TimkenSteel ended 2018 with a loss on increased sales, but the loss was smaller than in 2017. Investors responding by driving the company's stock price higher.
CANTON Operational improvements made during 2018 are expected to help TimkenSteel Corp. see improved results during the coming year.
"In many ways 2018 was a great year for TimkenSteel," Tim Timken, chairman, chief executive officer and president, told stock market analysts during a telephone conference call Thursday morning.
During the year TimkenSteel focused on continuous improvement programs, Timken said. "We're prepared to carry that momentum into an even better 2019."
TimkenSteel ended 2018 with higher sales, but the company still reported a loss.
The year-end loss came in at $31.7 million, or 71 cents per share, compared with the 2017 loss of $43.8 million, or 99 cents per share. Net sales topped $1.61 billion, a 21.1-percent gain compared with sales just under $1.33 billion the previous year.
The fourth quarter loss was $39.6 million, or 89 cents per share, compared with the 2017 fourth quarter loss of $33.9 million, or 76 cent per share. Fourth quarter sales improved 19 percent to $406.4 million from $341.4 million a year ago.
The results, released after the market closed on Wednesday, sparked heavy trading in TimkenSteel stock on Thursday.
Wednesday the company's stock closed at $12.34, down 7 cents per share with more than 893,000 shares exchanged. That's nearly three times the daily average trading volume. Thursday morning the stock price climbed quickly and was trading at a price above $14 per share.
TimkenSteel stock closed at $13.72 on Thursday, gaining $1.38 per share. Investors traded more than 970,000 shares.
During the conference call, Timken told analysts that 2018 marked the third straight year the company's earnings have continued on an upward trajectory. Factors in the improvements are favorable market conditions, sharpened customer service and better pricing. The company also has enriched its product mix and is focusing on key products. Tariffs imposed last year have helped TimkenSteel in the bar market, Timken said.
During the coming year, TimkenSteel expects to see improvements in the mining, rail and agriculture end markets, as well as in the distribution channel. The North American light vehicle market appears stable and looks positive, while machinery, oil and gas drilling and oil country tubular goods markets have shown some softening.
The first quarter of 2019 will see shipments come in about 30,000 tons less than the 294,500 tons shipped during the fourth quarter. TimkenSteel has planned production downtime in order to balance inventory. Based on customer demand, the company has scheduled temporary one-week layoffs in some departments.
The first quarter could end with a loss of $4 million or a profit of $6 million, TimkenSteel projected. Meanwhile, the full year should benefit from improved pricing and a better product mix.
In a news release about the year-end results, Timken stated: "Our performance was a culmination of the hard work by our entire team throughout 2018, during which we set several manufacturing and operational records, increased on-time delivery to over 90 percent by year-end, and achieved our safest year on record."
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