Zacks_Analysts' Blog : Regal Beloit Revises Guidance - Analyst Blog

Regal Beloit Corporation (RBC) recently revised its guidance for the fourth quarter of 2010. Regal now expects earnings per share to come around 63 cents – 67 cents, down from the previous estimate of 69 cents – 75 cents, primarily due to a slower-than-expected sales pace in the heating, ventilation and air conditioning (HVAC) segment and acquisition-related expenses that the company will undertake in the quarter.

Regal also announced that it will acquire Unico, Inc., which manufactures a full range of AC and DC drives, motor controllers, and other accessories ideally suited for most industrial and commercial applications. Headquartered in Franksville, Wisconsin, Unico generated sales of $61.7 million in the fiscal year ended June 30, 2010.

Unico has developed substantial proprietary technology in the fields of oil and gas recovery technology, commercial HVAC technology, test stand automation and other developing applications. Hence, Regal believes that the combined product portfolio will drive development and adoption of new energy efficient and intelligent solutions.

The transaction, expected to close by year end, is expected to become accretive to earnings per share by approximately 7 cents in 2011.

Regal also announced that Mark J. Gliebe, currently president and COO, will assume the role of CEO in May 2011.

Earlier, in November, Regal acquired 55% of Elco Group B.V, which manufactures and sells motors, fans and blowers and has manufacturing facilities in Italy, China and Brazil.

The acquisition is expected to add approximately $10 million to sales in the fourth quarter of 2010. Sales for Elco in 2011 are expected to be approximately $80 million in 2011 and the acquisition will add 8 cents to earnings.

Regal, which competes with Baldor Electric Co. (BEZ) in electrical products, expects that the addition of Elco will strengthen its commercial position in Europe and broaden its product offerings in commercial refrigeration and air moving applications.