RBC Q1 Earnings Beat Estimates on Aerospace and Defense Growth

Revenue Growth Gains Momentum

RBC Bearings generated $34.4 million in quarterly revenues from VACCO, which it acquired in July 2025. Excluding this contribution, the company still benefited from broad expansion across most of its end markets.

Sales originating in the United States totaled $467 million, while international revenues were $52.5 million. Point-in-time revenues represented 95% of the total, with the remaining 5% recognized over time.

RBC Bearings' Segment Sales Rise

Industrial segment revenues increased 8.4% year over year to $294.1 million. The business accounted for 56.6% of total quarterly sales, maintaining its position as the company’s largest revenue contributor.

Aerospace & Defense revenues surged 36.9% to $225.4 million and represented 43.4% of sales. The segment’s sharp growth was the primary operating driver behind the company’s double-digit top-line increase.

RBC Expands Margins on Higher Sales

Gross profit rose 26.9% year over year to $247.8 million. Gross margin expanded 290 basis points to 47.7%, reflecting stronger operating performance and a favorable revenue mix.

Adjusted operating income increased 34.1% to $141.2 million. The adjusted operating margin improved to 27.2% from 24.2% in the prior-year quarter, showing that revenue growth translated into stronger operating leverage.

RBC Bearings' Costs and Profitability Improve

Selling, general and administrative expenses increased 8% to $85.8 million. However, SG&A expenses declined as a percentage of revenues to 16.5% from 16.9%, indicating improved cost absorption.

Adjusted EBITDA advanced 28.1% year over year to $181.2 million. The adjusted EBITDA margin expanded 240 basis points to 34.9%. Net interest expense decreased to $10.1 million from $12.2 million, primarily due to continued debt reduction.

RBC Strengthens Cash Flow and Liquidity

Net cash provided by operating activities increased 43.2% year over year to $171.8 million. Capital expenditures totaled $24.9 million compared with $15.7 million in the prior-year period.

Cash rose to $124.5 million at the end of the quarter from $57.3 million at the end of fiscal 2026. RBC repaid $77 million of term loans during the period, while total debt stood at $806.2 million, including current and long-term obligations.

RBC Bearings' Backlog Supports Visibility

Backlog was $2.3 billion at the end of the quarter, unchanged sequentially but sharply above $1 billion a year earlier. The elevated order level provides meaningful revenue visibility, particularly within the Aerospace & Defense business.

For contracts lasting more than a year, remaining performance obligations totaled approximately $1.29 billion. The company expects to recognize about 42% of that amount over the next 12 months, with the balance recognized thereafter.

RBC Issues Upbeat Second-Quarter Outlook

Management expects second-quarter fiscal 2027 net sales of $505-$515 million. The projection implies growth of 10.9-13.1% from the prior-year quarter’s revenues of $455.3 million.

Gross margin is projected between 45.50% and 45.75%. SG&A expenses are expected to represent 16.50-16.75% of sales. Management expressed confidence in the company’s outlook, citing expanding end markets, record margins, strong cash flow and a robust backlog.

Zacks Rank and Other Stocks to Consider

The company currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks from the same space are discussed below:

Applied Industrial Technologies AIT carries a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Applied Industrial’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 4.0%.  In the past 60 days, the Zacks Consensus Estimate for Applied Industrial’s fiscal 2026 bottom line has inched up 0.1%.

IDEX Corporation IEX presently carries a Zacks Rank of 2. IDEX’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 7.7%. In the past 60 days, the Zacks Consensus Estimate for IEX’s 2026 earnings has increased 1.4%.

The Middleby Corporation MIDD currently carries a Zacks Rank of 2. Middleby’s earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 10.4%. In the past 60 days, the Zacks Consensus Estimate for MIDD’s 2026 earnings has increased 0.3%.

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