The 10-second takeaway
For the quarter ended March 31 (Q1), Timken beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue improved and GAAP earnings per share increased significantly.
Margins expanded across the board.
Timken booked revenue of $1.42 billion. The seven analysts polled by S&P Capital IQ expected sales of $1.37 billion on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $1.25 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.58. The five earnings estimates compiled by S&P Capital IQ averaged $1.26 per share. GAAP EPS of $1.58 for Q1 were 40% higher than the prior-year quarter's $1.13 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 29.0%, 240 basis points better than the prior-year quarter. Operating margin was 17.4%, 280 basis points better than the prior-year quarter. Net margin was 11.0%, 200 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.45 billion. On the bottom line, the average EPS estimate is $1.40.
Next year's average estimate for revenue is $5.60 billion. The average EPS estimate is $5.20.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 193 members out of 207 rating the stock outperform, and 14 members rating it underperform. Among 69 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 66 give Timken a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Timken is buy, with an average price target of $62.40.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.