Canton, Ohio-based The Timken Company reported Thursday net income of $80.9 million in Q3, down from $111 million in Q3 2011, as sales volumes and material surcharges were lower in the quarter. Sales of $1.1 billion in Q3 reflected a decrease of 14 percent from the same period a year ago.
"As the quarter unfolded, the fragile global economy and declining market sector demand began to impact our business," said James W. Griffith, Timken president and chief executive officer. "End users are increasingly cautious, which translates into inventory adjustments and decreased short-term opportunity."
Timken said expects lower shipments to customers in many of its global markets in Q4. As a result, Timken now expects 2012 sales to be down 3 to 5 percent compared to 2011 with: Mobile Industries' sales down 4 to 6 percent for the year reflecting the impact of exited business due to the company's market strategy as well as year-end customer inventory adjustments; Process Industries' sales up 6 to 8 percent, driven by the full-year impact of acquisitions; Aerospace and Defense sales up 8 to 10 percent, driven by increased demand across most end markets, led by the defense sector; and Steel sales down 11 to 13 percent, driven by lower industrial end-market demand and surcharges, partially offset by improved pricing.
In Q3, sales for steel, including inter-segment sales, were $377 million, down 25 percent from $501.5 million for the same period last year. The results reflect reduced shipments to the industrial and oil and gas market sectors and lower raw-material surcharges of approximately $70 million, partially offset by favorable pricing.