The Timken Company, Canton, OH, reported fourth-quarter sales of $1.21 billion, a decline of 9.7% from the same period a year ago. The company recorded a loss of $36.2 million for the quarter, as compared to profit of $48.3 million in fourth quarter 2007.
For the entire year, Timken reported sales of $5.7 billion, an increase of 8% from 2007. Profit improved 21.6% to $267.7 million.
During the year, the company benefited from strong demand in global industrial markets, surcharges, pricing and currency, as well as acquisitions serving the aerospace and energy market sectors. Lower automotive demand partially offset these benefits.
"Our strategy to reposition the company for more diversified, profitable growth in industrial markets contributed to the year's record results," said James W. Griffith, Timken president and CEO. "We believe the steps we've taken to grow and optimize our business for long-term value creation also position the company to better manage through the current downturn."
Timken implemented its realignment of the Bearings and Power Transmission Group. The group reduced employment by approximately 2,500 positions in the past 15 months, streamlining operations as part of its realignment and in response to lower demand.
Other actions include expanding capabilities in the steel, aerospace and energy businesses through acquisitions and upgrading of facilities.
Segment Results Full-year sales in 2008 for the Bearings and Power Transmission Group were $4 billion, up 4% compared with the prior year. Sales in the fourth quarter of 2008 were $865.1 million, down 13% from the fourth quarter of 2007.
Sales for the Mobile Industries segment were $2.3 billion in 2008, down 7% compared with the prior year. Sales declined as a result of lower demand primarily from the North American light-vehicle market sector. Stronger demand in the off-highway, automotive aftermarket, heavy-truck and rail market sectors, pricing and the effect of currency partially offset the decline in light-vehicle demand. During the year, the company reduced total employment levels and temporarily idled factories beyond normal seasonal shutdowns in response to weakness in demand.
In the fourth quarter, Mobile Industries' sales were $461.8 million, a decrease of 23% from the same period a year ago. The Mobile Industries segment had a loss of $31.5 million in the fourth quarter of 2008, compared with a loss of $5.2 million for the same period a year ago.
The Process Industries segment reported sales of $1.3 billion in 2008, up 18% from the prior year. The increase was driven by strong demand across broad industrial market sectors, new capacity, pricing and currency. Process Industries also benefited from its Asian growth initiative, for which sales now represent approximately 19% of the segment. Sales in the fourth quarter of 2008 were $290.1 million, a decrease of 5% from the fourth quarter of 2007.
Sales for the Aerospace and Defense segment were $431.1 million in 2008, up 38% from the prior year. The increase was driven primarily by acquisitions completed in October 2007 and November 2008, as well as strong demand and favorable pricing. Acquisitions accounted for approximately 60% of the sales increase from the prior year. Sales in the fourth quarter of 2008 were $113.3 million, an increase of 19% from the fourth quarter of 2007.
Sales for the Steel Group, including inter-segment sales, reached $1.9 billion in 2008, up 19% from 2007. Fourth-quarter sales, including inter-segment sales, were $371.5 million, a decrease of 2% from the prior-year period.
The Timken Company manufactures highly engineered bearings, alloy steels, and related components and assemblies. Timken had sales of $5.2 billion in 2007, with operations in 27 countries and about 25,000 employees.