Benzinga | Oct 29, 2021 09:29AM EDT

Barnes Q3 Earnings Beat Estimates, Trims FY21 EPS Outlook, Warns On Supply Chain Issues

* Barnes Group Inc. (NYSE:B) reported third-quarter FY21 sales growth of 20.8% year-over-year to $325 million, +20% on an organic basis, beating the consensus of $319.31 million.

* Industrial segment sales increased 17.6% Y/Y to $231.55 million, and operating margin expanded by 60 bps to 13%.

* Aerospace segment sales increased by 29.6% Y/Y to $93.51 million, and the adjusted operating margin expanded by 490 bps to 14.8%.

* Adjusted EPS improved to $0.55 compared to $0.30 in 3Q20, beating the consensus of $0.51.

* The operating income increased 39.9% Y/Y to $43.71 million, and the margin expanded by 180 bps to 13.4%.

* Barnes generated cash from operating activities year-to-date of $127.79 million, compared to $163.83 million a year ago. Free cash flow of $101.06 million.

* Aerospace OEM backlog was at $665 million, down 4% from June 2021. The company expects to convert ~40% of this backlog to revenue over the next 12 months.

* Barnes held cash and equivalents of $93.48 million.

* "Aerospace end markets continue to demonstrate solid recovery with improving flight activity. Industrial end markets, while seeing good customer demand, are experiencing some headwinds as supply chain issues remain a near-term challenge," said CEO Patrick J. Dempsey.

* FY21 Outlook: Barnes continues to expect organic sales to be up 11% - 12%. Operating margin to be ~12.5%, down from the prior outlook of ~13%, as raw material and freight costs are forecasted to impact Industrial business.

* It expects Adjusted EPS of $1.83 - $1.93 (prior $1.83 - $1.98) vs. consensus of $1.90.

* Price Action: B shares closed higher by 0.74% at $41.04 on Thursday.