Timken Co.'s (TKR) fourth-quarter loss narrowed as the company benefited from better pricing, cost cutting and lower material expenses.
The maker of bearings and specialty steel products also projected 2010 earnings of 85 cents to $1.15 a share and sees sales rising 5% to 10%, driven by stronger steel shipments as customers are expected to rebuild inventory levels. Analysts surveyed by Thomson Reuters expected earnings of $1.07 per share on sales of $3.37 billion, or up 9%.
Timken has been cutting costs amid an industrywide slump in steel demand among its key buyers, including the automotive, construction and industrial-equipment sectors. Late last year, the company completed the sale of its needle roller bearings business to Japan's JTEKT Corp. (6473.TO), receiving $330 million from the transaction.
On Tuesday, Timken reported a loss of $20.2 million, or 21 cents a share, compared with a year-earlier loss of $36.2 million, or 37 cents a share. Excluding write-downs in the latest quarter and other impacts, earnings surged to 40 cents from 7 cents. Revenue tumbled 29% to $774.6 million.
Wall Street expected earnings of 8 cents on revenue of $727 million.
Gross margin grew to 22.4% from 16.2%.
Sales in the bearings and transmission group, its largest business, were down 18% although profit jumped 50%. Sales also fell in all of its other units.
Shares closed Monday at $24.10 and were inactive in premarket trading.
-By John Kell, Dow Jones Newswires; 212-416-2480; firstname.lastname@example.org