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The eBearing News
September 18, 2000
Timken Warns on Third Quarter 2000 Results,
Sparks Analyst Downgrade
copyright © 2000 eBearing Inc.
The Timken Company (USA) warned third quarter 2000 sales and earnings will be, "significantly lower
than the most recent second quarter and below third quarter of 1999." The company cited several factors contributing
to the drops.
First was the strength of the Dollar, especially versus the Euro, which has hurt sales and margins of products exported
from the U.S. and the UK to the continent. Also, the Euro's fall has allowed European competitors to poach Timken's
North American customers with lower prices, putting pressure on Timken's prices and operating margins.
Second, Timken's light duty Automotive markets have begun to slow down in North America yet have increased in Europe,
where the Euro's weakness has hurt profitability.
Third, the industrial market which had started a recovery in early 2000 has now leveled off.
Timken said they expect sales for the second half 2000 to equal or better sales for second half 1999, but that income
for the second half of 2000 will be lower than it was for the second half of 1999.
The company will release final 3Q2000 results on October 17, 2000, followed by a live conference call and webcast
at 1:00 pm EDT at www.Timken.com.
Industry analyst Thomas Burns at Dresdner Kleinwort Bensen was seriously concerned about the company's announcement,
downgrading Timken from "Hold" to "Reduce" and reducing 3Q2000 EPS estimates from $0.28 to $0.12.
Burns indicated his disapproval that Timken was "unwilling to respond" to questions about the negative impact on its earnings from exchange rates, going back to the 2Q2000 earnings conference call.
Burns also mentioned that Timken had just raised prices on certain steel tubing by 2% to 4% on September 15, an
announcement which did not jibe with their statements about downward pressures on North American steel prices and
margins resulting from the decline of the Euro and increased competition.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Unauthorized reproduction is prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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