By Lily Bearings
©2004-2008
The Timken Co. ended 2009 with a loss of $134 million, or $1.39 a share, as the deep global recession took a big toll on sales of its bearings and steel.
But the Canton manufacturer's fourth quarter came in better than company executives initially expected.
Timken also said Tuesday that it expects ''modest'' growth this year to be led by its steel group as the economy slowly improves.
Sales for the year were $3.1 billion, down 38 percent from a year ago, the company said.
The $134 million annual loss includes $72.6 million from the company's Needle Roller Bearings business that Timken sold off in December. Excluding special items, Timken said it had full-year net income of $30.7 million, or 32 cents per share.
The company said even with what was a difficult year, it generated record free cash flow of $419 million.
For the fourth quarter, Timken lost $20.2 million on sales of $774.6 million. Sales were down 29 percent from the fourth quarter in 2008. Excluding special items, Timken said it had fourth-quarter income of $38.9 million, or 40 cents per share.
The fourth-quarter results exceeded Timken's previous outlook, James W. Griffith, president and chief executive officer, said in a conference call with analysts.
The quarter's results were helped by higher-than-expected shipments of bearings and steel, he said.
Even so, 2009 ''was still disappointing,'' Griffith said.
''The global economic environment made 2009 an extremely challenging year for The Timken Co., which is reflected in the reduction in our sales and earnings,'' Griffith said in a prepared statement. ''However, we responded quickly to the downturn, taking actions that helped generate record free cash flow. We continued shifting our portfolio towards attractive markets, strengthening our balance sheet and improving our operating capabilities. Today we are better positioned to leverage an economic recovery.''
The company is expecting ''a moderate improvement in economic activity'' and is positioned to take advantage of any growth, Griffith said. ''We continue to expand in Asia. . . . Our view is, we'll achieve moderate sales growth in 2010, led by our steel group.''
By ''moderate,'' the company said it expects sales to increase five to 10 percent compared to 2009. Earnings, not including special items, will range from 85 cents to $1.15 a share, the company forecast.
Steel Group sales in 2009 fell 61 percent to $714.9 million from $1.85 billion a year earlier. The group lost $57.9 million.
Bearings and Power Transmission Group were $2.5 billion, down 26 percent from a year ago.
Aerospace and defense segment sales rose 1 percent to $417.7 million in 2009 from $412 million a year ago. The segment includes helicopter bearings, landing gear, health care, machine tools and more.
Process Industries segment sales were $808.7 million in 2009, down 31 percent from $1.17 billion in 2008. The segment includes wind turbines, oil, gas and other energy businesses, conveyors and more.
Mobile Industries sales were $1.25 billion in 2009, down 30 percent from $1.77 billion in 2008. The segment services light vehicles, trucks, rail cars, locomotives and more.
Shares of Timken rose 6 cents to $24.16 on Tuesday. Shares are up 1.9 percent since Jan. 1 and are up 64.5 percent from a year ago.