Timken Reports Second-Quarter Results, Updates Outlook
Resource from: Timken Likes:184
Jul 31,2015
- Adjusted earnings of $0.57 per diluted share (EPS)
- Repurchased 2 million shares during the quarter
- Strong free cash flow in the quarter
- Reducing outlook; expects adjusted EPS in the range of $2.10 to $2.20
NORTH CANTON, Ohio, July 30, 2015 /PRNewswire/ -- The Timken Company (NYSE: TKR; www.timken.com), a global leader in bearings, today reported sales of $728 million for the second quarter of 2015, down 8 percent from a year ago. Excluding currency impact of 5 percent, sales were down approximately 3 percent, primarily due to market-related declines in Mobile Industries that were partially offset by organic growth in Process Industries.
Net income from continuing operations was $36.7 million or $0.43 per diluted share for the quarter, versus $56.5 million or $0.61 per diluted share a year ago. Adjusted net income from continuing operations (reference Table) was $49.1 million or $0.57 per diluted share. This compares with $59.4 million or $0.65 per diluted share for the same period in 2014. The change in adjusted net income reflects the impact of negative currency and unfavorable volume. This was partially offset by lower material and logistics costs; reduced selling, general and administrative (SG&A) expenses; and a more favorable tax rate. Earnings per share benefited from the company's share buyback program, with 2 million shares repurchased in the second quarter.
Free cash flow (net cash from operations minus capital expenditures) for the quarter was $64.7 million, or 132 percent of adjusted net income. The strong performance was driven in part by lower working capital.
"The quarter came in near our expectations with demand up slightly compared with the first quarter," Timken President and CEO Richard G. Kyle reported. "Given the volume levels and the impact of currency, we managed costs and cash flow well in the quarter and continued to return capital to shareholders by raising our quarterly dividend and executing our share buyback plan.
"During the quarter, demand remained weak in many of our markets. As a result, we are reducing our outlook for the balance of the year, now expecting our top line to be slightly off from the first half," Kyle said. "We are working to accelerate the impact of our cost-reduction initiatives, and expect to generate second-half earnings comparable to the first half. We're committed to drive shareholder value and remain focused on executing our strategy and growing our business."
In the quarter, the company:
Launched the Timken® UC-series ball bearing housed unit product line, an extension of the company's housed unit bearing portfolio;
Started shipping products to support new business platforms in Mobile Industries;
Increased the company's quarterly dividend 4 percent to $0.26 per share;
Returned $102.5 million in capital to shareholders through the repurchase of 2 million shares and payment of dividends in the quarter; and
Entered into a new five-year $500 million senior credit facility.
Second-Quarter Segment Results
Mobile Industries reported second-quarter sales of $388.6 million, down approximately 13 percent from the same period a year ago, with about 5 percent attributable to currency. The remainder was largely due to declines in aerospace, agriculture and automotive, partially offset by continued growth in the rail sector.
Earnings before interest and taxes (EBIT) for the second quarter were $36 million or 9.3 percent of sales, compared with prior-year EBIT of $42.3 million or 9.5 percent of sales. Adjusted EBIT was $37 million or 9.5 percent of sales, compared with $46.7 million or 10.4 percent of sales in the second quarter last year. The decline in earnings was driven by lower volume and currency, partially offset by lower manufacturing, material and logistics costs, and SG&A expenses.
Process Industries sales of $339.4 million for the second quarter were down 1 percent from the prior year. Excluding currency impact of about 5 percent, sales were up almost 4 percent, driven by organic growth in the wind energy and military marine sectors, higher industrial services revenue and the benefit of acquisitions. This growth was partially offset by lower industrial distribution demand driven by weakness in metals, mining, and oil and gas.
EBIT for the quarter was $56.7 million or 16.7 percent of sales, compared with prior-year EBIT of $64.8 million or 18.9 percent of sales. Adjusted EBIT was $57.5 million or 16.9 percent of sales, compared with $66.6 million or 19.5 percent of sales in the second quarter last year. The decrease in earnings was driven by unfavorable mix, manufacturing utilization and currency, which more than offset the benefit of higher sales volume and lower logistics costs.
2015 Outlook
For 2015, the company expects year-over-year revenue to be down approximately 7 to 8 percent, which includes 5 percent from currency declines. The segment outlook for full-year 2015 has also been adjusted with:
Mobile Industries' sales expected to be down 8 to 9 percent. Without the impact of currency, sales are expected to be down 3 to 4 percent reflecting lower shipments in aerospace and agriculture, partially offset by organic growth in rail.
