TimkenSteel (TMST) Misses Q3 EPS by 14c, Revenues Beat

TimkenSteel (NYSE: TMST) reported Q3 EPS of ($0.38), $0.14 worse than the analyst estimate of ($0.24). Revenue for the quarter came in at $205.9 million versus the consensus estimate of $204.7 million.

"We continued to make progress on important initiatives during the quarter as our customers began to recover from the impact of the COVID-19 pandemic. Our focus on cash generation resulted in $41.1 million of operating cash flow in the third quarter of 2020 and $121.0 million for the first nine months of 2020. This represents our sixth consecutive quarter of positive operating cash flow. In addition, we generated positive EBITDA and accelerated cost reduction initiatives across the company while staying focused on our customers as well as on the health and safety of our workforce," said Terry L. Dunlap, interim chief executive officer and president. "During the third quarter, our sales and shipments improved sequentially as a result of the rebounding automotive market; however, we believe demand in other end markets will remain challenged in the near term. At the end of the third quarter, our cash position remained strong and we had sufficient liquidity to meet the needs of our business."

THIRD QUARTER OF 2020 FINANCIAL SUMMARY

• Net sales of $205.9 million increased 34 percent sequentially. The increase was driven primarily by higher automotive demand. On a year-over-year basis, net sales declined 25 percent largely driven by lower industrial and energy demand.
• Ship tons of 154,300 increased 42 percent sequentially as a result of higher automotive shipments, partially offset by lower industrial, energy and OCTG billet shipments. When compared with the prior-year period, ship tons declined 26 percent due to lower industrial, energy and OCTG billet demand.
• Manufacturing costs were higher sequentially as a result of planned annual maintenance shutdown costs during the third quarter.
• SG&A expense was $17.9 million, relatively consistent with the second quarter. On a year-over-year basis, SG&A expense improved by $3.5 million as a result of savings from employee restructuring actions.

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

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