Timken shares rose nearly 4% in premarket after first-quarter profit beat estimates and raised fiscal year guidance



NORTH CANTON, Ohio – The Timken Company (NYSE: NYSE:), a global leader in engineered bearings and industrial motion products, reports strong first-quarter results, with adjusted earnings per share (EPS) beating analysts expected. The stock rose 3.78% in pre-market trading on Tuesday.

Although sales were down 5.7% from the prior year, the company reported adjusted earnings of $1.77 per share, beating the consensus estimate of $1.51. First-quarter sales reached $1.19 billion, beating analysts' forecasts of $1.15 billion.

Timken's net profit for the quarter was US$103.5 million, or US$1.46 per diluted share, down from US$122.3 million in the same period last year, or US$1.67 per diluted share. The company's net profit margin also fell slightly to 8.7% from 9.7% in the same period last year. Adjusted EBITDA margin remained strong at 20.7%, although down slightly from 21% in the same period last year.

Timken President and Chief Executive Officer Richard G. Kyle recognized the strength and resiliency of the company's diverse product portfolio and differentiated business model in dynamic economic conditions. “While down from last year's record levels, revenue for the quarter was slightly above our expectations,” Kyle said. He also believed that strong margin performance and favorable price-cost dynamics mitigated the impact of the year-over-year organic revenue decline.

Looking ahead, Timken raised its full-year 2024 outlook and now forecasts an adjusted earnings per share range of $6.00 to $6.30, in line with the consensus estimate of $6.06. The company expects total revenue to decline 2% to 4% from 2023.

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The company's financial position remains strong, with net debt to adjusted EBITDA of 2.1x. Timken also continued its shareholder-friendly approach by paying its 407th consecutive quarterly dividend, bringing the first-quarter dividend to $24.5 million.

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