Core Insights - The Timken Company will participate in the Baird Global Industrial Conference on November 11, 2025, with a presentation scheduled at 4:05 p.m. Central Time [1][2] - Lucian Boldea, the president and CEO, and Michael A. Discenza, the CFO, will represent the company during the presentation [2] - A live webcast of the presentation will be available on the company's investor relations website, with a replay accessible until November 25, 2025 [2] Company Overview - The Timken Company is a global leader in engineered bearings and industrial motion, with a focus on designing next-generation products for various industries [3] - The company reported sales of $4.6 billion in 2024 and employs approximately 19,000 people across 45 countries [3]

Core Insights - Timken Company reported strong financial performance with an EPS of $1.35, surpassing the estimated $1.25, and revenue of approximately $1.16 billion, exceeding the estimated $1.12 billion [1][6] Financial Performance - In Q3 2025, Timken's revenue reached $1.16 billion, reflecting a 2.7% increase year-over-year and exceeding Wall Street expectations by 2.89% [2] - The company's EPS increased to $1.35 from $1.23 in the previous year, demonstrating consistent growth [2] - Timken has outperformed EPS expectations in three of the past four quarters, with a notable surprise of 5.97% in the previous quarter [3] Financial Metrics - Timken's net income margin is reported at 6.0%, with an adjusted EBITDA margin of 17.4% [4] - The company generated strong cash from operations amounting to $201 million and a free cash flow of $164 million, indicating a healthy cash position [4] Future Outlook - Timken updated its full-year 2025 outlook, expecting EPS to range between $3.90 and $4.00, with adjusted EPS projected between $5.20 and $5.30 [5][6] - The company maintains a P/E ratio of 17.05 and a debt-to-equity ratio of 0.67, indicating a moderate level of debt compared to equity [5]

Financial Performance - Net sales for Q3 2025 increased to $1,157.1 million, a 2.7% increase from $1,126.8 million in Q3 2024, driven by favorable pricing and acquisitions[96]. - Net income for Q3 2025 decreased to $74.3 million, down 15.2% from $87.6 million in Q3 2024, primarily due to incremental tariff costs and a prior gain on real estate sale[96][97]. - For the nine months ended September 30, 2025, net sales decreased to $3,470.8 million, a decline of 0.8% compared to $3,499.4 million in the same period of 2024[96]. - The company expects full-year 2025 revenues to decline approximately 0.75% compared to 2024, primarily due to lower demand across both segments[99]. - Operating income for Q3 2025 was $139.4 million, a decrease of 4.7% from $146.3 million in Q3 2024, impacted by tariff costs and prior gains[101]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $618.0 million, with an adjusted EBITDA margin of 17.8%[147]. - Net income for the trailing twelve months ended September 30, 2025, was $326.5 million, down from $375.3 million for the same period ending December 31, 2024[151]. - Adjusted EBITDA for the trailing twelve months was $796.2 million, a decrease from $844.8 million for the same period ending December 31, 2024[152]. Costs and Expenses - Incremental tariff costs for Q3 2025 amounted to $20 million, contributing to the increase in cost of products sold[102]. - Interest expense for Q3 2025 decreased to $27.3 million, down 9.9% from $30.3 million in Q3 2024, due to lower average debt levels[103]. - Income tax expense increased by $8.6 million or 35.0% for the three months ended September 30, 2025, primarily due to the impact of withholding taxes on dividend distributions[106]. - SG&A expenses decreased for the three months ended September 30, 2025, primarily due to lower bad debt expense and professional services expenses[105]. - Cost of products sold for the Engineered Bearings segment increased by $17 million due to incremental tariff costs for the three months ended September 30, 2025[115]. - The cost of products sold increased by $20 million for the nine months ended September 30, 2025, primarily due to acquisitions and higher manufacturing costs[118]. - Unallocated corporate expenses decreased by 24.8% to $17.0 million for the three months ended September 30, 2025, compared to $22.6 million in 2024[119]. Segment Performance - For the three months ended September 30, 2025, net sales for the Engineered