Machine tools and accessories maker Timken Co. (TKR), Tuesday reported a narrower loss for the fourth quarter, compared to last year, reflecting lower costs and an income tax benefit, notwithstanding a 29% decline in sales. On an adjusted basis, the company reported a profit for the quarter that came in ahead of analysts' estimates. Looking ahead, the company provided its guidance for fiscal year 2010, indicated to come in line with Street expectations.
The Canton, Ohio-based company's net loss attributable to the company for the fourth quarter narrowed to $20.19 million or $0.21 per share from $36.15 million or $0.37 per share a year ago.
Results for the quarter include rationalization/reorganization expenses on cost of products sold of $4.64 million, as well as impairment charges of $80.05 million.
Excluding special items, fourth-quarter 2009 adjusted income attributable to the company was $38.90 million or $0.40 per share, compared to $6.33 million or $0.07 per share in the previous year.
On average, seven analysts polled by Thomson Reuters expected earnings of $0.08 per share for the quarter. Analysts' estimate typically exclude special items.
Loss from continuing operations for the quarter was $7.30 million or $0.08 per share, compared to an income of $1.84 million or $0.01 per share last year.
For the quarter, net sales were $0.77 billion, down 29% from $1.10 billion in the same period a year ago due to weaker demand across most of the company's end markets and lower surcharges, while favorable pricing and currency partially offset the sales decline.
Four analysts estimated revenues of $727.38 million for the quarter.
By segment, net sales to external customers in Mobile Industries declined 13% to $324.63 million from a year ago, reflecting lower unit volume in most market sectors, partially offset by favorable pricing and currency.
Net sales to external customers in the Process Industries segment declined 29% to $189.11 million from last year due to broad-based drop in industrial demand, especially in the power-transmission sector and across the industrial distribution channel.
Aerospace and Defense segment revenues declined 10% to $98.93 million from the comparable quarter last year due to reduced demand in the commercial and general aviation markets. Total Bearings and Power Transmission Group revenues were $612.67 million, down 25% from a year ago.
Steel Group revenues declined to $161.93 million from $346.52 million in the previous year due to fewer shipped tons.
Cost of product sold declined to $596.76 million from $918.48 million in the previous year. Gross profit was $173.20 million, compared to $177.82 million a year ago.
Selling, administrative & general expenses declined to $112.81 million from $139.73 million in the previous year.
Income tax benefit for the quarter was $31.09 million, compared to a provision of $1.98 million a year ago.
For the full year 2009, net loss attributable to the company was $133.96 million or $1.39 per share, compared to an income of $267.67 million or $2.78 per share in the previous year. Adjusted net income was $30.68 million or $0.32 per share, compared to $313.42 million or $3.25 per share a year ago. Net sales for the year declined 38% to $3.14 billion from $5.04 billion a year ago.
Analysts expected earnings of $0.31 per share on revenues of $3.42 billion for the fiscal year 2009.
Looking forward, the company expects the global economy to grow modestly in 2010 following 2009's retraction.
The company anticipates 2010 earnings, excluding special items, to range from $0.85 to $1.15 per share. Eight analysts currently expect 2010 earnings per share of $1.07.
Timken also anticipates an increase in sales of about 5% to 10% over 2009, driven primarily by stronger shipments in the Steel Group, as customers rebuild inventory levels. Analysts expect revenues of $3.37 billion for the next fiscal year.
TKR is currently trading at $24.50, up 0.40 or 1.66%, on a volume of 0.71 million shares on the NYSE.
For comments and feedback: editorial@rttnews.com