The Timken Co. has 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, which the company said was primarily due to market-related declines in the Mobile Industries segment that were partially offset by organic growth in the Process Industries segment.
Net income from continuing operations was $36.7 million or 43 cents per diluted share for the quarter, versus $56.5 million or 61 cents per diluted share a year ago. Adjusted net income from continuing operations was $49.1 million or 57 cents per diluted share. This compares with $59.4 million or 65 cents per diluted share for the same period in 2014. Timken said 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.
“The quarter came in near our expectations with demand up slightly compared with the first quarter,” said Timken President and CEO Richard Kyle. “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.”
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.
Timken expects 2015 earnings per diluted share to range from 30 cents to 40 cents, which includes $1.80 of non-cash pension settlement charges and 20 cents per share of impairment and other restructuring charges, partially offset by 20 cents 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.
