The Timken Company, Canton, OH, reported sales of $1.43 billion during the first quarter of 2008, an increase of 12% over the same period a year ago. The increase was driven by strong sales in global industrial markets, as the company benefited from its capacity-expansion initiatives, as well as the favorable impact of pricing, surcharges and currency.
During the quarter, the company:
Implemented the next wave of Project O.N.E., Timken's business process improvement and global systems initiative, covering most of the company's remaining U.S. and European operations;
Completed construction of a new industrial bearing manufacturing plant in Chennai, India, and a new aerospace and precision products facility in Chengdu, China, which are part of Timken's strategy of driving growth in key global industrial markets; and
Acquired the assets of Boring Specialties Inc., which provides steel components for the oil and gas industry, further expanding Timken's ability to serve the growing market for high-performance energy products.
The Bearings and Power Transmission Group had first-quarter sales of $1.05 billion, up 13% for the same period last year, primarily resulting from organic growth in the Process Industries and Aerospace and Defense segments, and the favorable impact of acquisitions and currency.
Timken's Mobile Industries sales were $635.3 million, an increase of 4% from $609.5 million for the same period a year ago. Higher sales were driven by stronger demand in the off-highway and heavy-truck market sectors, pricing and the impact of currency. These favorable factors were partially offset by lower demand from the North American light-vehicle market sector, which included the effects of a strike in the automotive industry.
Process Industries had first-quarter sales of $312.6 million, up 25% from $249.2 million for the same period a year ago. The increase resulted from strong demand across broad industrial market sectors, new capacity coming online and advanced customer purchases ahead of Project O.N.E. implementation. In addition, the company benefited from strong pricing and currency.
Timken's Aerospace and Defense business had first-quarter sales of $102.1 million, up 39% from $73.7 million for the same period last year. The increase was driven primarily by the Purdy acquisition, completed in the fourth quarter of last year, as well as strong demand and favorable pricing. Excluding the Purdy acquisition, organic Aerospace and Defense sales rose approximately 10%.
Sales for the Steel Group, including inter-group sales, were $425.0 million, an increase of 9% from $390.3 million for the same period last year. Excluding the net impact of the BSI acquisition and divestment of the group's steel tube manufacturing operations in England in 2007, sales increased 16%. The increase was driven by raw-material surcharges and higher demand in the energy sector, partially offset by lower demand in automotive-related sectors.