Timken Net Rises 37% on Shift to Aerospace China (Update4)
Timken Net Rises 37% on Shift to Aerospace, China (Update4)
By Rob Delaney
Jan. 31 (Bloomberg) — Timken Co., the supplier of bearings
to the world;s top five automakers, said fourth-quarter profit
rose 37 percent as it benefited from orders from the aerospace
industry and China.
Net income rose to $48.3 million, or 50 cents a share, from
$35.3 million, or 37 cents, a year earlier, Canton, Ohio-based
Timken said today in a statement. Sales rose 8.9 percent to
$1.34 billion.
Chief Executive Officer James W. Griffith is trying to
overcome a drop in sales to U.S. automakers by expanding in Asia
and raising prices for specialty-steel components used by
customers such as Caterpillar Inc. Timken bought Purdy Corp.,
which makes aircraft components, for $200 million in October to
help broaden its customer base.
“Global mining and energy markets are booming as prices for
many commodities are near record highs, and backlogs for bearings
and bars extend well into the second half of 2008,;; Griffith
said on a call with analysts. Construction demand in China
increased Timken;s 2007 sales there by 30 percent, he said.
Timken rose $1.36, or 4.7 percent, to $30.23 at 4:33 p.m. in
New York Stock Exchange composite trading, its biggest gain since
Aug. 10. The shares have gained 5.7 percent in the past year.
2008 Forecast
Timken said earnings per share excluding certain items will
rise to $2.75 to $2.95 in 2008. The average estimate of seven
analysts surveyed by Bloomberg was for $2.87 a share.
Excluding one-time items, Timken said it earned 51 cents a
share from continuing operations, trailing the 55-cent average
estimate of five analysts in a Bloomberg survey.
Per-share earnings for 2007 from continuing operations,
excluding special items, rose to $2.40, the company said in the
statement. In October, the company forecast 2007 earnings on that
basis would be $2.40 to $2.50.
Ford Motor Co. Chief Economist Ellen Hughes Cromwick and
General Motors Corp.;s Ted Chu, senior manager of economic and
industry analysis, both predicted this month that 2008 U.S. auto
sales would decline 2.5 percent to 15.7 million from 16.1 million
last year.
China;s December auto sales rose 11 percent on an annual
basis to 839,000 units, according to the China Automotive
Information Network.
Timken;s plant in Wuxi, China, has increased sales to a
Shanghai-based unit of Volkswagen AG that makes transmissions for
Golfs, Boras and other models sold in the Asian country,
according to Timken;s Web site.
Tenneco Inc., the largest producer of automobile-exhaust
systems, Methode Electronics Inc. and other U.S. parts makers are
closing plants or cutting jobs as they shift production to lower-
cost countries.
To contact the reporter on this story:
Rob Delaney in Toronto at
