RBC Bearings delivered fourth quarter results that aligned with market expectations for revenue and exceeded non-GAAP profit forecasts, reflecting robust momentum in its aerospace and defense (A&D) business. Management highlighted strong demand from submarine, missile, and aircraft programs as a central driver, with CEO Michael Hartnett pointing to a "national inflection point" in both commercial and defense sectors. The industrial segment also contributed to growth, supported by improved product availability and short-cycle manufacturing trends. Margin performance was stable, aided by pricing and operational efficiencies, particularly within A&D.
Is now the time to buy RBC? Find out in our full research report (it’s free for active Edge members).
RBC Bearings (RBC) Q4 CY2025 Highlights:
- Revenue: $461.6 million vs analyst estimates of $460.3 million (17% year-on-year growth, in line)
- Adjusted EPS: $3.04 vs analyst estimates of $2.86 (6.2% beat)
- Adjusted EBITDA: $140.3 million vs analyst estimates of $143.6 million (30.4% margin, 2.3% miss)
- Revenue Guidance for Q1 CY2026 is $500 million at the midpoint, below analyst estimates of $508 million
- Operating Margin: 22.3%, in line with the same quarter last year
- Market Capitalization: $17.41 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From RBC Bearings’s Q4 Earnings Call
- Kristine Liwag (Morgan Stanley) asked about embedded industrial growth in next quarter's guidance and prospects for higher industrial growth next year. CEO Michael Hartnett and CFO Rob Sullivan confirmed their outlook was "slightly conservative" for the near term but more optimistic for next year, citing improved PMI trends.
- Alexandra Mandry (Truist Securities) queried the composition of backlog and its relationship to future revenue. Hartnett clarified that over 90% of backlog is A&D-related, with multi-year contracts, while Sullivan acknowledged some lumpiness due to contract timing.
- Steve Barger (KeyBanc Capital Markets) questioned the drivers of industrial outperformance and whether it could continue. Hartnett highlighted the Dodge brand's product availability and short-cycle nature, expressing confidence in ongoing growth, especially with a rebound in the semiconductor sector.
- Scott Deuschle (Deutsche Bank) probed the impact of new Airbus contracts and missile business growth. Hartnett confirmed a 20% increase in Airbus content, expecting it to benefit revenue this quarter, and sees missile revenue growing but not overtaking commercial aerospace.
- Ross Sparenblek (William Blair) asked about margin progress at VACCO and the sustainability of A&D margin gains. Hartnett expects A&D margins to continue converging with industrial levels, driven by volume and pricing improvements.
Catalysts in Upcoming Quarters
In the next few quarters, the StockStory team will be watching (1) the pace at which strong A&D backlog converts into revenue, (2) signs of sustained recovery in industrial end markets such as semiconductors and OEM manufacturing, and (3) the impact of new product introductions and service center expansions on industrial sales. Execution on VACCO integration and the realization of margin improvement initiatives will also be key to tracking operational progress.
RBC Bearings currently trades at $550.62, up from $516.78 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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