The Timken Company (NYSE: TKR), Canton, OH, reported sales of $1.3 billion in the first quarter of 2011, an increase of 37 percent over the same period a year ago. The sales increase reflects stronger global demand across most of the company's end markets as well as higher material surcharges and pricing.
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Income from continuing operations was $112.7 million. The improvement in first-quarter earnings reflects increased demand and favorable mix, as well as surcharges and pricing.
Among recent developments, the company:
- Announced a $35 million investment to install an in-line forge press at the Faircrest Steel Plant in Canton, Ohio;
- Accelerated capacity expansions in Asia, including its Chennai, India, plant and its plants in Wuxi and Xiangtan, China; and
- Announced planned productivity improvements across its steel plants to achieve a 120,000-ton capacity increase.
By Segment
In the first quarter, Mobile Industries' sales were $443 million, up 21 percent from last year's first-quarter sales. Higher demand across all of the segment's end markets drove the increase, led by the off-highway and rail sectors.
Process Industries' first-quarter sales were $285 million, up 38 percent from $206.6 million for the same period a year ago. Increased global demand from industrial distribution, growth in Asia and sales of new products contributed to the improvement.
Aerospace and Defense had first-quarter sales of $79.1 million, down 14 percent from $92.1 million for the same period last year. The decline reflects reduced demand, principally in the segment's defense-related business.
Sales for the Steel segment, including inter-segment sales, were $481.5 million in the first quarter, an increase of 78 percent from $270.3 million for the same period last year. Stronger demand, particularly in the oil and gas and industrial market sectors, and surcharges contributed to the improvement. Raw-material surcharges increased approximately $75 million from the first quarter last year.
Outlook
Timken is increasing its 2011 full-year sales outlook to be up 20 to 25 percent over 2010, driven primarily by stronger demand in the Steel, Process Industries and Mobile Industries segments. For its business segments, Timken expects:
- Mobile Industries segment sales to be up 10 to 15 percent, with increased overall demand in the off-highway, rail and heavy-truck sectors;
- Process Industries segment sales to be up 20 to 25 percent, driven by increased demand from global industrial distribution, combined with sales of new products and continued growth in Asia;
- Aerospace and Defense segment sales to be up 5 to 10 percent, reflecting improving demand in commercial aerospace and health and positioning control sectors, while the defense sector remains weak; and
- Steel segment sales to increase 35 to 40 percent from 2010, driven by improved demand across all market sectors, capacity increases and surcharges.