit. Adjusted earnings before interest, tax, depreciation and amortization is projected to be $375-$385 million compared with the earlier forecast of $365-$385 million. Moreover, the company’s digital enterprise strategy — DiRXN — will enhance performance of the Process & Motion Control segment. This platform integrates innovative Industrial Internet of Things and e-commerce technologies to enable customers improve productivity. Water Management segment will gain from the World Dryer buyout (completed in October).
Stocks to Consider
Some better-ranked stocks in the machinery space are Kadant Inc. (KAI - Free Report) , Sun Hydraulics Corporation and Altra Industrial Motion Corporation . While Kadant and Sun Hydraulics sport a Zacks Rank #1 (Strong Buy), Altra Industrial Motion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kadant pulled off an average positive earnings surprise of 20.32% over the last four quarters. Also, earnings estimates for 2017 and 2018 were revised upward in the last 60 days.
Sun Hydraulics’ earnings estimates for 2017 and 2018 improved in the last 60 days. Also, it pulled off an average positive earnings surprise of 9.58% in the last four quarters.
Altra Industrial Motion’s financial performance was impressive, with an average positive earnings surprise of 17.30% in the last four quarters. Also, earnings estimates for 2017 and 2018 were revised upward over the last 60 days.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Rexnord (RXN) Prices $500M 4.875% Senior Notes Offering
Machinery company Rexnord Corporation recently priced an offering of $500 million of 4.875% senior notes due Dec 15, 2025. Subject to customary closing conditions, this offering is anticipated to close on Dec 7, 2017.
As noted, the senior notes will be issued by Rexnord’s two subsidiaries — RBS Global, Inc. and Rexnord LLC — and will be guaranteed by the company. Interest rate of 4.875% will be paid semiannually on Jun 15 and Dec 15, starting from Jun 15, 2018.
Rexnord intends to use the net proceeds from the issuance to lower its debt balance. It will primarily resort to refinancing and alterations in terms of some credit agreements.
Exiting second-quarter fiscal 2018 (ended Sep 30, 2017), Rexnord had long-term debt of approximately $1,599.4 million, down 20 basis points sequentially while its net debt leverage ratio for the quarter was 2.9. Also, the company states that it has repaid debts of approximately $8.2 million in the first half of year. Notwithstanding Rexnord’s efforts to reduce its debt, we believe that, if unchecked, huge debt levels will increase its financial burden and prove detrimental to profitability.
With a market capitalization of $2.6 billion, Rexnord presently carries a Zacks Rank #3 (Hold). The stock’s earnings estimates are currently pegged at $1.26 for fiscal 2018 (ending March 2018) and at $1.53 for fiscal 2019.
Rexnord Corporation Price and Consensus
Rexnord Corporation Price and Consensus | Rexnord Corporation Quote
In the last reported quarter (second-quarter fiscal 2018), the company’s earnings and sales topped their Zacks Consensus Estimate by 3.2% and 1%, respectively. Gross margin improved as costs of sales fell as a proportion of revenues. The company delivered positive earnings surprises in each of the last four quarters, with average positive earnings surprise of 4.33%. Over a year, the company’s shares have yielded 22.9% return, outperforming the gain of 15.3% recorded by the industry.
For fiscal 2018, Rexnord anticipates core sales growth to be in low-to-mid single digits versus the previous expectation of low single-digit. Adjusted earnings before interest, tax, depreciation and amortization is projected to be $375-$385 million compared with the earlier forecast of $365-$385 million. Moreover, the company’s digital enterprise strategy — DiRXN — will enhance performance of the Process & Motion Control segment. This platform integrates innovative Industrial Internet of Things and e-commerce technologies to enable customers improve productivity. Water Management segment will gain from the World Dryer buyout (completed in October).
Stocks to Consider
Some better-ranked stocks in the machinery space are Kadant Inc. (KAI - Free Report) , Sun Hydraulics Corporation and Altra Industrial Motion Corporation . While Kadant and Sun Hydraulics sport a Zacks Rank #1 (Strong Buy), Altra Industrial Motion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kadant pulled off an average positive earnings surprise of 20.32% over the last four quarters. Also, earnings estimates for 2017 and 2018 were revised upward in the last 60 days.
Sun Hydraulics’ earnings estimates for 2017 and 2018 improved in the last 60 days. Also, it pulled off an average positive earnings surprise of 9.58% in the last four quarters.
Altra Industrial Motion’s financial performance was impressive, with an average positive earnings surprise of 17.30% in the last four quarters. Also, earnings estimates for 2017 and 2018 were revised upward over the last 60 days.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>