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Timken Slashes 2009 Earnings Guidance

The Associated Press

CANTON, Ohio (AP) — Bearing maker Timken Co. slashed its 2009 guidance Monday after reporting its first-quarter profit plummeted 99 percent, saying it expects nearly all its markets to contract this year.

Timken said it now expects an adjusted full-year loss of 15 cents per share to a profit of 15 cents per share, compared with a prior forecast of a profit of $1.30 per share to $1.60 per share.

Analysts surveyed by Thomson Reuters expect earnings of 78 cents per share.

In a conference call with investor analysts Monday, the company said customers pulled back on orders, leaving Timken with a large backlog.

Timken said it now expects revenue to be less than $4 billion this year, which implies a revenue drop of at least 30 percent from the $5.66 billion booked in 2008.

The company said it expects sales in the steel group business to fall by 55 percent to 65 percent due to lower surcharges and demand. And it expects significant declines from heavy-truck manufacturing and process industries sales.

However, sales in the aerospace and defense business are expected to rise about 5 percent to 10 percent for 2009 due to strong demand.

The Canton, Ohio, company said Monday first-quarter net income plunged to $870,000, or a penny per share, from $84.5 million, or 88 cents per share in the year-ago quarter. Excluding special items, net income totaled $7.1 million, or 7 cents per share.

Revenue fell 33 percent to $960.4 million from $1.43 billion in the same quarter in 2008.

Analysts surveyed by Thomson Reuters expected a loss of 2 cents per share, on revenue of $1.08 billion.

The company also cut its quarterly dividend in half to 9 cents per share.

Shares shed $2.39, or 14.2 percent, to $14.46 in afternoon trading, after falling as much as 25.6 percent earlier in the day.