The Timken Company (TKR, Financial) filed Quarterly Report for the period ended 2009-09-30.
Timken Company's activities are divided into two principal segments. The first is anti-friction bearings and the other is steel. Timken is a leading international manufacturer of highly engineered bearings, alloy and specialty steels and components, as well as related products and services. The company also produces custom-made steel products including precision steel components for automotive and industrial customers. The Timken Company has a market cap of $2.28 billion; its shares were traded at around $23.54 with a P/E ratio of 2354 and P/S ratio of 0.4. The dividend yield of The Timken Company stocks is 1.53%. The Timken Company had an annual average earning growth of 2% over the past 10 years.
Net sales for the third quarter of 2009 decreased $572.8 million, or 42.9%, compared to the third quarter of 2008, primarily due to lower volume of approximately $420 million across all business segments, lower surcharges in the Steel segment of approximately $215 million and the effect of foreign currency exchange rate changes of approximately $15 million, partially offset by improved pricing and favorable sales mix of approximately $55 million.
Net sales for the first nine months of 2009 decreased $1.58 billion, or 40.0%, compared to the first nine months of 2008, primarily due to lower volume of approximately $1.2 billion across all business segments, except for the Aerospace and Defense segment, lower surcharges in the Steel segment of approximately $475 million and the effect of foreign currency exchange rate changes of approximately $145 million. These decreases were partially offset by improved pricing and favorable sales mix of approximately $180 million.
Gross profit decreased in the third quarter of 2009, compared to the third quarter of 2008, due to the impact of lower sales volume across most market sectors of approximately $190 million, lower surcharges in the Steel segment of $215 million and higher manufacturing costs of approximately $50 million, partially offset by lower raw material costs of approximately $195 million, improved pricing and sales mix of approximately $20 million and lower logistics costs of approximately $30 million. The higher manufacturing costs were primarily driven by the Mobile Industries and Steel segments as a result of the underutilization of plant capacity. The lower raw material costs are primarily due to lower scrap steel costs as scrap steel and other raw material costs have fallen in 2009 from historically high levels in 2008.
Gross profit decreased in the first nine months of 2009, compared to the first nine months of 2008, due to the impact of lower sales volume across most market sectors of approximately $445 million, lower surcharges in the Steel segment of $475 million and higher manufacturing costs of approximately $250 million, partially offset by lower raw material costs of approximately $400 million, improved pricing and sales mix of approximately $145 million and lower logistics costs of approximately $85 million.
The decrease in selling, administrative and general expenses in the third quarter of 2009, compared to the third quarter of 2008, was primarily due to restructuring initiatives and lower discretionary spending on items such as travel and professional fees of approximately $45 million and lower performance-based compensation of approximately $20 million. The decrease in selling, administrative and general expenses in the first nine months of 2009, compared to the first nine months of 2008, was primarily due to restructuring initiatives and lower discretionary spending on items such as travel and professional fees of approximately $100 million, lower performance-based compensation of approximately $40 million and lower bad debt expense of approximately $15 million.
Read the The complete ReportTKR is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., John Keeley of Keeley Fund Management, NWQ Managers of NWQ Investment Management Co.
Timken Company's activities are divided into two principal segments. The first is anti-friction bearings and the other is steel. Timken is a leading international manufacturer of highly engineered bearings, alloy and specialty steels and components, as well as related products and services. The company also produces custom-made steel products including precision steel components for automotive and industrial customers. The Timken Company has a market cap of $2.28 billion; its shares were traded at around $23.54 with a P/E ratio of 2354 and P/S ratio of 0.4. The dividend yield of The Timken Company stocks is 1.53%. The Timken Company had an annual average earning growth of 2% over the past 10 years.
Highlight of Business Operations:
In addition to specific segment initiatives, the Company has been making strategic investments in business processes and systems. Project O.N.E. is a multi-year program, which began in 2005, designed to improve the Companys business processes and systems. The Company expects to invest approximately $210 million to $220 million, which includes internal and external costs, to implement Project O.N.E. As of September 30, 2009, the Company has incurred costs of approximately $209.1 million, of which approximately $118.8 million have been capitalized to the Consolidated Balance Sheet. During 2008 and 2007, the Company completed the installation of Project O.N.E. for the majority of the Companys domestic operations and a major portion of its European operations. On April 1, 2009, the Company completed the next installation of Project O.N.E. for the majority of the Companys remaining European operations, as well as certain other facilities in North America and India. With the completion of the April 2009 installation of Project O.N.E., approximately 80% of the Bearings and Power Transmission Groups global sales flow through the new system. The next installation of Project O.N.E. is expected to be completed in April 2010.Net sales for the third quarter of 2009 decreased $572.8 million, or 42.9%, compared to the third quarter of 2008, primarily due to lower volume of approximately $420 million across all business segments, lower surcharges in the Steel segment of approximately $215 million and the effect of foreign currency exchange rate changes of approximately $15 million, partially offset by improved pricing and favorable sales mix of approximately $55 million.
Net sales for the first nine months of 2009 decreased $1.58 billion, or 40.0%, compared to the first nine months of 2008, primarily due to lower volume of approximately $1.2 billion across all business segments, except for the Aerospace and Defense segment, lower surcharges in the Steel segment of approximately $475 million and the effect of foreign currency exchange rate changes of approximately $145 million. These decreases were partially offset by improved pricing and favorable sales mix of approximately $180 million.
Gross profit decreased in the third quarter of 2009, compared to the third quarter of 2008, due to the impact of lower sales volume across most market sectors of approximately $190 million, lower surcharges in the Steel segment of $215 million and higher manufacturing costs of approximately $50 million, partially offset by lower raw material costs of approximately $195 million, improved pricing and sales mix of approximately $20 million and lower logistics costs of approximately $30 million. The higher manufacturing costs were primarily driven by the Mobile Industries and Steel segments as a result of the underutilization of plant capacity. The lower raw material costs are primarily due to lower scrap steel costs as scrap steel and other raw material costs have fallen in 2009 from historically high levels in 2008.
Gross profit decreased in the first nine months of 2009, compared to the first nine months of 2008, due to the impact of lower sales volume across most market sectors of approximately $445 million, lower surcharges in the Steel segment of $475 million and higher manufacturing costs of approximately $250 million, partially offset by lower raw material costs of approximately $400 million, improved pricing and sales mix of approximately $145 million and lower logistics costs of approximately $85 million.
The decrease in selling, administrative and general expenses in the third quarter of 2009, compared to the third quarter of 2008, was primarily due to restructuring initiatives and lower discretionary spending on items such as travel and professional fees of approximately $45 million and lower performance-based compensation of approximately $20 million. The decrease in selling, administrative and general expenses in the first nine months of 2009, compared to the first nine months of 2008, was primarily due to restructuring initiatives and lower discretionary spending on items such as travel and professional fees of approximately $100 million, lower performance-based compensation of approximately $40 million and lower bad debt expense of approximately $15 million.
Read the The complete ReportTKR is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., John Keeley of Keeley Fund Management, NWQ Managers of NWQ Investment Management Co.
