US-based Timken Company Thursday reported sales of $1.0 billion in the second quarter of 2010, an increase of 37 percent over the same period a year ago.
The company generated strong earnings from continuing operations, net of non-controlling interest, in the second quarter of $81.4 million. Excluding special items, the company posted $82.2 million in income from continuing operations, net of non-controlling interest, compared with a loss of $6.9 million a year ago.
The increase in second-quarter earnings reflects the combined effects of recovering demand and improvements in the company's cost structure, manufacturing performance and pricing. Partially offsetting these benefits were higher selling and administrative costs across all of the company's segments related to performance-based compensation plans.
Total debt was $493 million as of June 30, 2010, or 22.9 percent of capital. As of June 30, 2010, the company's cash position was $796 million, or $303 million in excess of total debt. This compares with a net cash position of $243 million as of Dec. 31, 2009. The favorable change in net cash reflects strong cash flow from earnings, partially offset by pension contributions, including a discretionary payment of $100 million in the first quarter, and working-capital requirements.
The company's outlook for 2010 reflects general improvement in the global economy that varies by end-market and geographic region. Timken anticipates an increase in sales of approximately 25 to 30 percent over 2009.
The company is raising its 2010 full-year earnings estimate, excluding special items, to a range of $2.40 to $2.60 per diluted share, compared with its prior estimate of $1.60 to $1.80 per diluted share. The company expects to generate cash from operating activities in excess of $380 million, and free cash flow (after capital expenditures and dividends) in excess of $200 million for the full year 2010.