Timken Co. expects another solid year during 2013. While sales are expected to slip, earnings are projected to remain strong.Timken Co. ended 2012 with higher profits despite a slip in sales. The company announced annual and fourth quarter earnings Thursday morning.
CANTON Better pricing and a strong performance by recent acquisitions helped Timken Co. post increased profits during 2012 despite a drop in sales.
Sales slipped during the year by 4 percent to $4.99 billion from $5.17 billion during 2011. But profits came in at $495.5 million, a 9-percent gain compared with $454.3 million the previous year.
Timken posted the strong numbers despite a rough fourth quarter. Earnings for the three months that ended Dec. 31 came in at $75.3 million compared to $109.1 million during the same period in 2011. The earnings drop coincided with lower sales of $1.08 billion, compared to $1.26 billion the previous year.
The drop in sales reflected lower demand from the light vehicle, heavy truck, industrial machinery, and oil and gas industries in the last half 2012, the company said in a statement.
Timken said it benefited from improved pricing, the favorable impact of its Philadelphia Gear and Drives acquisitions and strong sales in the rail and aerospace and defense markets.
James W. Griffith, president and chief executive officer, said the company responded quickly and effectively in 2012 to lower product demand and maintained its focus on driving value for our customers and shareholders. The strong performance by Drives and Philadelphia Gear reinforced the company’s diversification strategy, he said.
“Our strategy of continuing to evolve in key markets and further diversifying our product portfolio with new products and additional repair services enabled us to achieve double-digit operating margins in all four segments, even in the face of lower volumes,” Griffith said.
“The fundamental changes we’ve made to improve the structural performance in our business led to strong operating results and free cash flow generation,” said Griffith, “as well as a strengthened balance sheet. Our strategic plan continues to serve us well in the face of uncertainty in the global economy.”