Process Industries' sales expected to be down 6 to 7 percent. Excluding currency, sales are expected to be down 1 to 2 percent, as growth in wind energy and military marine, and the benefit of acquisitions are more than offset by weaker demand in industrial aftermarket and heavy industries.
Timken expects 2015 earnings per diluted share to range from $0.30 to $0.40, which includes $1.80 of non-cash pension settlement charges and $0.20 per share of impairment and other restructuring charges, partially offset by $0.20 of income associated with discrete tax accrual adjustments.
Excluding these items, the company expects 2015 adjusted earnings per diluted share to range from $2.10 to $2.20.
Conference Call Information
Timken will host a conference call today at 11:00 a.m. Eastern Time to review its financial results. Presentation materials will be available online in advance of the call for interested investors and securities analysts.
Conference Call:
Thursday, July 30, 2015
11:00 a.m. Eastern Time
Live Dial-In: 800-289-0498 or 913-312-0839
(Call in 10 minutes prior to be included.)
Conference ID: Timken Earnings Call
Live Webcast: www.timken.com/investors
Conference Call Replay:
Replay Dial-In available through August 13, 2015:
888-203-1112 or 719-457-0820
Replay Passcode: 2686912
About The Timken Company
The Timken Company (NYSE: TKR; www.timken.com) engineers, manufactures and markets bearings, transmissions, gearboxes, chain and related products, and offers a spectrum of powertrain rebuild and repair services. The leading authority on tapered roller bearings, Timken today applies its deep knowledge of metallurgy, tribology and mechanical power transmission across a variety of bearings and related systems to improve reliability and efficiency of machinery and equipment all around the world. The company's growing product and services portfolio features many strong industrial brands including Timken®, Fafnir®, Philadelphia Gear®, Drives® and Interlube™. Known for its quality products and collaborative technical sales model, Timken posted $3.1 billion in sales in 2014. With 14,000 employees operating from 28 countries, Timken makes the world more productive and keeps industry in motion.
Certain statements in this release (including statements regarding the company's forecasts, estimates and expectations) that are not historical in nature are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, the statements related to expectations regarding the company's future financial performance, including information under the heading "Outlook," are forward-looking. The company cautions that actual results may differ materially from those projected or implied in forward-looking statements due to a variety of important factors, including: the finalization of the company's financial statements for the second quarter of 2015; the company's ability to respond to the changes in its end markets that could affect demand for the company's products; unanticipated changes in business relationships with customers or their purchases from the company; changes in the financial health of the company's customers, which may have an impact on the company's revenues, earnings and impairment charges; fluctuations in raw material and energy costs; the impact of the company's last-in, first-out accounting; weakness in global or regional economic conditions and financial markets; fluctuations in currency valuations; changes in the expected costs associated with product warranty claims; the ability to achieve satisfactory operating results in the integration of acquired companies; the impact on operations of general economic conditions; fluctuations in customer demand; the impact on the company's pension obligations due to changes in interest rates, investment performance and other tactics designed to reduce risk; and the company's ability to complete and achieve the benefits of announced plans, programs, initiatives, and capital investments. Additional factors are discussed in the company's filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K for the year ended Dec. 31, 2014, quarterly reports on Form 10-Q and current reports on Form 8-K. Except as required by the federal securities laws, the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
In the quarter, the company:
Launched the Timken® UC-series ball bearing housed unit product line, an extension of the company's housed unit bearing portfolio;
Started shipping products to support new business platforms in Mobile Industries;
Increased the company's quarterly dividend 4 percent to $0.26 per share;
Returned $102.5 million in capital to shareholders through the repurchase of 2 million shares and payment of dividends in the quarter; and
Entered into a new five-year $500 million senior credit facility.
Second-Quarter Segment Results
Mobile Industries reported second-quarter sales of $388.6 million, down approximately 13 percent from the same period a year ago, with about 5 percent attributable to currency. The remainder was largely due to declines in aerospace, agriculture and automotive, partially offset by continued growth in the rail sector.
Earnings before interest and taxes (EBIT) for the second quarter were $36 million or 9.3 percent of sales, compared with prior-year EBIT of $42.3 million or 9.5 percent of sales. Adjusted EBIT was $37 million or 9.5 percent of sales, compared with $46.7 million or 10.4 percent of sales in the second quarter last year. The decline in earnings was driven by lower volume and currency, partially offset by lower manufacturing, material and logistics costs, and SG&A expenses.
