(RTTNews) - Timken Co. (TKR: News ), Thursday reported a swing to loss in the third quarter, hurt by weaker demand in many of its end markets and lower surcharges. Adjusted earnings, however, breezed ahead of the Street consensus, due to cost reductions, improved pricing and lower material costs. Looking ahead, the company raised its adjusted earnings outlook for fiscal 2009. Following the news, the Timken shares gained more than 10% in the intra-day trading.

The company posted a net loss attributable to Timken of $50.1 million or $0.52 per share, compared to net income of $130.4 million or $1.35 per share in the prior year quarter. The result included a loss of $30.8 million or $0.32 per share from the Needle Roller Bearings business, which was accounted as discontinued operation.

Loss from continuing operations for the quarter was $19.3 million or $0.20 per share, compared to income of $123.9 million or $1.28 per share a year ago.

Results for the quarter included special items expense of $55.4 million, compared with $5.5 million last year.

Excluding special items, net income was $5.2 million or $0.05 per share, compared to $135.8 million or $1.40 per share in the year-ago quarter. On average, 8 analysts polled by Thomson Reuters expected the company to report a loss of $0.25 per share for the third quarter. Analysts' estimates typically exclude special items.

Adjusted income from continuing operations was $7.5 million or $0.08 per share, compared with $129.2 million or $1.34 per share in the previous year quarter.
Third quarter sales for Timken declined 43% to $763.6 million from $1.3 billion in the third quarter of 2008, hurt by weaker demand in many of the company's end markets and lower surcharges, partially offset by improved pricing. Four analysts had a consensus revenue estimate of $770.68 million for the third quarter.

Further, Timken noted that the sale of its Needle Roller Bearings business is on track for a year-end completion.

In July, the company agreed to sell the assets of its Needle Roller Bearings business to Japan's JTEKT Corp. (JTEKF.PK). Upon closing, Timken would receive about $330 million in cash for the business, subject to adjustments for working capital. Proceeds from the sale will provide increased liquidity and be used for general company purposes.

For the nine-month period of 2009, net loss attributable to Timken was $113.8 million or $1.18 per share, compared to earnings of $303.8 million or $3.14 per share in the previous year period.

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