Baldor Increases Sales Guidance – Analyst Blog

Manufacturer of energy efficient motors Baldor Electric Co. (BEZ) updated its sales guidance for the second quarter of 2010. The company increased its sales guidance to a range of $435.0 million to $445.0 million from its previous guided range of $415.0 million to $430.0 million, driven primarily by strong incoming orders for all its products.

A higher expectation for sales has also enhanced Baldor’s confidence to achieve slightly better operating margin for the second quarter of 2010 than its quarterly peak operating margin of 14.2%. An improved future outlook represents healthy industrial spending and strengthening global economy, better capacity utilization, customers demand for energy efficient products, reduced costs and huge replacement demand due to the company’s large installed base.

Baldor Electric’s prime source of revenue is sales to original equipment manufacturers (OEMs), to whom approximately 60.0% of industrial motor products and 20.0% of mechanical power transmission products are sold directly. The rest of the products are sold to distributors.

During the first quarter of 2010, Baldor Electric experienced a steady improvement in orders for all of its products, especially small and medium-sized motors. Overall, orders exceeded shipments by $25.0 million in the quarter for a book-to-bill ratio of 1.06. At quarter end, the company had approximately $160.0 million in backlog.

Operating through one segment in the industrial electrical equipment industry, Baldor Electric Co. specializes in designing and manufacturing industrial electrical motors, drives, generators, and other mechanical power transmission products. The company faces competition from AO Smith Corp. (AOS), Regal Beloit Corporation (RBC) and Bodine Electric Company.