Timken posts quarterly loss of $35.7M

BUCYRUS - A strong U.S. dollar has not been kind to the Timken Company. The bearings manufacturer, which operates a plant in Bucyrus, saw an operational loss of $35.7 million during the fourth quarter of 2015, it announced Wednesday morning. And sales were down 6 percent compared to the same quarter in 2014. The company's financial results for all of last year weren't any better. Annual sales of $2.9 billion were 7 percent lower than a year earlier, while adjusted net income of $189.1 million was down from $232.9 million in 2014. "Given the soft industrial environment globally, we were pleased with our fourth-quarter results. Demand declined slightly less than anticipated and our cost-reduction initiatives continued to gain momentum, resulting in a solid finish to a challenging year," Richard G. Kyle, Timken's president and CEO, said. "In 2015 we gained share in sectors like automotive, wind and rail, maintained double-digit operating margins, generated strong cash flow, acquired the Carlisle belts product line and made structural improvements to our cost-competitiveness and operating margins. We also continued to return capital to shareholders by increasing our dividend and buying back nearly 10 percent of our outstanding shares." Canton-based Timken employs about 330 people at its facility at 2325 Mansfield St. in Bucyrus, which manufactures automotive bearings, as well as bearings for use in small trailers and industrial applications, such as machinery and machine tools. The plant's primary customers are global automakers. During the fourth quarter, Timken's mobile industries segment saw sales drop by 2 percent from the year before, although discounting currency adjustments sales actually rose by 2 percent for the period, thanks largely to acquisitions. The company's process industries segment did less well, with quarterly sales off by 10 percent, or 6 percent excluding currency. Demand was also weaker in the heavy industries, although there was growth in the wind energy and military marine sectors. The fourth quarter's overall sales numbers continued a recent trend that began after the third quarter of 2014, when sales were up by 8 percent over the same period a year earlier. The company saw sales growth of 4 percent in the fourth quarter of that year and 3 percent in the first quarter of 2015. But that was followed by a drop of 3 percent and 5 percent over the next two quarters, respectively, and then the 2 percent drop in the fourth quarter. Around the globe, Timken saw lower sales for 2015 on every continent, from a decline of 4 percent compared to 2014 in North America to 9 percent lower in Asia and Australia, 11 percent lower in Europe and 13 percent lower in Latin America. However, were it not for the strong U.S. dollar, sales in Europe would have been up 4 percent for the year. In 2015 Timken raised its quarterly dividend to 26 cents per share. It purchased Carlisle Belts, of Springfield, Mo., for $220 million. And it broke ground on a new tapered roller bearing manufacturing facility in Ploiesti, Romania, which is slated to begin production in 2017. Looking ahead to this year, the Timken Company said it has even less reason to be optimistic.It expects sales in its process industries segment to be down by 4 percent, and by 5 percent in mobile industries. "We enter 2016 with a lower backlog and a significant degree of market uncertainty. As such, we are planning for 2016 revenue to be lower than 2015, reflecting softer end-user demand across most of the industrial landscape and a continued strong U.S. dollar," Kyle said. "Our strategic priorities remain the same. We will continue to focus on outgrowing our end markets through our DeltaX initiative, driving operational excellence with an emphasis on cost reductions and cash generation, as well as effective capital deployment to increase shareholder value." The company said sales of automotive bearings, which the Bucyrus plant manufactures, are projected to improve in 2016, particularly in the North American light truck market.