CHICAGO Timken Co.s
net income plunged year on year in the first quarter, but the
company managed to sustain double-digit operating
margins despite low levels of capacity utilization, the
companys top executive said.
"We saw orders increase as the
quarter unfolded and we remain confident in our ability to
drive improved profitability throughout the remainder of the
year," president and chief executive officer James W. Griffith
said in a statement April 24.
The Canton, Ohio-based steel and
industrial bearings manufacturer reported net income of $75.1
million for the three months ended March 31, down 51.8 percent
from $155.7 million in the same year-ago period, on revenue
that dropped 23.3 percent to nearly $1.09 billion from $1.42
The decline reflects lower
demand across most of the companys end markets, led by
oil and gas, industrial distribution and off-highway market
sectors, as well as higher manufacturing costs. This was
partially offset by acquisitions, improved pricing and lower
selling and administrative expenses.
The steel business recorded
quarterly sales of $346.1 million, down 35.4 percent from
first-quarter 2012 sales of $535.5 million. Steels
earnings before interest and taxes (Ebit) fell 59.3 percent
year on year to $35.8 million from $88 million. Raw material
surcharges declined $72 million from the year-ago quarter.
Timken completed three capital projects totaling $85 million
during the quarter, increasing capacity and manufacturing
effectiveness in the steel business (
amm.com, April 11). The company also acquired Smith
Services Inc., which rewinds and repairs electric motors, and
Interlube Systems Ltd., a U.K.-based provider of automated
lubrication delivery systems and services. It also signed an
agreement with Greenbrier Cos. Inc. to purchase assets, thus
expanding its Mobile Industries segments rail bearing
reconditioning activities, Timken said.