NORTH CANTON, Ohio – The Timken Co. has reported fourth-quarter sales of $762.2 million, up approximately 2 percent over the prior-year quarter. The revenue increase was driven by organic growth in Process Industries, partially offset by unfavorable currency and a decrease in Mobile Industries sales due to planned program exits.
For the fourth quarter, the company generated net income from continuing operations of $38.9 million, or 43 cents per diluted share. This compares with $33.7 million or 35 cents per diluted share from a year ago.
Adjusted net income from continuing operations in the fourth quarter was $57.9 million or 65 cents per diluted share (reference table for adjustments). This was up from $45.2 million or 48 cents per diluted share for the same period a year ago. Revenue growth, lower manufacturing costs and a lower tax rate drove the net income improvement, which was partially offset by currency. Earnings per share in the quarter also benefited from fewer shares outstanding versus the prior period.
For 2014, sales were $3.1 billion, up slightly over 2013. Excluding the impact of $110 million of planned program exits in Mobile Industries that concluded in 2013, sales were up approximately 5 percent. Net income from continuing operations was $144.5 million, or $1.58 per diluted share, which compared with $175.2 million or $1.82 per diluted share in 2013.
Adjusted net income from continuing operations improved in 2014 to $232.9 million or $2.55 per diluted share. This compares with $198.6 million or $2.07 per diluted share in the prior year. Revenue growth and cost reductions drove the net income improvement. In addition, earnings per share also benefited from the company’s share repurchase program.
“We are pleased to report solid fourth-quarter results that reflect strong execution in a slow-growth, strong-dollar environment,” said Timken President and CEO Richard Kyle. “For the full year, we were able to grow the top line modestly and convert that revenue growth into a 23 percent increase in adjusted EPS through our continued focus on portfolio improvement and cost reduction, complemented by our share repurchase program.
“Looking ahead to 2015, we are viewing our markets slightly more cautiously than 2014. New business wins combined with modest market growth are expected to result in approximately 4 percent organic growth, but that will largely be offset by the impact of currency,” Kyle added. “As in 2014, we expect to continue to improve our cost structure and mix to deliver solid earnings per share growth on the revenue. We remain focused on creating value for our customers and are well-positioned to respond favorably should the economy grow faster than we are currently projecting.”