Ohio-based bearings and specialty steelmaker Timken Co. reported a second quarter net loss of $64.5 million Wednesday, which compares to an income of $88.9 million for the same quarter of 2008.
Sales dropped to $828.9 million, down 46 percent from $1.54 billion a year ago. The company attributes the drop in sales to weaker demand across most of the company's end markets, as well as unfavorable exchange rates.
“The combination of a slow economy and inventory reduction throughout the supply chains we serve continues to curb demand for our products. We’re now seeing evidence that our customers’ inventory de-stocking activities may go longer and deeper than we expected,” said James W. Griffith, Timken president and chief executive.
“We have decreased
manufacturing output in response to lower demand and are on track in our efforts to right-size the company. We’ve also had success in product pricing, reducing inventory levels and cutting spending across the company, leading to strong cash generation for the quarter. We have positioned the company well, and are confident that we will see stronger structural profitability as markets stabilize,” Griffith concluded.
Timken also announced Wednesday that it has agreed to sell its needle roller bearings business to Japanese firm JTEKT Corp. for $330 million in cash. The deal, expected to close by the end of the year, will reduce Timken's exposure to the
automotive market to less than 20 percent of total revenue. Proceeds from the sale will provide increased liquidity and be used for general company purposes.
“This transaction is a major step forward in our strategy to transform Timken’s portfolio to focus on industrial sectors with strong aftermarkets,” said Mr. Griffith.