Process Industries sales of $339.4 million for the second quarter were down 1 percent from the prior year. Excluding currency impact of about 5 percent, sales were up almost 4 percent, driven by organic growth in the wind energy and military marine sectors, higher industrial services revenue and the benefit of acquisitions. This growth was partially offset by lower industrial distribution demand driven by weakness in metals, mining, and oil and gas.
EBIT for the quarter was $56.7 million or 16.7 percent of sales, compared with prior-year EBIT of $64.8 million or 18.9 percent of sales. Adjusted EBIT was $57.5 million or 16.9 percent of sales, compared with $66.6 million or 19.5 percent of sales in the second quarter last year. The decrease in earnings was driven by unfavorable mix, manufacturing utilization and currency, which more than offset the benefit of higher sales volume and lower logistics costs.
2015 Outlook
For 2015, the company expects year-over-year revenue to be down approximately 7 to 8 percent, which includes 5 percent from currency declines. The segment outlook for full-year 2015 has also been adjusted with:
Mobile Industries' sales expected to be down 8 to 9 percent. Without the impact of currency, sales are expected to be down 3 to 4 percent reflecting lower shipments in aerospace and agriculture, partially offset by organic growth in rail.
Process Industries' sales expected to be down 6 to 7 percent. Excluding currency, sales are expected to be down 1 to 2 percent, as growth in wind energy and military marine, and the benefit of acquisitions are more than offset by weaker demand in industrial aftermarket and heavy industries.
Timken expects 2015 earnings per diluted share to range from $0.30 to $0.40, which includes $1.80 of non-cash pension settlement charges and $0.20 per share of impairment and other restructuring charges, partially offset by $0.20 of income associated with discrete tax accrual adjustments.
Excluding these items, the company expects 2015 adjusted earnings per diluted share to range from $2.10 to $2.20.
Conference Call Information
Timken will host a conference call today at 11:00 a.m. Eastern Time to review its financial results. Presentation materials will be available online in advance of the call for interested investors and securities analysts.
Conference Call:
Thursday, July 30, 2015
11:00 a.m. Eastern Time
Live Dial-In: 800-289-0498 or 913-312-0839
(Call in 10 minutes prior to be included.)
Conference ID: Timken Earnings Call
Live Webcast: www.timken.com/investors
Conference Call Replay:
Replay Dial-In available through August 13, 2015:
888-203-1112 or 719-457-0820
Replay Passcode: 2686912
About The Timken Company
The Timken Company (NYSE: TKR; www.timken.com) engineers, manufactures and markets bearings, transmissions, gearboxes, chain and related products, and offers a spectrum of powertrain rebuild and repair services. The leading authority on tapered roller bearings, Timken today applies its deep knowledge of metallurgy, tribology and mechanical power transmission across a variety of bearings and related systems to improve reliability and efficiency of machinery and equipment all around the world. The company's growing product and services portfolio features many strong industrial brands including Timken®, Fafnir®, Philadelphia Gear®, Drives® and Interlube™. Known for its quality products and collaborative technical sales model, Timken posted $3.1 billion in sales in 2014. With 14,000 employees operating from 28 countries, Timken makes the world more productive and keeps industry in motion.
Certain statements in this release (including statements regarding the company's forecasts, estimates and expectations) that are not historical in nature are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, the statements related to expectations regarding the company's future financial performance, including information under the heading "Outlook," are forward-looking. The company cautions that actual results may differ materially from those projected or implied in forward-looking statements due to a variety of important factors, including: the finalization of the company's financial statements for the second quarter of 2015; the company's ability to respond to the changes in its end markets that could affect demand for the company's products; unanticipated changes in business relationships with customers or their purchases from the company; changes in the financial health of the company's customers, which may have an impact on the company's revenues, earnings and impairment charges; fluctuations in raw material and energy costs; the impact of the company's last-in, first-out accounting; weakness in global or regional economic conditions and financial markets; fluctuations in currency valuations; changes in the expected costs associated with product warranty claims; the ability to achieve satisfactory operating results in the integration of acquired companies; the impact on operations of general economic conditions; fluctuations in customer demand; the impact on the company's pension obligations due to changes in interest rates, investment performance and other tactics designed to reduce risk; and the company's ability to complete and achieve the benefits of announced plans, programs, initiatives, and capital investments. Additional factors are discussed in the company's filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K for the year ended Dec. 31, 2014, quarterly reports on Form 10-Q and current reports on Form 8-K. Except as required by the federal securities laws, the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
(Timken)
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1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
2.All news edited and translated by us are specially noted the source"CBCC".
3.For investors,please be cautious for all news.We don't bear any damage brought by late and inaccurate news.
4.If the news we published involves copyright of yours,just let us know.
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