#USA #North Canton #Timken Company #Industrial Motion #engineered bearings

Timken Company Reports Second-Quarter 2025 Results

The Timken Company (NYSE: TKR), an innovative leader in engineered bearings and industrial motion technology, has announced its financial results for the second quarter of 2025. While the company's sales reached $1.17 billion, marking a decrease of 0.8% compared to the same period last year, this result reflects the ongoing challenges in meeting market demand.

Financial Overview

In the second quarter, Timken reported a diluted earnings per share (EPS) of $1.12 and an adjusted EPS of $1.42. Although the fiscal performance aligns largely with expectations, the company observed a decrease in net income to $78.5 million from $96.2 million the previous year, a notable shift in net income margin from 8.1% to 6.7%.

The adjusted EBITDA for the quarter amounted to $208.2 million, or 17.7% of sales, which is lower than the previous year's $230.2 million (19.5% of sales). This downturn can be attributed to various external factors, primarily tariff-related increases and a decrease in production volume, despite favorable pricing adjustments and organic growth in select market segments.

Segment Performance

Breaking down sales by segment, the Engineered Bearings sector generated revenues of $777.4 million, also down by 0.8% year-over-year. Demand from the renewable energy segment acted as a buffering influence; however, losses in other industry sectors tempered overall growth. The adjusted EBITDA for Engineered Bearings stood at $153.4 million, representing a margin of 19.7%, down from 21.2% from last year.

In the Industrial Motion segment, total sales reached $396 million, showing a minimal decline of 0.7%. While the segment benefitted from revenues linked to recent acquisitions, lower demand across various products curtailed potential growth. The adjusted EBITDA for Industrial Motion was reported at $72.6 million, reflecting an 18.3% margin, down from 20.0% a year prior.

Cash Flow and Shareholder Returns

Despite the dip in earnings, Timken demonstrated robust cash generation capabilities, with operational cash flow standing at $111 million and free cash flow reported at $78 million. The company issued a 3% increase in its quarterly dividend and repurchased over 340 thousand shares, channeling $47 million back to shareholders during the quarter.

Richard G. Kyle, President and CEO of Timken, expressed confidence in the company’s financial resilience, stating, "Timken delivered second-quarter results that were largely in line with expectations, as our team continues to manage through this period of elevated uncertainty." He highlighted the ongoing focus on managing tariffs and cost initiatives to maintain financial performance, despite market fluctuations.

Full-Year Outlook

Looking ahead, Timken has adjusted its full-year 2025 earnings forecast to a range of $3.90 to $4.20 per diluted share, with adjusted EPS expectations between $5.10 to $5.40. Cautious about demand in the second half of the year, the company is now strategizing for revenue growth to remain in a modest range of -2.0% to -0.5% in total compared to 2024.

Kyle added, "We expect the operating environment to remain challenging in the second half, as the trade situation and related macro effects continue to develop. However, our optimism for 2026 persists, and we are positioning the business to harness potential growth in the industrial market."

Conclusion

As Timken navigates fluctuating demand and external market pressures, the company remains focused on strategic initiatives aimed at delivering consistent value to shareholders and capitalizing on future growth opportunities. This proactive approach, alongside a willingness to innovate and adapt, underlines Timken's commitment to its core business and long-term success in the industry.