Bearings segment increased by $25.1 million or 3.4% compared to the same period in 2024, driven by higher pricing and renewable energy demand[114]. - Adjusted EBITDA for the Engineered Bearings segment increased by $5.8 million or 4.2% for the three months ended September 30, 2025, due to favorable pricing and lower material and logistics costs[115]. - The Engineered Bearings segment's net sales, excluding the effects of foreign currency exchange rate changes, decreased by $8.4 million or 0.4% for the nine months ended September 30, 2025 compared to the same period in 2024[115]. - The Industrial Motion segment's net sales for the three months ended September 30, 2025, were $391.3 million, a 1.3% increase from $386.1 million in the same period of 2024[117]. - Adjusted EBITDA for the three months ended September 30, 2025, was $74.5 million, reflecting a slight increase of 0.4% compared to $74.2 million in 2024[117]. - For the nine months ended September 30, 2025, net sales decreased by $51.5 million or 4.4%, totaling $1,121.3 million when excluding acquisitions and currency impacts[118]. - Adjusted EBITDA for the nine months ended September 30, 2025, decreased by $21.8 million or 9.2%, totaling $214.2 million compared to $236.0 million in 2024[118]. Cash Flow and Debt - Net cash provided by operating activities increased by $73.9 million to $371.0 million for the nine months ended September 30, 2025, compared to $297.1 million in 2024[121]. - The Company had $449.1 million in cash and cash equivalents as of September 30, 2025, with $850.0 million available under committed credit lines[128]. - The ratio of net debt to capital improved to 33.5% as of September 30, 2025, down from 36.1% at the end of 2024[127]. - The Company maintained a consolidated interest coverage ratio of 7.76 to 1.0 as of September 30, 2025, well above the minimum requirement of 3.0 to 1.0[129]. - The Company issued €600 million 2034 Notes with a 4.13% interest rate, maturing on May 23, 2034, to redeem $350 million 2024 Notes and repay other debts[133]. - The ratio of net debt to adjusted EBITDA increased to 2.1 as of September 30, 2025, compared to 2.0 as of December 31, 2024[151]. - Total net debt as of September 30, 2025, was $1,663.7 million, slightly down from $1,689.5 million as of December 31, 2024[152]. Strategic Focus and Outlook - The company is focusing on profitable growth by expanding into new markets and leveraging its expertise in materials science and friction management[92]. - The company anticipates that tariffs and related macroeconomic effects will adversely impact operating income in 2025[98]. - The company anticipates potential impacts from global economic conditions, including supply chain disruptions and changes in customer demand[153]. - The company is focused on maintaining favorable credit ratings and satisfying obligations under its debt agreements[156]. - There have been no material changes in reported market risk since the last annual report[157]. Other Notable Items - The Company acquired CGI, Inc. during the third quarter of 2024, and results for CGI are reported in the Industrial Motion segment[113]. - The Company made cash contributions of $33.7 million to global defined benefit pension plans during the first nine months of 2025, expecting to contribute approximately $36 million in 2025[135]. - For the nine months ended September 30, 2025, the Company recorded positive foreign currency translation adjustments of $199.7 million, compared to negative adjustments of $0.2 million in the same period of 2024[140]. - Free cash flow for the three months ended September 30, 2025, was $163.8 million, up from $88.2 million in the same period of 2024[150]. - Diluted earnings per share for the three months ended September 30, 2025, were $0.99, down from $1.16 in 2024, while adjusted EPS increased to $1.37 from $1.23[149]. - The Company recorded severance costs of $9.3 million related to the CEO transition during the three months ended March 31, 2025[143]. - The company does not have any off-balance sheet arrangements with unconsolidated entities[136]. - Impairment, restructuring, and reorganization charges amounted to $18.2 million for the trailing twelve months ended September 30, 2025[152]. - CEO transition expenses for the twelve months ended September 30, 2025, were primarily related to the settlement agreement with the former CEO, totaling $19.5 million[152].

