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Supplier blames rising costs, car industry woes
By Rob Delaney
Bloomberg News
Published on Saturday, Oct 25, 2008
Timken Co., the supplier of bearings to the world's top five carmakers, slashed its fourth-quarter profit forecast Friday because of lower auto production and higher raw-material costs.
Shares plunged nearly a third.
Timken fell $5.61, or 30 percent, to $13.06. That was the biggest one-day decline since Jan. 3, 1978. Shares are down 59.6 percent, including reinvested dividends, since Jan. 1 and are down 64 percent from a year ago.
Earnings in the three months through December will be 16 to 26 cents a share, Canton-based Timken said. On Sept. 30, the company forecast earnings of 52 to 57 cents a share for the period.
Timken, which also makes specialty steel components used by customers including Caterpillar Inc., lowered the forecast to account for ''raw material costs not fully offset by surcharges during the quarter and the impact of lower automotive production volumes.''
The company said it still expects record full-year earnings of $3.35 to $3.45 for the year, excluding special items.
Timken executives in recent years have been steering the company away from heavy reliance on the automotive industry into other areas, including energy and aircraft.
Global steel maker valuations have plummeted in recent months as the global credit crisis has cut demand for cars and other manufactured goods.
''Overall sentiment in the steel industry remains poor, with demand from customers in the construction and automotive industries still weak,'' Jing Ulrich, chairwoman of China equities at JPMorgan Chase & Co. in Hong Kong, said in an e-mail.
Timken said third-quarter net income rose to $130.4 million, or $1.35 a share, from $41.2 million, or 43 cents, a year earlier. Sales increased 18 percent to $1.48 billion.
Timken bought Purdy Corp., which makes aircraft parts, for $200 million in October 2007 to broaden its customer base. Timken's plant in Wuxi, China, has increased sales to a Shanghai- based unit of Volkswagen AG that makes transmissions for Golfs, Boras and other models sold in the Asian country, the company said in January.
Timken Co., the supplier of bearings to the world's top five carmakers, slashed its fourth-quarter profit forecast Friday because of lower auto production and higher raw-material costs.
Get the full article here.
Comments
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Orrville, Oh
Posted 04:39 PM, 10/25/2008
Reality demands automobile manufacturers stockholders (money marketers) market more stock dividends (money) quarterly in the wholesale and retail price of automobiles. The more stock dividends (money) Timken stockholders (money marketers) market quarterly in the wholesale and retail price of bearings. The more stock dividends (money) OPEC nations and Enron stockholders, Investors and stockholders in the Illegal Drug Business, Business owners stockholders, Financial Institutions investors and stockholders, Bulls on Wall Street, Hillarys, Wal-Mart stockholders, and foreign and domestic investors (money marketers) market quarterly. In the wholesale and retail price of every product and service needed to produce bearings, automobiles, and Human Beings use for life. That gets only product or service. To measure and maintain the strength and growth of this unaffordable economy and prove that only money that can only be used to identify agreed value of sellers and buyers in the marketplace has value?
