Barnes Q4 Profit Plunges

Looking ahead to fiscal year 2012, Barnes Group forecast earnings for fiscal year 2012 above analysts' estimates.

According to, logistics and manufacturing services provider Barnes Group Inc. on Friday reported a profit for the fourth quarter that plunged from last year. The results reflect a loss on sale of the company's Barnes Distribution Europe or BDE business that offset higher revenues at both its segments. Looking ahead to fiscal year 2012, Barnes Group forecast earnings for fiscal year 2012 above analysts' estimates.

Barnes seemingly strategically released this market information, coming on the heels of the announcement of a new Senior VP and COO, PAtrick Demspey, and the realignment of its strategic units into three divisions - Aerospace, Industrial, and Distribution - actions that now seem reactionary in the aftermath of the sale of Barnes Distribution Eurpoe (BDE) for $33 million.

Barnes Group Inc. released on their website their fourth quarter numbers: for the full year 2011, Barnes Group generated sales of $1,169 million, up 13.7%. Income from continuing operations was $91.6 million, or $1.64 per diluted share, compared to $54.0 million, or $0.96 per diluted share in 2010.

“Barnes Group’s fourth quarter results cap a strong year of performance for our Company,” said Gregory F. Milzcik, Barnes Group Inc. President and Chief Executive Officer. “We generated solid organic growth with meaningful margin flow-through leading to an expansion in operating margins to 10.9%, up 250 basis points for the year. Coupled with our continuing focus on profitable growth and improved productivity, we delivered a 70% increase in income from continuing operations for 2011. In addition, we exit 2011 having achieved strong fourth quarter earnings per share from continuing operations, and a healthy backlog of $582 million, up 21% from 2010.”

Logistics and Manufacturing Services

  • Fourth quarter 2011 sales were $122.0 million, up 10% from $110.7 million in the same period last year. The increase in sales was driven by strong organic sales growth in our aerospace aftermarket business. Foreign exchange had a minimal impact on fourth quarter 2011 sales.
  • Operating profit of $15.7 million for the fourth quarter of 2011 was up 65% compared to prior year period of $9.5 million. Operating profit benefited from the impact of higher sales and additional productivity improvements, partially offset by higher management fees related to our aerospace aftermarket Revenue Sharing Programs (RSPs) and increased employee related costs.
  • Full year 2011 sales were $492.9 million, up 11% from $443.9 million in 2010. The increase was primarily due to strong organic sales growth in our aerospace aftermarket and North American Distribution businesses. Foreign exchange positively impacted sales by $3.2 million in 2011.
  • Full year 2011 operating profit increased 65% to $64.8 million from 2010 primarily due to the profit impact of higher sales volumes. Also contributing to the increase in operating profit were productivity improvements, including the favorable impact of a lower cost structure in the North American Distribution business. Segment operating profit increases were partially offset by higher employee related costs and management fees related to RSPs.

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