Financial Data and Key Metrics Changes - Revenue for the third quarter was $1.16 billion, an increase of 2.7% from the previous year [12] - Adjusted EBITDA margins improved to 17.4%, a 50 basis point increase [12] - Adjusted earnings per share for the quarter was $1.37, up 11% from last year [12] Business Line Data and Key Metrics Changes - Engineered bearings sales were $766 million, up 3.4% from last year, with organic sales up 2.7% driven by higher pricing and volumes [16] - Industrial motion sales were $391 million, up 1.3% from last year, but organic sales declined 3.5% due to lower demand [18] Market Data and Key Metrics Changes - In the Americas, revenue was down 1%, with growth in North America offset by lower revenue in Latin America [13] - Asia Pacific saw a 2% increase, led by growth in China, particularly in wind energy shipments [13] - EMEA experienced a 2% growth, marking the first growth in over two years, driven by off-highway, rail, and heavy industry sectors [13] Company Strategy and Development Direction - The management team is focused on margin expansion and improving top-line performance through an 80/20 mindset, targeting profitable verticals [9] - The company aims to leverage its strong market positions and enhance cross-selling opportunities across its product portfolio [10] - Future growth is targeted in newer markets such as automation and food and beverage [8] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2026, citing encouraging order trends in key markets [34] - The evolving trade situation continues to impact industrial market activity, leading to cautious customer behavior [22] - The company is focused on mitigating tariff impacts and expects to recapture margins in 2026 [24] Other Important Information - The company generated operating cash flow of $201 million in the third quarter, with free cash flow of $164 million, significantly up from last year [19] - The full-year earnings guidance midpoint is reaffirmed at $5.25, with a slight increase in the sales outlook [20] Q&A Session Summary Question: Near-term outlook and order rates - Management noted that the outlook includes the latest order trends, with a seasonally declining order book but year-over-year orders up [32] Question: Organic growth implications for Q4 - Management indicated no evidence of a pull forward into Q3 and remains cautious about Q4 due to trade uncertainties [41] Question: Impact of tariffs and pricing strategies - Management is focused on controlling tariffs and expects to fully offset the tariff impact exiting this year, with pricing strategies in place [43] Question: Organic sales decline by segment for Q4 - Organic sales are expected to decline in both segments, with a more significant decline in industrial motion due to last year's military marine project [49] Question: Growth in renewable energy - Management highlighted strength in renewable energy, particularly in wind, while solar remains challenged [51] Question: Long-term capital allocation strategy - No immediate changes in capital allocation strategy, with a focus on disciplined growth and leveraging acquired businesses [65] Question: Margin drivers for 2026 - Management confirmed they are on track to deliver $75 million in cost savings, with expectations for incremental savings in the first half of next year [100]

Financial Data and Key Metrics Changes - Revenue for the third quarter was $1.16 billion, an increase of 2.7% year-over-year [12] - Adjusted EBITDA margins improved to 17.4%, a 50 basis point increase from the previous year [12] - Adjusted earnings per share (EPS) for the quarter was $1.37, up 11% from last year [12] Business Line Data and Key Metrics Changes - Engineered bearings sales were $766 million, up 3.4% from last year, with organic sales growth of 2.7% driven by higher pricing and volumes [16] - Industrial motion sales were $391 million, up 1.3% from last year, but organic sales declined 3.5% due to lower demand [18] Market Data and Key Metrics Changes - In the Americas, revenue was down 1%, with growth in North America offset by lower revenue in Latin America [13] - Asia Pacific saw a 2% increase, led by growth in China, particularly in wind energy shipments [13] - EMEA experienced a 2% growth, marking the first growth in over two years, driven by off-highway, rail, and heavy industry sectors [13] Company Strategy and Development Direction - The company aims to improve margins and grow faster in profitable verticals, focusing on an 80/20 approach to enhance performance [9][10] - There