Timken raises adjusted earnings outlook as motion segment grows
The industrial bearing maker raised its full-year adjusted earnings per share forecast to a range of $6.05 to $6.35.
The industrial bearing maker Timken (TKR) reported second-quarter net sales of $1.26 billion, an increase of 7.5% year-over-year.
Growth in the quarter remained steady, though the pace of net sales growth slowed slightly from the 8.0% increase recorded in the first quarter. Organic sales growth rose 4.4%, a marginal acceleration from the 4.3% growth seen in the prior quarter.
Adjusted earnings per share rose 28.9% year-over-year to $1.83, accelerating from a 19.3% increase to $1.67 in the first quarter. The company's adjusted EBITDA margin expanded to 19.6%, up from 18.8% in the previous quarter. However, net income margin compressed 440 basis points year-over-year to 2.3%, down from 6.7% in the second quarter of 2024.
Performance was driven largely by the Industrial Motion segment, where sales grew 14.6% year-over-year, up from 12% growth in the first quarter. The segment's adjusted EBITDA margin rose to 23.3%, compared to 21.5% in the first quarter and 18.3% in the second quarter of 2024.
In contrast, the Engineered Bearings segment saw sales growth slow to 3.8% year-over-year, down from 6% in the first quarter. The adjusted EBITDA margin for the segment rose slightly to 20.0% from 19.7% in the prior quarter.
Timken raised its full-year 2024 adjusted EPS outlook to a range of $6.05 to $6.35, up from the previous guidance of $5.75 to $6.25. The company lowered its full-year 2024 GAAP EPS outlook to $3.75 to $4.05, down from the first-quarter guide of $4.70 to $5.20.
The company recorded $94.4 million in impairment, restructuring, and reorganization charges in the second quarter related to the anticipated divestiture of its belts business to Gates Industrial Corporation plc. Additionally, second-quarter adjusted EBITDA included a net benefit of $8.0 million for IEEPA tariff refunds.