The 10-second takeaway
For the quarter ended June 30 (Q2), Timken missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly. Non-GAAP earnings per share contracted significantly. GAAP earnings per share contracted significantly.
Margins shrank across the board.
Timken notched revenue of $1.13 billion. The seven analysts polled by S&P Capital IQ predicted revenue of $1.19 billion on the same basis. GAAP reported sales were 16% lower than the prior-year quarter's $1.34 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 $0.93. The nine earnings estimates compiled by S&P Capital IQ forecast $0.97 per share. Non-GAAP EPS of $0.93 for Q2 were 31% lower than the prior-year quarter's $1.34 per share. GAAP EPS of $0.86 for Q2 were 54% lower than the prior-year quarter's $1.86 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 26.8%, 130 basis points worse than the prior-year quarter. Operating margin was 12.6%, 340 basis points worse than the prior-year quarter. Net margin was 7.4%, 630 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.21 billion. On the bottom line, the average EPS estimate is $1.10.
Next year's average estimate for revenue is $4.69 billion. The average EPS estimate is $3.99.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 211 members out of 224 rating the stock outperform, and 13 members rating it underperform. Among 84 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 81 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 $63.50.
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