is a strong emphasis on leveraging the Timken brand and global footprint to drive revenue growth in acquired businesses [10] - The company is targeting growth in newer markets such as automation and food and beverage [8] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2026, citing encouraging order trends in key markets [34] - The company is focused on mitigating tariff impacts and expects to recapture margins in 2026 [24][43] - Management highlighted the importance of operational discipline and cash flow generation, with a target of over $100 million in free cash flow for the fourth quarter [19] Other Important Information - The company reaffirmed its full-year earnings guidance midpoint of $5.25, despite a $0.05 headwind from tariffs [20] - The expected full-year net negative impact from tariffs is approximately $15 million, an increase from prior estimates [24] Q&A Session Summary Question: Near-term outlook and order rates - Management noted that the outlook incorporates the latest order trends, with a cautious approach due to the tariff situation and uncertain trade environment [32] Question: Organic growth implications for Q4 - Management indicated no evidence of a pull forward into Q3 and remains cautious about Q4 due to trade uncertainties [41] Question: Impact of tariffs and pricing strategies - Management is focused on controlling tariffs and expects to fully offset the tariff impact exiting this year, with pricing strategies in place [43] Question: Organic sales decline by segment - Both segments are expected to see organic sales declines in Q4, with industrial motion anticipated to decline more significantly [49] Question: Growth in renewable energy - Management highlighted strength in wind energy shipments, particularly in China, while solar remains challenged [51] Question: Long-term capital allocation strategy - No immediate changes in capital allocation strategy, with a focus on balanced capital allocation and disciplined growth [65] Question: Margin drivers and cost savings - Management confirmed they are on track to deliver $75 million in cost savings, with a portion expected to benefit the first half of next year [100]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $1.16 billion, an increase of 2.7% year-over-year [12] - Adjusted EBITDA margins improved to 17.4%, a 50 basis point increase from the previous year [12] - Adjusted earnings per share (EPS) for the quarter was $1.37, up 11% from last year [12] Business Line Data and Key Metrics Changes - Engineered bearings sales reached $766 million, up 3.4% from last year, with organic sales increasing by 2.7% [17] - Industrial motion sales were $391 million, a 1.3% increase from last year, but organic sales declined by 3.5% [18] Market Data and Key Metrics Changes - In the Americas, revenue decreased by 1%, with growth in North America offset by lower revenue in Latin America [13] - Asia Pacific saw a 2% increase, driven by growth in China, particularly in wind energy shipments [13] - EMEA also experienced a 2% growth, marking the first growth in over two years, led by off-highway, rail, and heavy industry sectors [13][84] Company Strategy and Development Direction - The company aims to improve margins and grow faster in profitable verticals, focusing on an 80/20 approach to enhance operational efficiency [9][61] - There is a strong emphasis on leveraging the Timken brand and global footprint to drive revenue growth in acquired businesses [10] - The company is targeting growth in newer markets such as automation and food and beverage [8] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2026, citing encouraging order trends in key markets [34][24] - The evolving trade situation and tariff impacts are acknowledged as challenges, but the company is focused on mitigating these through pricing and operational efficiencies [44][24] Other Important Information - The company generated operating cash flow of $201 million in Q3, with free cash flow of $164 million, significantly up from last year [20] - The full-year earnings guidance midpoint is reaffirmed at $5.25, with a slight increase in the sales outlook [21] Q&A Session Summary Question: Near-term outlook and order rates - Management noted that the outlook incorporates the latest order trends, with a seasonally declining order book in Q3 but year-over-year orders up [32] Question: 2026 guidance and demand environment - Management is cautiously optimistic about 2026, expecting to leverage recovery in market volumes into higher profitability [34] Question: