Revenue: Reported just under $1.2 billion for the quarter, marking a decrease of 5.7% from the previous year.
Organic Sales: Saw a 9.2% decline year-over-year, significantly impacted by a decrease in wind energy demand in China.
Adjusted EBITDA: $246 million or 20.7% of sales, slightly down from $266 million or 21% the previous year.
Net income: $104 million on a GAAP basis, down from $1.67 per diluted share the previous year to $1.46 per diluted share.
Adjusted Earnings Per Share (EPS): $1.77 compared to $2.09 per share last year.
Engineered Bearings Segment: Sales were $803 million, down 10.9% from the previous year, with an adjusted EBITDA margin of 22.6%.
Industrial Motion Segment: Sales were $388 million, up 7.1% from last year, with an adjusted EBITDA margin of 21.2%.
Future Guidance
Revenue Forecast: Expectation of full-year revenue to decrease in the range of 2% to 4% compared to 2023.
Adjusted EPS Projection: Updated forecast ranges from $6 to $6.30, an increase from previous guidance.
EBITDA Margin: Anticipation of a high 18% range for the consolidated adjusted EBITDA margin.
Free Cash Flow: Reaffirming full-year outlook of approximately $425 million.
CapEx: Expected to be around 4% of sales, focused on manufacturing footprint expansions in Mexico and India.
Net Interest Expense: Estimated core net interest expense in the range of $105 million.
Adjusted Tax Rate: Forecasted at 27% for the full year.
Trends, Market Conditions, Sentiment
Wind Energy Sector: Significant decline in demand, particularly in China, impacting the results but stabilized at lower levels without further expected deterioration.
Market Softness: Continued overall market softness from the second half of the last year into the first quarter, with no significant signs of strengthening.
Operational Improvements: Noted improvements in operational excellence, including benefits from acquisitions and synergies contributing to margin support.
Capital Allocation: Focus on continuing to drive value through disciplined capital allocation, with a bias towards mergers and acquisitions (M&A).
Notable Quotes
”Timken delivered a solid first quarter with organic revenue in line with the industrial market conditions and strong margin performance."
"The first quarter was a good start to the year in a challenging market environment."
"We remain confident in the growth potential for our portfolio, and we will continue to invest in our growth and margin initiatives."
"Looking at the longer-term outlook, we remain confident in the growth potential for our portfolio…"
"We remain focused on delivering for our shareholders through the current market softness, while positioning for a return to growth.”
