New Report Preview – Machinery Steel

The Timken Company (TKR) reported 4Q earnings from continuing operations of $1.11/share, which adjusted to $1.15/share excluding one-time items, ahead of company guidance of $0.97-1.07 and the Street’s $1.06/share.  The beat was due to a lower-than-expected tax rate as well as a richer product mix.

Guidance for 2012 was for EPS of $4.90-5.20/share, up from $4.59/share in 2011 with overall sales up 5-8% from 2011.  The company is expecting a 10-15% uptick in Aerospace and Defense sales, an 8-13% increase in Process Industries sales, a 5-10% gain in Steel sales and flat Mobile Industries sales.

Management noted that the growth in Steel sales would be driven by improved pricing and a richer product mix as the company is currently capacity constrained (for SBQ and seamless mechanical tubing), with orders on allocation.

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