Timken Company Reports 4.2% Decline in Net Sales for Q1 2025

The Timken Company reported a decline in financial performance for the first quarter of 2025, with net sales totaling $1,140.3 million, down 4.2% from $1,190.3 million in the same period of 2024. The decrease was attributed to lower end-market demand across both of its segments—Engineered Bearings and Industrial Motion—as well as unfavorable foreign currency exchange impacts. Net income for the quarter was $91.4 million, a 17.4% decrease from $110.6 million year-over-year, while net income attributable to The Timken Company was $78.3 million, down 24.3% from $103.5 million. Diluted earnings per share also fell to $1.11 from $1.46.

The company's operating income decreased significantly to $144.0 million, a 22% drop from $184.6 million in the prior year. This decline was primarily driven by lower sales volume, increased manufacturing costs, and higher impairment and restructuring charges, which rose to $10.9 million from $2.3 million. The cost of products sold decreased slightly to $781.6 million, reflecting the impact of foreign currency exchange and lower volume, but was offset by higher manufacturing costs and costs associated with acquisitions.

In terms of strategic developments, Timken completed the acquisition of CGI, Inc. in 2024, which is now included in its Industrial Motion segment. The company also announced a leadership transition, with Richard G. Kyle appointed as interim President and CEO following the departure of Tarak B. Mehta. This transition incurred severance costs of approximately $9.3 million. The company continues to focus on operational excellence and capital deployment to drive shareholder value, with plans to invest in core business areas and pursue strategic acquisitions.

Operationally, Timken employed approximately 19,000 people across 45 countries as of March 31, 2025. The company reported a slight increase in cash and cash equivalents to $376.1 million, alongside a total debt of $2,127.1 million. The ratio of net debt to capital remained stable at 36.2%. Looking ahead, Timken anticipates a challenging environment in 2025 due to the imposition of import tariffs and ongoing global economic volatility, which is expected to adversely impact revenues and earnings. The company projects a decrease in full-year revenues compared to 2024, primarily driven by lower demand and unfavorable foreign currency exchange rates, although it expects to generate higher cash from operating activities due to improved working capital performance.