NORTH CANTON, Ohio, May 1, 2018 /PRNewswire/ -- The Timken Company (NYSE: TKR; www.timken.com ), a world leader in engineered bearings and mechanical power transmission products, today reported first-quarter 2018 sales of $883.1 million, up approximately 25 percent from the same period a year ago. The increase was driven by strong organic growth across most end-market sectors led by industrial distribution and off-highway, as well as the benefit of acquisitions and currency.
In the first quarter, Timken posted net income of $80.2 million or $1.02 per diluted share, versus net income of $38.2 million or $0.48 per diluted share for the same period a year ago. In the current quarter, the company benefitted from higher volume, favorable price/mix and manufacturing performance, and the impact of acquisitions, which were partially offset by higher selling, general and administrative (SG&A) and logistics costs. The current quarter also reflects lower pension-related charges and a lower tax rate.
Excluding special items (detailed in the attached tables), adjusted net income in the first quarter of 2018 was $80 million or $1.01 per diluted share, up from $43.7 million or $0.55 per diluted share for the same period in 2017.
"We achieved excellent first-quarter results, reporting strong revenue and earnings growth with expanded margins," said Richard G. Kyle, Timken president and chief executive officer. "Over the last several years, we have grown our portfolio organically and through acquisition, expanded our geographic reach and improved our cost structure. As a result of these strategic actions, we are winning with our customers and outgrowing our markets."
First-Quarter 2018 Segment Results
Mobile Industries reported sales of $488.5 million, up 27.5 percent compared with the same period a year ago. Acquisitions added revenue of $43.1 million in the quarter, or 11.3 percent. Excluding acquisitions, revenue was up 16.2 percent, driven primarily by increased demand in the off-highway, heavy truck and rail sectors, and favorable currency.
Earnings before interest and taxes (EBIT) in the quarter were $51.1 million or 10.5 percent of sales, compared with EBIT of $32.6 million or 8.5 percent of sales for the same period a year ago. The increase in EBIT reflects the impact of higher volume and the benefit of acquisitions, partially offset by higher SG&A and logistics costs. The current period also reflects lower restructuring charges.
Excluding special items (detailed in the attached tables), adjusted EBIT in the quarter was $51.8 million or 10.6 percent of sales, compared with $36.6 million or 9.6 percent of sales in the first quarter last year.
Process Industries sales of $394.6 million increased 23 percent from the same period a year ago, driven primarily by strong demand across the industrial sectors, including distribution, original equipment and services, as well as favorable currency.
EBIT for the quarter was $81.6 million or 20.7 percent of sales, compared with EBIT of $44.1 million or 13.7 percent of sales for the same period a year ago. The increase in EBIT was driven by higher volume and favorable price/mix and manufacturing performance, partially offset by higher SG&A and logistics costs.1
"We are raising our outlook for the year as a result of the momentum we are seeing in our end markets and our confidence in our ability to execute," said Kyle. "As we continue to advance our strategy and stay focused on creating customer value, Timken is positioned to reach new levels of performance in 2018."
The company now expects 2018 revenue to be up approximately 17 percent in total versus 2017. This includes expected organic growth of approximately 12 percent plus the benefit of acquisitions made during 2017 and favorable currency. Within its segments, the company estimates for full-year 2018:
- Mobile Industries sales to be up approximately 17 percent, driven primarily by organic growth in the off-highway, heavy truck and rail sectors, as well as the benefit of acquisitions and favorable currency.
- Process Industries sales to be up approximately 17 percent, reflecting broad growth across the industrial sectors, including distribution, original equipment and services, as well as favorable currency.
Timken now anticipates 2018 earnings per diluted share to range from $3.80 to $3.90 for the full year on a GAAP basis. Excluding special items (detailed in the attached tables), the company expects 2018 adjusted earnings per diluted share to range from $3.90 to $4.00.
Conference Call Information
Timken will host a conference call today at 11 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.
1 Adjusted EBIT is not shown separately, as there were no special items affecting Process Industries results in the current quarter.
About The Timken Company
The Timken Company (NYSE: TKR; www.timken.com ) engineers, manufactures and markets bearings, gear drives, automated lubrication systems, belts, chain, couplings 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 the 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®, Groeneveld®, Drives® and Lovejoy®. Known for its quality products and collaborative technical sales model, Timken posted $3 billion in sales in 2017. With more than 15,000 employees operating from 33 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, plans 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 first quarter of 2018; 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 changes to the company's accounting methods, including the actual impact of the adoption of mark-to-market accounting; weakness in global or regional economic conditions and capital 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; the company's ability to complete and achieve the benefits of announced plans, programs, initiatives, and capital investments; the actual impact of the Tax Cuts and Jobs Act of 2017 on the full-year 2018 global effective tax rate; and retention of CDSOA distributions. 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, 2017, 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.
View original content with multimedia:http://www.prnewswire.com/news-releases/timken-reports-strong-first-quarter-2018-results-raises-full-year-outlook-300639445.html
SOURCE The Timken Company