The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Timken beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share dropped significantly.
Margins contracted across the board.
Timken reported revenue of $1.08 billion. The seven analysts polled by S&P Capital IQ expected a top line of $1.06 billion on the same basis. GAAP reported sales were 15% lower than the prior-year quarter's $1.26 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 $0.80. The 10 earnings estimates compiled by S&P Capital IQ averaged $0.62 per share. GAAP EPS of $0.78 for Q4 were 30% lower than the prior-year quarter's $1.11 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 25.8%, 210 basis points worse than the prior-year quarter. Operating margin was 10.6%, 410 basis points worse than the prior-year quarter. Net margin was 7.0%, 160 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.19 billion. On the bottom line, the average EPS estimate is $0.83.
Next year's average estimate for revenue is $4.97 billion. The average EPS estimate is $4.30.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 215 members out of 228 rating the stock outperform, and 13 members rating it underperform. Among 77 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 74 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 outperform, with an average price target of $52.00.
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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. TMFDisclosureHere