Earnings Roundup: Snap-on, SKF, Regal Rexnord, ITW and AMETEK - Modern Distribution Management

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Earnings Roundup: Snap-on, SKF, Regal Rexnord, ITW and AMETEK

MDM looks at another round of earnings reports from industrial suppliers.
Up and down turn arrow on wooden blocks difference direction to earn or to loss

Industrial distributors and manufacturers once again are releasing their latest quarterly earnings reports. For this roundup, we’re looking at the latest sales and revenue numbers from five industrial suppliers: Kenosha, Wisconsin-based Snap-on; Swedish bearings manufacturer SKF; Beloit, Wisconsin-based electric motors manufacturer Regal Rexnord; industrial equipment producer Illinois Tool Works; and Berwyn, Pennsylvania-based electronic instruments and electromechanical devices manufacturer AMETEK.

Snap-On 4Q Sales Up 4.3%, Full-Year Sales Rise 5.7%

Snap-on reported on Feb. 2 that 4Q 2022 sales reached $1.15 billion, a 4.3% increase year-over-year. The increase reflected organic growth of 8%, which was partially offset by $37.7 million of unfavorable foreign currency translation, according to a news release. As a percentage of net sales, operating earnings before financial services of 21.5% in 4Q improved 50 basis points year-over-year. The 4.3% sales increase was down slightly from 3Q’s year-over-year increase of 6.2%.

Full-year net sales were $4.5 billion, a 5.7% increase from 2021, reflecting 8.7% organic sales growth and $8.5 million of acquisition-related sales, partially offset by $124.9 million of unfavorable foreign currency translation. Full-year net earnings of $911.7 million increased 11.1% from 2021.

“Our fourth quarter performance was encouraging as it reflects our ongoing momentum and further confirms the extraordinary resilience of our markets, even in particularly uncertain environments,” Snap-on Chairman and CEO Nick Pinchuk said in the release. “We’ve navigated the turbulence of these times with significant consistency, driven by our advantages in product and brand, and guided by the considerable capabilities of our experienced team.”

SKF Sales Reach $2.5B in 4Q

On Feb. 2, SKF reported 4Q net sales of SEK 25.4 billion ($2.5 billion USD), representing organic sales of 10% year-over-year. SKF posted adjusted operating profit of SEK 2.5 billion ($241 million USD) in 4Q, a 12.5% year-over-year increase.

For the full year, SKF had net sales of SEK 96.9 billion ($9.3 billion USD), an 18.6% increase from 2021. Adjusted operating profit of SEK 10.2 billion ($984 million USD) decreased 5.6% compared to 2021.

“2022 was a year in which we accelerated our strategic development in earnest,” SKF President and CEO Rickard Gustafson said in a news release. “We’ve capitalized on opportunities in our target growth areas delivering double-digit growth in several strategically important segments. At the same time, we are taking a more active approach to portfolio management, working across customer industries and product lines to improve our operational performance.

“Throughout the year, we have been operating against a back-drop of challenging external circumstances, including the war in Ukraine and exceptional cost inflation levels, which accelerated throughout the year, peaking during Q3. We have worked hard to compensate for this continually moving target, with the gap closing towards the end of the year.”

SKF also announced Feb. 2 its investment in a new greenfield factory in Monterrey, Mexico.

Regal Rexnord Fiscal 2Q Sales Growth Slows to 2%

After reporting in October that 3Q 2022 sales increased 48% over the prior-year quarter, Regal Rexnord on Feb. 2 said 4Q 2022 sales grew by just 2% over the same period in 2021. Sales for 2022 were up 4% on an organic basis, while the company highlighted is $5 billion acquisition of Altra Industrial Motion Corp. The company also reported that, after 4Q, its backlog remains elevated, up 45% compared with the beginning of 2021.

For the company’s Motion Control Solutions segment, 4Q net sales were $596.1 million, an increase of 9% over the prior year. For the Climate Solutions segment, 4Q net sales were $235.2 million, a decrease of 11.5%, the company said. For 2022 overall, Regal Rexnord said total sales were up 37% versus the prior year and up 9% on an organic basis.

“I am pleased with our 4Q performance, which reflected our Regal Rexnord team executing at a high level to deliver a strong finish to 2022,” CEO Louis Pinkham said. “While some end markets continued to slow, our various outgrowth efforts and consistent price discipline helped us deliver 4% organic sales growth in the quarter. I am also proud of our team’s disciplined efforts to continue raising our adjusted EBITDA margin, which was up over 300 basis points in the quarter, aided by 80/20, lean, new product, and our acquisition synergies.”

ITW 4Q Sales Up 8%, Annual Sales Increase 10%

On Feb. 2, Illinois Tool Works reported 4Q 2022 revenue of $4 billion, an increase of 8% over the same quarter the year before. The growth was down slightly from 3Q 2022, when ITW reported sales growth of 14% over 3Q 2021.

For 4Q, ITW reported record operating income of $986 million, an increase of 18%. Operating margin for 4Q was 24.8%, the company said. For all of 2022, ITW reported revenue of $15.9 billion, an increase of 10% with organic growth of 12%. For the total year, ITW also reported record operating income of $3.8 billion, an increase of 9%.

“We delivered a robust finish to a strong year of differentiated execution and performance by the ITW team,” said E. Scott Santi, Chairman and CEO. “Fourth quarter organic growth was 12 percent, operating margin was 24.8 percent, and earnings per share increased 21 percent excluding divestiture gains. We were very pleased with both our revenue growth and margin performance in the fourth quarter as we delivered eight percent overall revenue growth and a 210-basis point operating margin improvement.”

AMETEK’s 4Q Sales Hold at 8% Growth

AMETEK said its 4Q 2022 sales were a record $1.63 billion, an 8% increase over the fourth quarter of 2021. The 8% figured matched the year-to-year sales growth reported in 3Q 2022. Operating income in 4Q increased 10% to a record $398 million, and operating margins were 24.5%, AMETEK said.

For the full 2022 year, AMETEK said sales were $6.15 billion, an increase of 11% over 2021, while organic sales were also up 11% in 2022. Operating income was $1.5 billion, up 15% versus the prior year, and operating income margins were 24.4%, the company said.

“AMETEK completed a record year with an outstanding fourth quarter,” said David A. Zapico, AMETEK Chairman and CEO. “Our results in the quarter were ahead of expectations driven by continued broad-based sales growth and exceptional operating performance. AMETEK’s operating flexibility allowed us to deliver excellent margin expansion, strong cash flows and outstanding earnings growth in the quarter. Additionally, we ended the year with a record backlog of $3.2 billion, positioning us well as we look ahead to 2023.”

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