The Timken Company has reported its financial results for the 2016 third quarter, with sales at $657 million, a 7 percent drop from last year’s third quarter. Excluding a currency impact of 1 percent, sales were down 6 percent. The decrease in sales was primarily due to weakness across most end markets, partially offset by the net benefit of acquisitions and divestitures.
For the 2016 third quarter, net income was $20.6 million or $0.26 per diluted share compared to a net income of $63.4 million or $0.75 per diluted share last year. The decrease in net income was driven by a large tax benefit in the year-ago period, lower volume, unfavorable price/mix and higher pension settlement and restructuring charges, partially offset by lower material, manufacturing and SG&A costs.
Adjusted net income was $38.9 million or $0.49 per diluted share, which excluded expense attributable to pension settlements, impairment and restructuring, and a large tax benefit. This compares with $46.7 million or $0.55 per diluted share for the 2015 third quarter.
"We performed well again this quarter, demonstrating our ability to navigate a challenging market environment," said Richard G. Kyle, Timken president and CEO. "While most industrial sectors remain weak, our earnings are on track for the year and we continue to focus on organic outgrowth initiatives, operational excellence and deploying capital to create shareholder value."
Mobile Industries sales were $353 million, an 11 percent decline compared with the third quarter last year. Excluding unfavorable currency of 1 percent, sales were down 10 percent, as the net benefit of acquisitions was more than offset by declines across most end markets.
Earnings before interest and taxes (EBIT) in the quarter for Mobile Industries were $24.1 million or 6.8 percent of sales, compared with EBIT of $43 million or 10.8 percent of sales for the same period a year ago. The decrease in EBIT reflects lower volume, unfavorable price/mix, and higher impairment and restructuring costs partially offset by favorable material and manufacturing costs and lower SG&A expenses.
The company has adjusted its outlook for 2016 with revenue to be down approximately 7 to 8 percent, including an estimated unfavorable currency impact of 1.5 percent. Mobile Industries’ sales are expected to be down approximately 8 percent, including an unfavorable currency impact of 1.5 percent. The remaining decline reflects lower demand in rail, off-highway, aerospace and heavy truck, partially offset by growth in automotive and the net benefit of acquisitions.
Earnings per diluted share for the company in 2016 are expected to range from $1.77 to $1.83 for the full year on a GAAP basis. The company expects 2016 adjusted earnings per diluted share to range from $1.92 to $1.98.