TimkenSteel (TMST) Tops Q3 EPS by 10c; Announces Cost-Cutting Measures

TimkenSteel (NYSE: TMST) reported Q3 EPS of ($0.69), $0.10 better than the analyst estimate of ($0.79). Revenue for the quarter came in at $232.7 million versus the consensus estimate of $253.39 million.

"The continuing impact from weak global commodity markets hit us harder in the third quarter than originally estimated. We are staying very close to our customers, which has helped us hold market share across all of our segments," said Tim Timken, chairman, CEO and president. "With no sign of near-term recovery, we initiated another round of cost reductions, which will generate about $50 million in savings for the company next year. These actions are in addition to the $25 million of annualized savings from reductions in the second quarter, which are already having a positive impact on our operating results. We'll continue to do what it takes to preserve shareholder value and generate cash as we work through this cycle, and we will emerge stronger when markets rebound."

The company's additional $50 million in cost reductions include the following.

• Management and other salaried staffing are being reduced by 8 percent. As part of the reduction, the company is consolidating customer-facing activities under the leadership of Shawn Seanor, newly named executive vice president of sales and business development. Bob Keeler, executive vice president of mobile and industrial, has announced his intention to retire by year's end.
• Manufacturing process cost savings comprise a range of actions, including delaying the ramp-up of its advanced quench-and-temper facility to align with market demand.
• Spending reductions across the company make up the balance of the additional savings.

In addition to cutting costs, TimkenSteel sales engineers are generating new business, maintaining the company's historical pace of new product development and leveraging recent investments that have expanded its capabilities.

For earnings history and earnings-related data on TimkenSteel (TMST) click here.

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