The Timken Company (TKR, Financial) filed Quarterly Report for the period ended 2012-09-30.
Timken Company has a market cap of $3.75 billion; its shares were traded at around $38.54 with a P/E ratio of 7.8 and P/S ratio of 0.7. The dividend yield of Timken Company stocks is 2.4%. Timken Company had an annual average earning growth of 4.9% over the past 10 years.
The Mobile Industries segment's net sales, excluding the effects of acquisitions and currency-rate changes, decreased 3.8% in the first nine months of 2012 compared to the first nine months of 2011. The decrease is primarily due to lower volume of approximately $65 million, partially offset by higher surcharges and pricing of approximately $20 million. The lower volume was led by a decrease in light vehicle volume of approximately 20%, driven by exited business, and a decrease in heavy truck volume of approximately 20%, partially offset by an increase in rail volume of approximately 25% and an increase in off-highway volume of approximately 5%. EBIT was lower in the first nine months of 2012 compared to the first nine months of 2011 primarily due to the impact of lower volume of approximately $25 million, higher restructuring charges related to the closure of the St. Thomas plant of approximately $25 million, higher manufacturing costs of approximately $10 million, as a result of lower plant utilization, and higher raw material costs of approximately $10 million, partially offset by higher surcharges and pricing of approximately $20 million and lower logistics costs of approximately $10 million. Prior-year acquisitions also had a favorable impact on EBIT for the first nine months of 2012.
The Process Industries segment's net sales, excluding the effects of acquisitions and currency-rate changes, increased 0.9% in the first nine months of 2012 compared to the same period in 2011. The increase was primarily due to the impact of pricing of approximately $20 million, partially offset by lower volume of $10 million. The lower volume was led by a decrease in industrial distributors of approximately 10%. EBIT was higher in the first nine months of 2012 compared to the first nine months of 2011 primarily due to the impact of pricing of approximately $20 million and acquisitions of approximately $15 million, partially offset by the effects of lower manufacturing utilization of $25 million, lower volume of $5 million and higher selling, general and administrative expenses of approximately $5 million.
The Steel segment's net sales for the third quarter of 2012, excluding the effects of currency-rate changes, decreased 24.8% compared to the third quarter of 2011. The decrease was primarily due to lower volume of approximately $85 million and lower surcharges of approximately $70 million, partially offset by favorable pricing of approximately $30 million. The lower volume was led by a decrease in oil and gas demand of approximately 40% and a decrease in industrial demand of approximately 35%. Surcharges decreased to $79 million in the third quarter of 2012 from $149 million in the third quarter of 2011. The lower surcharges were a result of lower market prices for certain input raw materials, especially scrap steel, nickel and molybdenum, and lower volume. Surcharges are a pricing mechanism that the Company uses to recover scrap steel, energy and certain alloy costs, which are derived from published monthly indices. The average scrap index for the third quarter of 2012 was $380 per ton, compared to $514 per ton for the third quarter of 2011. Steel shipments for the third quarter of 2012 were approximately 243,000 tons, compared to approximately 320,000 tons for the third quarter of 2011, a decrease of 24%. The Steel segment's average selling price, including surcharges, was $1,552 per ton for the third quarter of 2012, compared to an average selling price of $1,565 per ton in the third quarter of 2011.
The Steel segment's net sales for the first nine months of 2012, excluding the effects of currency-rate changes, decreased 5.0% compared to the first nine months of 2011. The decrease was primarily due to lower volume of approximately $125 million and lower surcharges of approximately $95 million, partially offset by higher pricing and favorable sales mix of approximately $145 million. The lower volume was led by a decrease in industrial demand of approximately 20% and a decrease in mobile demand of approximately 10%. Surcharges decreased to $346 million in the first nine months of 2012 from $440 million in the first nine months of 2011. The lower surcharges were a result of lower market prices for certain input raw materials, especially scrap steel, nickel and molybdenum and lower volume. The average scrap index for the first nine months of 2012 was $435 per ton, compared to $500 per ton for the first nine months of 2011. Steel shipments for the first nine months of 2012 were approximately 862,000 tons, compared to approximately 984,000 tons in the first nine months of 2011, a decrease of 12%. The Steel segment's average selling price, including surcharges, was $1,638 per ton for the first nine months of 2012, compared to an average selling price of $1,513 per ton in the first nine months of 2011. The increase in the average selling prices was primarily the result of higher pricing and favorable sales mix.
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Timken Company has a market cap of $3.75 billion; its shares were traded at around $38.54 with a P/E ratio of 7.8 and P/S ratio of 0.7. The dividend yield of Timken Company stocks is 2.4%. Timken Company had an annual average earning growth of 4.9% over the past 10 years.
