TimkenSteel (TMST) Posts Smaller-than-Expected Q1 Loss; Sees Q1 Shipments Flat Q/Q

TimkenSteel (NYSE: TMST) reported Q1 EPS of ($0.31), $0.14 better than the analyst estimate of ($0.45). Revenue for the quarter came in at $217.9 million versus the consensus estimate of $214.87 million.

EBITDA for the quarter was a loss of $1.6 million, a sequential improvement of $16 million and better than original first-quarter expectations.

"Our employees helped us achieve better-than-expected results in the quarter. They continue to reduce costs and capture new sales," said Tim Timken, chairman, CEO and president. "Our performance also benefited from conditions in several of our markets, with industrial showing positive movement and automotive demand remaining strong. We continue to face a challenging year, though, with energy markets still weak and imports pressuring price in spot markets. Everyone at TimkenSteel remains focused on the priorities that enable us to compete in this environment and emerge a stronger company."

OUTLOOK

Second-Quarter 2016 Revenue

• Shipments are expected to be similar to first-quarter 2016 with an improved mix.
  • Automotive demand should remain strong.
  • Continued pressure on oil and gas shipments is expected due to low levels of energy exploration and production spend.
  • Demand in industrial supply chains should be higher due to tapering of inventory destocking.

Second-Quarter 2016 EBITDA

• EBITDA projected to be between a loss of $5 million and income of $5 million.
• Raw material spread expected to be favorable versus first-quarter 2016 due to stabilizing scrap markets.
• Manufacturing expected to continue to be positively impacted by cost reduction efforts.
  • Melt utilization expected to remain slightly below 50 percent.
• Imports and weak market dynamics to continue to pressure pricing.

Other Guidance

2016 capital spending planned to be $45 million.

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

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