Organic growth implications for Q4 - There was no indication of a pull forward in Q3, and management remains cautious about Q4 due to trade uncertainties [40][42] Question: Impact of tariffs and pricing strategies - Management is focused on controlling tariff impacts through pricing and expects to fully offset these impacts by 2026 [44][91] Question: Segment performance in Q4 - Organic sales are expected to decline in both segments, with a more significant decline anticipated in industrial motion due to tough comparisons [48] Question: Long-term capital allocation strategy - The company plans to maintain a balanced capital allocation strategy, focusing on growth opportunities within its existing portfolio [65] Question: Growth in EMEA and sustainability - Growth in EMEA is attributed to reaching the bottom of a prolonged decline, with new business wins in off-highway and rail sectors [84] Question: Margin expectations for Q1 2026 - A significant step up in margins is expected from Q4 to Q1, driven by pricing actions and cost savings [86]

Financial Performance - The company reported net sales of $1.157 billion in 3Q 2025, a 2.7% increase year-over-year (YOY)[13] - Organic sales increased by 0.6% YOY[6] - Adjusted EBITDA was $202 million, representing a 17.4% margin, a 50 bps increase YOY[6, 13] - Adjusted EPS was $1.37, an 11% increase YOY[6] - Free cash flow was $164 million[6] Segment Performance - Engineered Bearings segment net sales were $766 million, a 3.4% increase YOY[23] - Engineered Bearings adjusted EBITDA was $144 million, with a 18.8% margin[23] - Industrial Motion segment net sales were $391 million, a 1.3% increase YOY[28] - Industrial Motion adjusted EBITDA was $75 million, with a 19.0% margin[28] Outlook - The company reaffirmed its 2025 EPS outlook at the midpoint, with an updated range of $5.20-$5.30[6, 36] - Free cash flow for 2025 is expected to be approximately $375 million[35] - Full-year 2025 sales are expected to decrease by 0.75% at the midpoint[36] Capital Allocation - The company paid its 413th consecutive quarterly dividend of $0.35 per share[6, 32] - Net debt to adjusted EBITDA ratio was 2.1x[6, 8]

Core Insights - Timken reported revenue of $1.16 billion for the quarter ended September 2025, reflecting a year-over-year increase of 2.7% and surpassing the Zacks Consensus Estimate of $1.12 billion by 2.89% [1] - The company's EPS for the quarter was $1.37, up from $1.23 in the same quarter last year, resulting in an EPS surprise of 9.6% compared to the consensus estimate of $1.25 [1] Financial Performance Metrics - Net Sales in the Industrial Motion segment reached $391.3 million, exceeding the average estimate of $383.75 million by analysts, marking a year-over-year increase of 1.4% [4] - Net Sales in the Engineered Bearings segment totaled $765.8 million, surpassing the average estimate of $740.75 million, with a year-over-year growth of 3.4% [4] - Adjusted EBITDA for the Industrial Motion segment was reported at $74.5 million, higher than the estimated $70.56 million [4] - Adjusted EBITDA for the Engineered Bearings segment was $144.2 million, exceeding the average estimate of $135.19 million [4] Stock Performance - Timken's shares have returned 2.7% over the past month, while the Zacks S&P 500 composite has seen a change of 3.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - Timken (TKR) reported quarterly earnings of $1.37 per share, exceeding the Zacks Consensus Estimate of $1.25 per share, and showing an increase from $1.23 per share a year ago, resulting in an earnings surprise of +9.60% [1] - The company achieved revenues of $1.16 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.89% and up from $1.13 billion year-over-year [2] - Timken has outperformed consensus EPS estimates three times over the last four quarters and has topped consensus revenue estimates four times in the same period [2] Financial Performance - The earnings surprise of +9.60% indicates strong performance relative to expectations, with a previous quarter's earnings also exceeding estimates by +5.97% [1][2] - The current consensus EPS estimate for the upcoming quarter is $1.17 on revenues of $1.08 billion, while the estimate for the current fiscal year is $5.25 on revenues of $4.52 billion [7] Market Position - Timken shares have increased approximately 8.2% since the beginning of the year, in contrast to the S&P 500's gain of 17.2%, indicating underperformance relative to the broader market [3] - The Zacks Industry Rank places the Electronics - Miscellaneous Products sector in the top 20% of over 250 Zacks industries, suggesting a favorable industry outlook [8] Future Outlook - The sustainability of Timken's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The estimate revisions trend for Timken was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6]

