stockrowWhat it does
RBC Bearings makes precision bearings, gearing, components and essential systems for industrial and aerospace and defense customers. Its products help moving machinery carry loads, transmit power, reduce friction and control pressure and flow. They are used in equipment ranging from conveyors and mining machinery to aircraft, submarines and guided weapons.
A bearing supports or guides a moving part. RBC makes several types, including plain, roller, ball and mounted bearings. It also makes enclosed gearing, motion-control components, hydraulics, valves and other engineered parts. Some are standard products; others are designed for a particular customer or application.
RBC supplies both original equipment manufacturers, or OEMs, and the aftermarket for replacement parts. Its engineers work with customers during equipment development, designing and testing components against requirements such as load, heat, vibration and corrosion resistance. Depending on the market and application, the process from concept to sale normally takes between three and six years.
The company operates through Industrial and Aerospace & Defense segments. It has 65 facilities in 11 countries, including 44 manufacturing facilities, and employs 5,816 people worldwide. Michael J. Hartnett is chairman, president and chief executive officer.
How it makes money
RBC earns revenue principally by selling bearings, gearing and engineered components. For fiscal 2026, Industrial revenue was $1.1 billion and Aerospace & Defense revenue was $788.0 million; in the second quarter of fiscal 2027, total net sales were $525 million.
Industrial products go into machinery and systems used in manufacturing, construction, mining, food processing, warehousing, power generation and other activities. The range includes mounted bearings, enclosed gearing and power-transmission components. Aerospace & Defense products include bearings for aircraft controls and engines, as well as hydraulics, valves and components for military and space applications.
Approximately 95% of revenue in each of fiscal 2026 and fiscal 2025 came from product sales. The remaining 5% came from services, including repair and refurbishment of customer-owned assets and design and testing work.
Sales reach customers through RBC’s direct sales force and distributors. Distributors primarily serve smaller equipment manufacturers, aftermarket customers and end users that need local inventory and service. Replacement demand comes from the use of existing machinery and deployed equipment; some products designed and certified for an aircraft also remain in use over that aircraft’s life.
RBC uses multiyear agreements with some customers to establish commercial terms, including pricing and termination rights. It also sells under single-source relationships and long-term purchase orders. The company says it prices products to market levels where competitive pressures require it, and attempts to pass through raw-material cost increases when possible. Customers can cancel, delay or modify backlog orders under the applicable terms of sale.
| Product or service | Revenue, FY2026 | Share | Change on the year |
|---|---|---|---|
| Industrial | $1.1 billion | 57.9% | 3.78% |
| Aerospace & Defense | $788.0 million | 42.1% | 32.9% |
Customers and how it sells
RBC groups customers into Industrial and Aerospace & Defense markets. Large industrial customers include Caterpillar, Komatsu and Halliburton, alongside aftermarket distributors such as Motion Industries and Applied Industrial. Industrial applications span equipment used in construction, food and beverage, mining, logistics, semiconductors and other markets.
Aerospace and defense customers include the U.S. Department of Defense, Boeing, Airbus, Lockheed Martin and Northrop Grumman. RBC supplies equipment makers as well as distributors serving replacement demand. Commercial aerospace products are used in aircraft and engines, while defense products go into aircraft, naval vessels, vehicles and guided weapons.
In fiscal 2026, the United States accounted for 89.2% of revenue and international markets for 10.8%. RBC’s direct sales force serves North America, Europe, Asia, Australia and Latin America. Its distributor network supplies smaller equipment makers, aftermarket customers and end users needing local stock and service.
The company also holds inventory at warehouses in the United States and several international locations. In fiscal 2026, approximately 1% of net sales were made directly to the U.S. government, and RBC estimates that approximately an additional 7% were made indirectly.
| Region | Revenue, FY2026 | Share | Change on the year |
|---|---|---|---|
| United States | $1.7 billion | 89.2% | 15.1% |
| International | $202.8 million | 10.8% | 8.68% |
Suppliers and costs
RBC’s principal raw materials are steel and cast iron. It obtains raw materials, component parts and supplies from a variety of sources and generally uses more than one supplier. Suppliers are based in the United States, Europe and Asia. Steel is purchased at market prices, and RBC pays import tariffs on raw materials sourced outside the United States.
Cost of sales includes employee compensation and benefits, raw materials, outside processing, depreciation of manufacturing machinery and equipment, supplies and manufacturing overhead. Raw materials, purchased components and outside processing account for less than half of factory costs, depending on product mix.
RBC produces custom and standard products at its manufacturing facilities. Its inventory program categorizes products by factors such as order frequency, customer count and sales volume, with the aim of keeping standard items available while managing costs. Plants normally run a full first shift, with additional shifts at selected locations.
