CANTON, Ohio -- The Timken Co. has reported sales of $1.3 billion in the first quarter of 2011, an increase of 37 percent over the same period a year ago. The company said this sales increase reflects stronger global demand across most of the company's end-markets as well as higher material surcharges and pricing.

The company generated record first-quarter income from continuing operations of $112.7 million, or $1.13 per diluted share, net of non-controlling interest, compared with $28.3 million, or 29 cents per share a year ago.

The improvement in first-quarter earnings reflects increased demand and favorable mix, as well as surcharges and pricing. Together, they more than offset year-over-year increases in material costs and selling and administrative expenses, the company says.

"Timken's first-quarter results set the company on pace to achieve record earnings this year, and demonstrate that our strategic work over the past few years to transform the company is serving us well," said James Griffith, Timken president and CEO. "We are driving productivity, capacity improvements and new product introductions to serve growing demand from our customers around the world."

At quarter-end, total debt was $522.4 million, or 20.2 percent of capital. As of March 31, the company had cash of $637.6 million, or $115.2 million in excess of total debt, compared with a net cash position of $363.4 million as of Dec. 31, 2010.

The change reflects higher working capital requirements of approximately $175 million to support increased demand, as well as discretionary pension contributions of $150 million, which were partially offset by strong earnings.

Among recent developments, the company:
• Announced a $35 million investment to install an in-line forge press at the Faircrest Steel Plant in Canton, Ohio;
• Accelerated capacity expansions in Asia, including its Chennai, India, plant and its plants in Wuxi and Xiangtan, China; and
• Announced planned productivity improvements across its steel plants to achieve a 120,000-ton capacity increase.

Timken is increasing its 2011 full-year sales outlook to be up approximately 20 to 25 percent over 2010, driven primarily by stronger demand in the Steel, Process Industries and Mobile Industries segments.

The company is raising its 2011 full-year earnings estimate to a range of $3.80 to $4.10 per diluted share from its prior estimate of $3.30 to $3.60 per share. The increase reflects the company's strong first-quarter results and improved outlook for the balance of the year.

The company expects cash from operating activities to be approximately $390 million, after $150 million of discretionary pension contributions made in the first quarter. Free cash flow is expected to be approximately $100 million after capital expenditures of around $220 million and dividends of approximately $70 million.