Research Desk Line-up: Kennametal Post Earnings Coverage

LONDON, UK / ACCESSWIRE / November 20, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on The Timken Co. (NYSE: TKR), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=TKR, following the Company's disclosure of its third quarter fiscal 2017 operating results on October 25, 2017. The maker of bearings and power transmissions outperformed top- and bottom-line expectations and raised full-year guidance. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Get more of our free earnings reports coverage from other constituents of the Machine Tools & Accessories industry. Pro-TD has currently selected Kennametal Inc. (NYSE: KMT) for due-diligence and potential coverage as the Company reported on November 01, 2017, its financial results for Q1 FY18 which ended on September 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on Kennametal when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on TKR; also brushing on KMT. With the links below you can directly download the report of your stock of interest free of charge at:

http://protraderdaily.com/optin/?symbol=TKR

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Earnings Reviewed

Timken reported Q3 2017 sales of $771.4 million, up 17.3% from sales of $657.4 million in Q3 2016. The growth in sales reflected higher demand across most end-market sectors led by industrial distribution and off-highway, as well as the benefit of acquisitions and currency. The Company's sales exceeded analysts' expectations of $759.2 million.

During Q3 2017, Timken posted net income of $53.5 million, or $0.68 per diluted share, versus net income of $33.6 million, or $0.43 per diluted share, for Q3 2016. The y-o-y increase in net income was attributed to the impact of higher volume, favorable manufacturing performance, lower impairment and restructuring charges, and the benefit of acquisitions and currency.

Excluding special items, Timken's adjusted net income for the reported quarter was $55.9 million, or $0.71 per diluted share, up from $42.1 million, or $0.53 per diluted share, for the year-ago corresponding period. The Company's earnings beat Wall Street's estimates of $0.68 per share.

Timken's Segment Results

During Q3 2017, Mobile Industries segment's sales jumped 19.7% to $422.8 million compared with sales of $353.1 million in Q3 2016, primarily driven by the benefit of acquisitions, increased demand in the off-highway and heavy truck sectors and favorable currency, partially offset by lower automotive demand.

In the reported quarter, the Mobile Industries Division's earnings before interest and taxes (EBIT) totaled $34.9 million or 8.3% of sales compared with EBIT of $25.9 million, or 7.3% of sales, for Q3 2016. Excluding special items, the segment's adjusted EBIT was $37.6 million, or 8.9% of sales, in Q3 2017 compared to $32.4 million, or 9.2% of sales, in Q3 2016.

For Q3 2017, Process Industries business reported sales of $348.6 million, reflecting growth of 14.6% compared to sales of $304.3 million in Q3 2016, driven primarily by increased demand in the industrial distribution and heavy industries sectors, increased shipments in wind energy, and favorable currency.

In the reported quarter, Process Industries' EBIT totaled $61.7 million, or 17.7% of sales, compared with EBIT of $42 million, or 13.8%, for the year-earlier same quarter. The increase in EBIT was driven by higher volume and favorable manufacturing performance, partially offset by higher material, logistics, and selling, general, and administrative (SG&A) costs.

Cash Matters

For Q3 2017, Timken reported net cash from operating activities of $28 million, bringing the year-to-date total to $143 million. After CapEx spending of $63 million year-to-date, the Company's free cash flow for the first 9 months of 2017 was approximately $80 million. As of September 30, 2017, Timken had cash and cash equivalents of $137.2 million, while its short-term debt, including current portion of long-term debt was $46.1 million.

Outlook

For FY17, Timken is forecasting revenue to grow approximately 12% on a y-o-y basis. The Company is expecting Mobile Industries sales for FY17 to advance approximately 13%, driven by the benefit of acquisitions and currency, and improved demand in the off-highway and heavy truck sectors, while it is estimating Process Industries sales to grow 11% on a y-o-y basis, reflecting growth across most end-market sectors led by industrial distribution and the benefit of acquisitions and currency.

For FY17, Timken is anticipating earnings per diluted share to range from $2.78 to $2.83 for the full year on a GAAP basis, while the Company expects adjusted earnings per diluted share to range from $2.58 to $2.63.

Stock Performance

On Friday, November 17, 2017, the stock closed the trading session at $46.00, marginally rising 0.11% from its previous closing price of $45.95. A total volume of 501.84 thousand shares have exchanged hands. Timken's stock price surged 6.60% in the last three months, 1.21% in the past six months, and 19.17% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have rallied 15.87%. The stock is trading at a PE ratio of 18.30 and has a dividend yield of 2.35%. At Friday's closing price, the stock's net capitalization stands at $3.57 billion.

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SOURCE: Pro-Trader Daily