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The eBearing News
September 1, 2006
Timken Reports Second Quarter 2006 Results
copyright © 2006 eBearing Inc.
The Timken Company (USA; NYSE:
TKR)
reported financial results for second quarter fiscal 2006, ended June 30, 2006.
Sales for the quarter were USD $1.39 billion, up 5% over 2005 and setting a new quarterly
sales record.
Net income hit $74.7 million, up 11% from $67.3 million earned in second quarter 2005.
Jim Griffith, Timken's CEO and President, commented: "This quarter’s results reflect
good progress towards fundamentally improving financial performance.
Strong industrial markets and record Steel Group results contributed to our record second
quarter. Our financial performance is underpinned by our strategic progress as we
continue to improve the level of innovation and execution across the company."
Timken particularly stressed its ability to generate free cash flow, ending second quarter
with significantly less debt and improved debt-to-capital ratio than it had at the end of
first quarter 2006 -- $665.2 million and 28.8% debt-to-capital from $737.2 million and 31.9%.
The company said it expects strong free cash flow results to continue through 2006.
Industrial Group reported second quarter sales up 6% from 2005, to $529.1 million
from 2005's $498.2 million.
Industrial's sales reflected broadly stronger demand, led by aerospace, industrial aftermarket,
off-highway equipment and rail. The group's ability to raise prices along with volume was offset somewhat
by higher manufacturing costs and unfavorable foreign currency exchange rates.
Automotive Group recorded second quarter sales of $426.7 million, up $800,000 from second quarter 2005.
Although Automotive has been able to put through price increases with new contracts, volume was hurt by
giving up marginal and unprofitable OEM contracts, and generally lower demand from North American
auto manufacturers. Lower volumes translate to higher per-unit cost allocations.
Looking forward, Timken said Automotive results should improve as more favorable pricing continues to
develop, and "continued favorable shift in business mix." Automotive is in the midst of a long-term
restructuring effort which is still, "on track."
Steel Group reported record second quarter sales of $469.1 million, up 5% from 2005. Steel also
is benefiting from new contract pricing and scrap cost pass-through surcharges. Steel reported higher
demand from service centers, for aerospace and energy-related bearings. Automotive demand was
down slightly.
For the remainder of 2006, Timken suggested Steel's profitability will be hurt by seasonality but
for sales and profits to still exceed 2005.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Bruce Carr edited this content.
Copyrighted material; unauthorized reproduction prohibited.
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Entire contents Copyright © 1999-2011, eBearing Inc. All rights reserved.
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