When material prices rise, RBC attempts to adjust purchasing, expand its vendor network and pass through price increases where possible. It also uses manufacturing process improvements and production scheduling to address costs.
- Revenue$1.9B
- Cost of revenue−$1.0B
- Selling, general and administrative−$316.1M
- Other operating costs−$93.1M
- Operating income$421.0M
Competitive position
RBC competes in a fragmented market for bearings, gearing and engineered components. Its principal competitors include SKF, New Hampshire Ball Bearings, Regal Rexnord, NORD and Timken. The company competes with different suppliers across its product lines, and identifies product qualifications, breadth, service, quality and price as principal competitive factors. Some competitors may have greater financial, marketing, personnel or other resources.
Many aerospace and defense products require approval from an equipment maker, the Department of Defense or the Federal Aviation Administration. RBC says it is the only approved supplier for some components, and that products designed and certified during aircraft development often make it a primary supplier for the aircraft’s life. Military product approval can take from six months to six years.
Our reading: Product qualification is a meaningful competitive protection in applications where RBC is the only approved supplier, although that position does not extend to every product or market.
RBC’s engineers work with customers on designs, while its portfolio lets customers source multiple bearings and components from one manufacturer. It also stocks popular items for immediate sale and uses distributors to reach customers needing local service.
Our reading: Engineering relationships and product availability can support customer retention, but competitors also contend on service, quality and price. RBC has patents and trademarks, though it does not consider any individual item of intellectual property material to the business.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| SKF | Bearings, gearing and engineered components | Medium |
| New Hampshire Ball Bearings | Bearings, gearing and engineered components | Medium |
| Regal Rexnord | Bearings, gearing and engineered components | Medium |
| NORD | Bearings, gearing and engineered components | Medium |
| Timken | Bearings, gearing and engineered components | Medium |
Growth opportunities
RBC seeks to grow through new products, aftermarket sales, geographic expansion and acquisitions of businesses with complementary products or distribution channels. In industrial markets, it sees opportunities from new products, expansion of aftermarket sales and manufacturing improvements. In aerospace and defense, it expects growth from new aircraft introductions, new products, share gains, international expansion and maintenance of existing aircraft.
Fiscal 2026 Aerospace & Defense revenue grew 32.9%, while Industrial revenue grew 3.78%. The acquisition of VACCO contributed to aerospace and defense growth; excluding VACCO, segment sales increased 19.1% in fiscal 2026. RBC’s backlog was $2.3 billion as of March 28, 2026, compared with $0.9 billion a year earlier. Backlog orders can be cancelled, delayed or modified.
In the second quarter of fiscal 2027, net sales increased 15.2% year over year to $525 million. Industrial sales increased 14.8%, and Aerospace & Defense sales increased 15.8%. RBC said production capacity constrained commercial aerospace and defense growth, although new equipment was easing that constraint.
RBC is expanding production of submarine components and plans further expansion. It is also laying out floor space to increase production of fuel-system components for the Tomahawk missile. The company expects third-quarter fiscal 2027 revenue of $525 million to $530 million.
- $942.9MFY2022
- $1.5BFY2023
- $1.6BFY2024
- $1.6BFY2025
- $1.9BFY2026
Structural risks
- Customer markets and spending: RBC’s markets are cyclical, and weakness in customer industries can affect demand. Reductions in U.S. government spending or changes to military procurement programs are also risks.
- Production and supply chain: RBC is behind its marine production plan following supply-chain difficulties and has brought some complex processes in-house. It says capacity has constrained commercial aerospace and defense growth, although new equipment is easing the constraint.
- Materials and tariffs: Steel and energy costs, raw-material availability, import tariffs and RBC’s ability to pass through cost increases on time can affect results. Changes to trade agreements or tariffs on exported goods are additional risks.
- Approvals and customers: RBC must obtain and retain product approvals. It also faces risks from losing significant customers or adverse conditions affecting their businesses; many shipments depend on customer releases for quality and logistics certifications.
- Backlog and debt: Customers can cancel, delay or modify backlog orders. Debt incurred to finance the Dodge acquisition requires interest and principal payments, reducing funds available for acquisitions, working capital, capital expenditures and other purposes.
Bottom line
Our reading
Our reading: RBC combines sales of specialized components designed into equipment with replacement-part demand from industrial, aerospace and defense customers. Product approvals and long design cycles can support its position in particular applications, while its broad industrial range reaches customers through distributors. Its exposure includes cyclical customer markets, material costs and the challenge of expanding production to meet orders.