Canton, Ohio-based The Timken Company reported Thursday that sales in Q4 2012 of $1.1 billion were down 15 percent from the same period in 2011 due to lower demand in the company's light vehicle, heavy truck, mining and energy-related end market sectors, as well as lower surcharges.
For Q4, the company generated net income of $75.3 million. That compares with $109.1 million earned in the same period last year.
The decline stemmed from lower Mobile Industries and Steel segment sales: Mobile Industries' 2012 sales were $1.7 billion, down 5 percent from $1.8 billion a year ago. Sales for Steel, including inter-segment sales, were $1.7 billion in 2012, down 12 percent from $2 billion last year. The results reflect reduced shipments to the industrial and oil and gas market sectors and lower raw-material surcharges of approximately $165 million, partially offset by favorable pricing.
Meanwhile, sales for the Process Industries segment were $1.3 billion in 2012, an increase of 8 percent from $1.2 billion a year ago.
For the full year 2012, Timken reported sales of $5.0 billion for 2012, a decrease of 4 percent from the prior year. The decline reflects lower demand from the light vehicle, heavy truck, industrial machinery, and oil and gas sectors in the second half of the year. In 2012, the company generated net income of $495.5 million, compared with $454.3 million a year ago.
James W. Griffith, Timken president and chief executive officer said that "We expect to deliver solid operating results in 2013 as we continue to take actions to reduce costs and drive efficiencies in response to the environment. Our outlook for the year reflects our expectation that we will continue to see inventory reduction by our customers in the first half of the year, and anticipate an improving economy in the second half with customer demand matching consumption."
The company expects sales to be down around 5 percent compared to 2012, driven primarily by continued lower demand. Operating performance is expected to remain strong, with all four segments maintaining double-digit operating margins.
For the full year 2013, The Timken Company expects Mobile Industries' sales to be down 5 to 10 percent for the year due to the impact of lower customer demand driven by the company's market strategy. Process Industries' sales are expected to be relatively flat, based on a second-half recovery in Asia and industrial distribution. Aerospace and Defense sales should be 7 to 12 percent, due to increased demand in civil and defense as well as critical motion control end markets. Steel sales are poised to be down 7 to 12 percent, driven by lower oil and gas as well as industrial end-market demand and surcharges.
