Timken Co. raise year

JACKSON TWP. – Timken Co. reported higher revenue for the third quarter, but profits remained flat compared with the previous year because of higher operating cost and higher taxes.

The company expects to end the year with increased revenue and improved earnings per share. Timken also is in the process of selling its Aerospace Drive Systems business based in Manchester, Connecticut.

More:Timken Co. plans to buy GGB Bearing, expand bearings business

The company on Wednesday reported a profit of $87 million, or $1.18 per share, for the quarter ended Sept. 30, compared with $88.1 million, $1.14 per share last year. The profit came on net sales of $1.14 billion, a 9.6% gain from $1.04 billion in the 2021 third quarter.

So far this year, Timken profits are $310.2 million, or $4.16 per share, compared with $306.2 million, or $3.97 per share in 2021. Revenue has increased 9.2% to $3.41 billion compared with $3.13 billion last year.

Along with increased costs and taxes, the pending sale of Aerospace Drive Systems (ADS) affected third quarter results. The company had impairment, restructuring and reorganization costs of $37.5 million during the quarter, with $29 million tied to the sale.

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Timken said it reached an agreement early in October to sell ADS, which supplies drive system components and other parts for military and civil helicopters. Revenue from the business was expected to be about $50 million.

Richard G. Kyle, president and chief executive officer, told stock analysts during a conference call that Timken determined ADS would do better under different ownership because of changes in use and design of military helicopters. The sale should be completed before the year ends. Timken acquired the operation, formerly known as Purdy Corp., in October 2007.

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Meanwhile, Timken expects to complete the acquisition of GGB Bearings, which makes engineered and customized plain bearings, during the fourth quarter. GGB Bearings products should pair well with the tapered roller bearings and ball bearings made by Timken, Kyle said. The business is expected to have annual revenue of about $200 million.

The company also is seeing progress with a new bearing factory that opened last December in San Jose Iturbide, Mexico. The facility, which has about 100 employees and is automated, has been ramping up over the past year, Kyle said.

Growth in end-market sectors, led by industrial distribution and off-highway, contributed to higher revenue, as did higher pricing for products. Sales of Timken's process industries products increased 10.8% to $609.5 million, while mobile industries sales increased 8.1% to $526.9 million.

Kyle said the company is raising its outlook to reflect strength in market demand and improving performance.

Timken is seeing positive momentum as 2023 approaches, while the order backlog is at a high level and pricing remains positive.

"We're taking in orders at a faster pace than last year," Kyle told stock analysts, adding that the company expects the addition of GGB Bearings to create value.

The company had projected earnings per share to range between $5.15 and $5.30 for the full year. The adjusted earnings per share is set to range between $5.80 and $5.95, the company said. Revenue is expected to increase by 9% for the year.

Reach Edd at 330-580-8484 or [email protected] On Twitter: @epritchardREP