The Timken Co. has reported second quarter 2016 sales of $674 million, 7.5 percent lower than the same period a year ago. Excluding an unfavorable currency impact of 1.7 percent, sales were down 5.8 percent, due to weakness across most end-markets, partially offset by growth in automotive and the net benefit of acquisitions.
In the second quarter, Timken posted net income of $44.9 million or 57 cents per diluted share, versus net income of $36.7 million or 43 cents per diluted share for the same period a year ago. The year-over-year increase in net income reflects lower material and manufacturing costs, SG&A expenses and pension settlement charges, and income related to distributions under the U.S. Continued Dumping Subsidy Offset Act (CDSOA). These items were partially offset by lower volume, unfavorable price/mix and currency and higher restructuring charges.
Net income in the quarter included income from CDSOA, restructuring expense and other items totaling $1.2 million of income (net). Excluding these items, adjusted net income was $43.7 million or 55 cents per diluted share. This compares with adjusted net income of $49.1 million or 57 cents per diluted share for the same period in 2015.
“We performed well in the quarter despite challenging market conditions, generating strong cash flow and delivering double-digit operating margins,” said Timken President and CEO Richard Kyle. “We also continued to advance our strategic priorities including the recent acquisition of Lovejoy. While we expect our target markets to weaken further in the second half, we are maintaining our full-year adjusted earnings guidance primarily on the strength of our operational excellence initiatives.”
Second-Quarter Segment Results
Mobile Industries reported second-quarter sales of $367.8 million, 5.4 percent lower than the same period a year ago. Excluding unfavorable currency of 1.5 percent, sales were down 3.9 percent compared with the prior year, as growth in automotive and the net benefit of acquisitions were offset by declines in other end markets.
2016 Outlook
The company expects 2016 revenue to be down approximately 6 percent in total versus 2015, including an estimated unfavorable currency impact of 1.5 percent.
Timken now anticipates 2016 earnings per diluted share to range from $1.70 to $1.80 for the full year on a GAAP basis. The company expects 2016 adjusted earnings per diluted share to range from $1.90 to $2, unchanged from its prior estimate.