Highlight of Business Operations:
The Mobile Industries segment's net sales, excluding the effects of acquisitions and currency-rate changes, decreased 11.2% in the third quarter of 2012 compared to the third quarter of 2011. The decrease is primarily due to lower volume of approximately $55 million, partially offset by higher pricing of approximately $5 million. The lower volume was led by a decrease in light vehicle volume of approximately 25%, driven by exited business, and a decrease in heavy truck volume of approximately 30%, partially offset by an increase in rail volume of approximately 10%. EBIT was lower in the third quarter of 2012 compared to the third quarter of 2011 primarily due to the impact of lower volume of approximately $20 million, higher manufacturing costs of approximately $10 million and higher restructuring charges of approximately $5 million, partially offset by lower logistic costs of approximately $5 million. The higher manufacturing costs were the result of lower plant utilization, and the higher restructuring charges were driven by expenses related to the announced closure of the St. Thomas manufacturing plant.The Mobile Industries segment's net sales, excluding the effects of acquisitions and currency-rate changes, decreased 3.8% in the first nine months of 2012 compared to the first nine months of 2011. The decrease is primarily due to lower volume of approximately $65 million, partially offset by higher surcharges and pricing of approximately $20 million. The lower volume was led by a decrease in light vehicle volume of approximately 20%, driven by exited business, and a decrease in heavy truck volume of approximately 20%, partially offset by an increase in rail volume of approximately 25% and an increase in off-highway volume of approximately 5%. EBIT was lower in the first nine months of 2012 compared to the first nine months of 2011 primarily due to the impact of lower volume of approximately $25 million, higher restructuring charges related to the closure of the St. Thomas plant of approximately $25 million, higher manufacturing costs of approximately $10 million, as a result of lower plant utilization, and higher raw material costs of approximately $10 million, partially offset by higher surcharges and pricing of approximately $20 million and lower logistics costs of approximately $10 million. Prior-year acquisitions also had a favorable impact on EBIT for the first nine months of 2012.
The Process Industries segment's net sales, excluding the effects of acquisitions and currency-rate changes, increased 0.9% in the first nine months of 2012 compared to the same period in 2011. The increase was primarily due to the impact of pricing of approximately $20 million, partially offset by lower volume of $10 million. The lower volume was led by a decrease in industrial distributors of approximately 10%. EBIT was higher in the first nine months of 2012 compared to the first nine months of 2011 primarily due to the impact of pricing of approximately $20 million and acquisitions of approximately $15 million, partially offset by the effects of lower manufacturing utilization of $25 million, lower volume of $5 million and higher selling, general and administrative expenses of approximately $5 million.
The Steel segment's net sales for the third quarter of 2012, excluding the effects of currency-rate changes, decreased 24.8% compared to the third quarter of 2011. The decrease was primarily due to lower volume of approximately $85 million and lower surcharges of approximately $70 million, partially offset by favorable pricing of approximately $30 million. The lower volume was led by a decrease in oil and gas demand of approximately 40% and a decrease in industrial demand of approximately 35%. Surcharges decreased to $79 million in the third quarter of 2012 from $149 million in the third quarter of 2011. The lower surcharges were a result of lower market prices for certain input raw materials, especially scrap steel, nickel and molybdenum, and lower volume. Surcharges are a pricing mechanism that the Company uses to recover scrap steel, energy and certain alloy costs, which are derived from published monthly indices. The average scrap index for the third quarter of 2012 was $380 per ton, compared to $514 per ton for the third quarter of 2011. Steel shipments for the third quarter of 2012 were approximately 243,000 tons, compared to approximately 320,000 tons for the third quarter of 2011, a decrease of 24%. The Steel segment's average selling price, including surcharges, was $1,552 per ton for the third quarter of 2012, compared to an average selling price of $1,565 per ton in the third quarter of 2011.
The Steel segment's net sales for the first nine months of 2012, excluding the effects of currency-rate changes, decreased 5.0% compared to the first nine months of 2011. The decrease was primarily due to lower volume of approximately $125 million and lower surcharges of approximately $95 million, partially offset by higher pricing and favorable sales mix of approximately $145 million. The lower volume was led by a decrease in industrial demand of approximately 20% and a decrease in mobile demand of approximately 10%. Surcharges decreased to $346 million in the first nine months of 2012 from $440 million in the first nine months of 2011. The lower surcharges were a result of lower market prices for certain input raw materials, especially scrap steel, nickel and molybdenum and lower volume. The average scrap index for the first nine months of 2012 was $435 per ton, compared to $500 per ton for the first nine months of 2011. Steel shipments for the first nine months of 2012 were approximately 862,000 tons, compared to approximately 984,000 tons in the first nine months of 2011, a decrease of 12%. The Steel segment's average selling price, including surcharges, was $1,638 per ton for the first nine months of 2012, compared to an average selling price of $1,513 per ton in the first nine months of 2011. The increase in the average selling prices was primarily the result of higher pricing and favorable sales mix.
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