Barnes Group (B) Takes Flight on Strong Aerospace Demand, Acquisition News Sends Shares Higher
Barnes Group, Inc. (B) is riding high on the wings of strong demand in its Aerospace segment, reporting a 7% year-over-year increase in third-quarter FY24 sales to $388 million, surpassing analyst expectations of $380.3 million. This impressive performance was driven by a remarkable 49% surge in Aerospace sales, reaching $232 million. Within the Aerospace segment, original equipment manufacturing (OEM) sales rose by 38%, while aftermarket sales soared by 67%. This strong growth is reflected in the company’s robust Aerospace OEM backlog, which ended the quarter at $1.80 billion, a 19% sequential increase.
The company’s Industrial segment, however, saw a 24% decline in sales to $156 million due to the sale of the Associated Spring and Hänggi businesses. Despite this, Barnes Group’s overall financial performance remained strong, with total adjusted operating income climbing 23% to $47.9 million, and adjusted EBITDA increasing 16% to $76.9 million.
Despite the positive financial results, Barnes Group’s stock price closed slightly higher by 0.06% at $46.70 on Thursday, likely influenced by the company’s announcement of a pending acquisition by Apollo Global Management, Inc. (APO). The deal, valued at approximately $3.6 billion, will see Barnes Group shareholders receive $47.50 per share in cash, representing a premium of about 22% over the undisturbed closing share price on June 25, 2024.
The acquisition announcement has led Barnes Group to suspend its full-year 2024 financial guidance and cancel its conference call and webcast for the quarter. The company’s focus will now shift towards the integration process with Apollo Global Management.
Thomas J. Hook, President and Chief Executive Officer of Barnes Group, expressed optimism about the company’s future, stating, “In the third quarter, despite ongoing production delays from aircraft manufacturers, our Aerospace OEM business generated extraordinarily strong orders in anticipation of a future industry re-ramp. Meanwhile, our Aerospace aftermarket business continues to deliver robust performance on strong top-line growth.” He further added, “With the MB Aerospace integration and synergies progressing ahead of plan, we are delivering on our strategy to scale Aerospace and transform Barnes.”