NORTH CANTON, Ohio, Oct. 30, 2019 /PRNewswire/ -- The Timken Company (NYSE: TKR; www.timken.com), a world leader in engineered bearings and power transmission products, today reported third-quarter 2019 sales of $914 million, up 3.7 percent from the same period a year ago. The increase was primarily driven by the benefit of acquisitions, partially offset by lower organic revenue mainly in Mobile Industries, and unfavorable foreign currency translation.
In the third quarter, Timken posted net income of $64.2 million or $0.84 per diluted share, versus net income of $71.6 million or $0.91 per diluted share for the same period a year ago. The year-over-year decrease was primarily driven by pension and other retirement plan remeasurement charges and higher income tax expense, partially offset by improved overall operating performance.
Excluding special items (detailed in the attached tables), adjusted net income in the third quarter of 2019 was $87.4 million or $1.14 per diluted share, a record for the third quarter, versus adjusted net income of $82.9 million or $1.06 per diluted share for the same period in 2018. The year-over-year increase was driven by favorable price/mix, lower material and logistics costs and the benefit of acquisitions, partially offset by the impact of lower volume and related manufacturing utilization, and higher interest expense.
Cash from operations for the quarter was $144.9 million, and free cash flow was $101.2 million. During the quarter, the company returned $53.7 million of capital to shareholders with the payment of its 389th consecutive quarterly dividend and the repurchase of approximately 750 thousand shares. Also, among recent developments, the company announced an agreement to acquire BEKA Lubrication, a leading global supplier of automatic lubrication systems, which will strengthen Timken's leadership position in this attractive product line.
"Timken delivered strong operating performance in the third quarter," said Richard G. Kyle, president and chief executive officer. "While several industrial markets were softer than anticipated, we delivered record earnings per share, strong operating margins and excellent cash flow. Delivering record results in this environment demonstrates that we are successfully executing our strategy. We continue to drive outgrowth in sectors such as renewable energy and rail, deliver revenue and earnings growth through our acquisitions, and take proactive measures to reduce costs and improve our operating efficiency. Our performance in the third quarter is a reflection of the stronger, more diverse Timken Company."
Third-Quarter 2019 Segment Results
Mobile Industries sales of $455.1 million decreased 2 percent compared with the same period a year ago. The decrease was driven primarily by lower shipments in off-highway and heavy truck, and unfavorable currency, partially offset by the benefit of acquisitions and growth in the rail sector.
Earnings before interest and taxes (EBIT) in the quarter were $52 million or 11.4 percent of sales, compared with EBIT of $50.6 million or 10.9 percent of sales for the same period a year ago. The increase in EBIT reflects favorable price/mix, lower material and logistics costs and the benefit of acquisitions, partially offset by the impact of lower volume and related manufacturing utilization.
Excluding special items (detailed in the attached tables), adjusted EBIT in the quarter was $53.8 million or 11.8 percent of sales, compared with $52.5 million or 11.3 percent of sales in the third quarter last year.
Process Industries reported sales of $458.9 million, up 10 percent from the same period a year ago. The increase was driven primarily by the benefit of acquisitions and organic growth in the renewable energy and marine sectors, partially offset by lower revenue in industrial services and unfavorable currency.
EBIT for the quarter was $95.6 million or 20.8 percent of sales, compared with EBIT of $81.8 million or 19.6 percent of sales for the same period a year ago. The increase in EBIT was driven primarily by favorable price/mix and the benefit of acquisitions, partially offset by lower volume.
Excluding special items (detailed in the attached tables), adjusted EBIT in the quarter was $98.3 million or 21.4 percent of sales, compared with $84 million or 20.1 percent of sales in the third quarter last year.
2019 Outlook
The company now expects 2019 revenue to be up approximately 5 to 6 percent in total versus 2018. This reflects the benefit of acquisitions, partially offset by unfavorable currency translation. Organic revenue is expected to be roughly flat overall.
"While we are taking a cautious view with respect to the fourth quarter, we remain confident in the long-term outlook for the company," said Kyle. "Our expected record performance in 2019 demonstrates our earnings power in a slowing industrial market environment, the enduring strength of our portfolio, and our ability to navigate and deliver through industrial cycles. We look forward to updating investors on our strategy and longer-term outlook at our upcoming investor day in December."
Timken now anticipates strong 2019 earnings per diluted share in the range of $4.15 to $4.20 for the full year on a GAAP basis. Excluding special items (detailed in the attached tables), the company expects record 2019 adjusted earnings per diluted share ranging from $4.70 to $4.75.
About BHR Bearing ( Shenzhen Qinggong Bearing Co, Ltd.)
Shenzhen Qinggong Bearing Co., Ltd. （www.bhrbearing.cn）is a well-know bearing manufacturer in China since the year 1996 with its own factory. Despite our own BHR bearings, we also distribute kinds of famous branded bearings from worldwide manufacturers SKF bearings, FAG bearings, NSK bearings, KOYO bearings, NTN bearings, NACHI bearings, ASAHI bearings, TOYOTA auto bearings......and OEM can also be supplied.
We BHR bearing is focused and committed to deliver our customers high quality products and solutions because they are at the core of everything we do. By combining technology with our design engineering expertise we are able to offer a breadth of advanced bearings and solutions. With variety of bearings, competitive prices, fast delivery and good after-sale service, hope we will get a chance to talk bearings together.
