Canton, OH — Mar. 19, 2002 — The Timken Company expects to report improved financial performance above consensus estimates for the first quarter and full year. The improvement is due to higher-than-expected revenues, increased efficiency resulting from the company’s restructuring actions and aggressive cost management.
“With two months’ results in hand, we can see that the first quarter will be better than we communicated in our year-end conference call. However, other than reflecting a stronger-than-expected U.S. automotive sector, our order books only tell us that the decline in manufacturing seems to have ended. As of this date, we have not observed a perceptible increase in broad-based manufacturing,” said W.R. Timken, Jr., chairman and chief executive officer.
“The company has benefited from new product applications and, in the case of steel, from penetration gains due to economically troubled competitors.”
In 2002, the company is continuing with a global restructuring of its manufacturing operations, which is aimed at reducing costs, creating more focused factories and better servicing customers worldwide. The ongoing manufacturing initiative, combined with an administrative restructuring that occurred in the second half of 2001, should produce an annualized savings rate of $80 million by the end of 2002. “Through these restructuring activities, we are taking the tough actions needed to improve profitability and transform our global operations to more specialized and competitive facilities,” Timken said. “With this stronger base, we are better prepared to profit from new opportunities in a stronger U.S. and world economy.”
Consensus analyst estimates were a loss of ($0.07) per share for the first quarter and earnings of $0.24 per share for the year, excluding restructuring charges. Assuming continuing improvement in the U.S. economy, the company expects to earn in a range of $0.15 to $0.20 per share in the first quarter and $0.45 to $0.65 per share for the full year. These estimates are before restructuring charges and assume a 38% tax rate.