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Mar 31, 2020
Timken Q1 2020 Earnings Report
Timken's first-quarter results were reported, with sales declining due to lower demand and unfavorable currency, but profitability improved from the previous quarter.
Key Takeaways
Timken reported first-quarter sales of $923.4 million, a decrease of 5.7% year-over-year, driven by lower demand in most end markets and unfavorable currency. Earnings per diluted share were $1.06 on a GAAP basis, with adjusted EPS of $1.11. The company is well-positioned with a solid balance sheet and expects to generate strong cash flow over the remainder of 2020.
First-quarter sales were $923 million, down 5.7 percent from last year.
GAAP earnings per diluted share were $1.06, with adjusted EPS of $1.11.
Net income was $80.7 million, or $1.06 per diluted share.
Free cash flow was $24.4 million.
Forward Guidance
Timken is planning for revenue to decline significantly in the second quarter of 2020 compared to the year-ago period, with markets anticipated to improve from second-quarter levels over the remainder of the year. The company expects to generate strong free cash flow in 2020. Timken plans to reinstate full-year financial guidance at the earliest reasonable opportunity.
Positive Outlook
- Company expects to generate strong free cash flow in 2020.
- Markets anticipated to improve from second-quarter levels over the remainder of the year.
- Company is focused on reducing net debt.
- Timken has sufficient liquidity to meet its near-term needs.
- Company expects to generate strong free cash flow for the remainder of 2020
Challenges Ahead
- Revenue to decline significantly in the second quarter of 2020 compared to the year-ago period
- Company withdrew its 2020 financial guidance due to the evolving impact of COVID-19 on the economy.
- Company has suspended its practice of providing detailed sales and earnings guidance.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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