Financial Performance - Timken reported third-quarter 2025 net sales of $1.16 billion, an increase of 2.7% compared to $1.13 billion in the same period last year[3][4]. - The company's net income for the quarter was $69.3 million, or $0.99 per diluted share, down from $81.8 million, or $1.16 per diluted share, in the prior year[5][6]. - Adjusted EBITDA margin improved to 17.4%, up 50 basis points from 16.9% in the third quarter of 2024, with adjusted EBITDA of $201.7 million[3][7]. - Free cash flow for the quarter was $163.8 million, a significant increase of 85.7% from $88.2 million in the same period last year[8][6]. - Net income for Q3 2025 was $74.3 million, a decrease of 15.0% compared to $87.6 million in Q3 2024[26]. - Adjusted net income attributable to The Timken Company for Q3 2025 was $96.2 million, representing an increase of 10.6% from $87.0 million in Q3 2024[28]. - Adjusted diluted earnings per share (EPS) for Q3 2025 was $1.37, compared to $1.23 in Q3 2024, reflecting an increase of 11.4%[28]. - Consolidated EBITDA for the three months ended September 30, 2025, was $191.0 million, accounting for 16.5% of net sales, down from $195.2 million (17.3%) in 2024[32]. - Adjusted EBITDA for the three months ended September 30, 2025, was $201.7 million, or 17.4% of net sales, compared to $190.0 million (16.9%) in 2024[32]. Segment Performance - Engineered Bearings segment sales reached $765.8 million, up 3.4% year-over-year, driven by higher renewable energy demand and pricing[9]. - Industrial Motion segment sales were $391.3 million, reflecting a 1.3% increase, supported by the CGI acquisition and favorable pricing[11]. - Engineered Bearings segment net sales increased to $765.8 million in Q3 2025, up from $740.7 million in Q3 2024, while Industrial Motion segment net sales rose to $391.3 million from $386.1 million[23]. Guidance and Forecast - Timken updated its full-year 2025 EPS guidance to a range of $3.90 to $4.00, with adjusted EPS expected between $5.20 and $5.30[6][13]. - The company anticipates a slight revenue decline of approximately 0.75% for 2025, an improvement from previous forecasts[13]. - Forecasted full year GAAP diluted earnings per share for 2025 is between $3.90 and $4.00, with adjusted diluted earnings per share expected to be between $5.20 and $5.30[43]. Cash Flow and Investments - The company reported net cash provided by operating activities of $201.1 million for the three months ended September 30, 2025, compared to $123.2 million in 2024[36]. - Total cash used in investing activities was $45.5 million in Q3 2025, a significant decrease from $190.6 million in Q3 2024[26]. - Capital expenditures for Q3 2025 were $37.3 million, slightly higher than $35.0 million in Q3 2024[26]. - The company reported a net cash increase of $30.7 million in Q3 2025, contrasting with a decrease of $57.6 million in Q3 2024[26]. Balance Sheet and Financial Position - Total assets increased to $6,801.9 million as of September 30, 2025, compared to $6,411.0 million at the same time in 2024[25]. - Total liabilities rose to $3,505.1 million in Q3 2025, up from $3,426.9 million in Q3 2024, indicating a growth in financial obligations[25]. - Long-term debt stood at $2,091.4 million as of September 30, 2025, compared to $2,049.7 million in the previous year, indicating an increase in leverage[25]. - Total debt as of September 30, 2025, was $2,112.8 million, with net debt at $1,663.7 million, resulting in a net debt to capital ratio of 33.5%[34]. - The cash and cash equivalents balance was $449.1 million as of September 30, 2025, compared to $373.2 million in the previous year, showing improved liquidity[25]. - Inventories increased to $1,225.9 million in Q3 2025 from $1,195.6 million in Q3 2024, suggesting a buildup of stock[25]. Cost Management - The company reported unallocated corporate expenses of $(17.0) million in Q3 2025, down from $(22.6) million in Q3 2024, reflecting improved cost management[23]. - The company experienced a net loss of $55.8 million related to long-term debt payments in Q3 2025, compared to a net gain of $1.1 million in Q3 2024[26]. - The company is focused on leveraging its differentiated solutions to enhance margins and drive growth in profitable verticals[4].