Global bearings manufacturer Timken (Canton, OH) on Thursday reported its 2014 fourth quarter and year-end earnings results, led by a 2 percent Q4 sales increase year-over-year. Q4 sales reached $762.2 million, driven by organic growth in the Process Industries segment and offset by an expected sales decrease in the Mobile Industries segment due to planned program exits.
Q4 net income was $38.9 million, up 15.4 percent year-over-year from $33.7 million a year ago. Adjusted operating income in Q4 was $57.9 million, up 28.1 percent YOY. The company said that revenue growth, lower manufacturing costs and a lower tax rate drove the net income improvement, which was partially offset by currency.
Q4 Process Industries sales of $372.7 million were up 12 percent YOY. The company said sales were driven by organic growth in both the original equipment and aftermarket channels as well as the benefit of acquisitions, partially offset by currency.
For the year, 2014 sales were $3.1 billion, up approximately 5 percent when exluding the impact of $110 million of planned program exits in Mobile Industries that concluded in 2013. Net income from continuing operations was $144.5 million, compared with $175.2 million in 2013.
Adjusted net income from continuing operations improved in 2014 to $232.9 million, compared with $198.6 million in the prior year. The company said revenue growth and cost reductions drove the net income improvement.
"We are pleased to report solid fourth-quarter results that reflect strong execution in a slow-growth, strong-dollar environment," said Timken President and Chief Executive Officer Richard G. Kyle. "For the full year, we were able to grow the top line modestly and convert that revenue growth into a 23 percent increase in adjusted EPS through our continued focus on portfolio improvement and cost reduction.
"Looking ahead to 2015, we are viewing our markets slightly more cautiously than 2014. New business wins combined with modest market growth are expected to result in approximately 4 percent organic growth, but that will largely be offset by the impact of currency," Kyle added. "As in 2014, we expect to continue to improve our cost structure and mix to deliver solid earnings per share growth on the revenue."
The company expects Process Industries' sales to increase approximately 2 to 4 percent in 2015.
