Timken Beats Q1 Street Expectation; Lowers FY22 Revenue Guidance

Timken Co TKR reported first-quarter FY22 sales growth of 9.7% year-over-year to $1.124 billion, beating the consensus of $1.11 billion.
The increase was driven by growth across most end-market sectors led by industrial distribution and off-highway, and the impact of higher pricing, partially offset by unfavorable currency.
Sales by segment: Process Industries $584.2 million (+12.2% Y/Y) and Mobile Industries $540.54 million (+7.1% Y/Y).
Timken returned $123.5 million to shareholders during the quarter with the repurchase of 1.5 million shares and quarterly dividend payment.
The gross margin was down slightly by 7 bps at 29.1%.
The operating income increased by 14.3% Y/Y to $172.3 million, and the margin expanded by 62 bps to 15.3%.
Adjusted EPS improved to $1.61 compared to $1.38 in 1Q21, beating the consensus of $1.16.
Timken's net cash used from operating activities for the quarter was $1.2 million, compared to cash generated of $31.7 million a year ago.
FY22 Outlook: Timken maintained its EPS outlook of $4.85 - $5.25 on a GAAP basis and adjusted EPS of $5.00 - $5.40.
The company modestly adjusted the revenue outlook now expects it to be up ~8% Y/Y at the midpoint in total vs. prior expectations of up ~10%.
Price Action: TKR shares are trading higher by 3.33% at $59.56 on Monday's last check.

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