Barnes Q2: Topline Miss, Maintained 2023 EPS Forecast & More

Barnes Group Inc B reported second-quarter FY23 sales growth of 5.5% year-over-year at $338.98 million, +5% on an organic basis, missing the consensus of $339.166 million.

Adjusted EPS of $0.58 (+4% Y/Y) beat the consensus of $0.54.

Operating income was $26.01 million, compared to a loss of $(28.18) million a year ago, and the margin was 7.7%.

Adjusted operating margin expanded by 30 bps to 12.8%, with income of $43.5 million (+8% Y/Y).

Barnes' operating cash flow for six months ended June 30, 2023, totaled $42.5 million, compared to $8.52 million a year ago. Free cash flow was $20.85 million.

Industrial segment sales increased by 2% Y/Y to $217 million, and Aerospace segment sales increased by 12% Y/Y to $122 million.

Aerospace OEM backlog was at $805 million, up 7% Y/Y. The company expects to convert ~50% of this backlog to revenue over the next 12 months.

At the end of the quarter, the company's liquidity comprised $75 million in cash and $537 million available under the revolving credit facility.

FY23 Outlook: Barnes boosts organic sales growth forecast to 7%-9% (prior view 6%-8%). The company continues to see adjusted operating margin of 12.5%-13.5%.

B continues to expect adjusted EPS of $2.15-$2.30 versus the consensus of $2.25.

Price Action: B shares traded lower by 5.67% at $40.01 on the last check Friday.