Timken (TKR) Misses Q4 EPS by 12c, Revenues Beat; Offers FY20 EPS Guidance Below Consensus

Timken (NYSE: TKR) reported Q4 EPS of $0.84, $0.12 worse than the analyst estimate of $0.96. Revenue for the quarter came in at $896.2 million versus the consensus estimate of $885.42 million.

"Fourth quarter revenue was in line with our expectations and cash flow finished the year strong. While profitability fell short, a significant portion of this related to some higher than normal operating expenses in the quarter that are not expected to persist," said Richard G. Kyle, Timken president and chief executive officer. "In 2019, Timken delivered record earnings per share, operating margin expansion and solid revenue gains in sectors like renewable energy, aerospace and rail. Our strong financial performance in a relatively soft industrial market environment demonstrates the successful execution of our strategy. Our performance in 2019 underscores the enduring strength of our portfolio and reflects a stronger, more diverse Timken Company."

GUIDANCE:

Timken sees FY2020 EPS of $4.25-$4.65, versus the consensus of $4.66.

The company expects 2020 revenue to be in the range of down 2 percent to up 2 percent, or roughly flat at the midpoint, versus 2019. This includes the benefit of acquisitions made during 2019, offset by expected organic declines in Mobile Industries and the impact of currency.

Timken anticipates 2020 earnings per diluted share to range from $4.00 to $4.40 for the full year on a GAAP basis. Excluding special items detailed in the attached tables, the company expects 2020 adjusted earnings per diluted share ranging from $4.25 to $4.65. Timken plans to generate net cash from operations of approximately $585 million and free cash flow of $425 million at the midpoint in 2020.

"We plan to deliver another strong year of cash generation and solid earnings performance in 2020 against a soft industrial economic backdrop," said Kyle. "We expect profitability to improve meaningfully from fourth-quarter levels, and we remain focused on driving outgrowth, integrating recent acquisitions and advancing our operational excellence initiatives. With our proven strategy and track record, we are confident in our ability to achieve our new five-year targets and deliver attractive shareholder returns for years to come."

For earnings history and earnings-related data on Timken (TKR) click here.

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