Timken Co.'s (TKR) fourth-quarter loss narrowed as the company
benefited from better pricing, cost cutting and lower material
expenses.
The maker of bearings and specialty steel products also
projected 2010 earnings of 85 cents to $1.15 a share and sees sales
rising 5% to 10%, driven by stronger steel shipments as customers
are expected to rebuild inventory levels. Analysts surveyed by
Thomson Reuters expected earnings of $1.07 per share on sales of
$3.37 billion, or up 9%.
Timken has been cutting costs amid an industrywide slump in
steel demand among its key buyers, including the automotive,
construction and industrial-equipment sectors. Late last year, the
company completed the sale of its needle roller bearings business
to Japan's JTEKT Corp. (6473.TO), receiving $330 million from the
transaction.
On Tuesday, Timken reported a loss of $20.2 million, or 21 cents
a share, compared with a year-earlier loss of $36.2 million, or 37
cents a share. Excluding write-downs in the latest quarter and
other impacts, earnings surged to 40 cents from 7 cents. Revenue
tumbled 29% to $774.6 million.
Wall Street expected earnings of 8 cents on revenue of $727
million.
Gross margin grew to 22.4% from 16.2%.
Sales in the bearings and transmission group, its largest
business, were down 18% although profit jumped 50%. Sales also fell
in all of its other units.
Shares closed Monday at $24.10 and were inactive in premarket
trading.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com