- Timken (TKR, Financial) reports a 4.2% decline in Q1 2025 sales to $1.14 billion.
- Adjusted EPS decreased 20.9% YoY to $1.40, with net income at $78.3 million.
- The company has updated its 2025 forecast, citing tariff impacts, and aims to save $75 million annually through cost reductions.
In the first quarter of 2025, The Timken Company (TKR) recorded sales of $1.14 billion, marking a 4.2% decrease from the previous year. The decline was primarily driven by lower demand in both major business segments and adverse currency exchanges, which offset gains from acquisitions. This resulted in a 3.1% drop in organic sales.
The company's net income for Q1 2025 was $78.3 million, translating to a diluted earnings per share (EPS) of $1.11, down from $1.46 in the same period last year. The adjusted EPS also saw a downturn, falling 20.9% to $1.40, from the previous year's $1.77.
Timken's profitability metrics exhibited a downturn, with the net income margin decreasing to 6.9% from 8.7% and the adjusted EBITDA margin decreasing to 18.2% from 20.7% year-over-year. Both the Engineered Bearings segment and the Industrial Motion segment saw a reduction in adjusted EBITDA margins, reporting 20.9% and 17.7% respectively, down from 22.6% and 21.2% last year.
Despite these challenges, Timken improved its free cash flow to $23.4 million and returned $48.2 million to shareholders through dividends and share buybacks during the quarter. The company upheld its policy of quarterly dividends, marking the 411th consecutive dividend payment, and repurchased approximately 300,000 shares.
Looking ahead, Timken has adjusted its 2025 financial outlook due to anticipated tariff impacts, now expecting full-year EPS to range between $3.90 and $4.40, and adjusted EPS between $5.10 and $5.60. The company projects a revenue change of -2.5% to 0% compared to 2024. Additionally, Timken has set a cost reduction target, aiming for gross savings of approximately $75 million by year's end to counteract these impacts.
