Bearings and power transmission solutions manufacturer Timken reported its 2021 first quarter financial results on Wednesday, showing considerable year-over-year and sequential sales gains that led the company to significantly raise its full-year outlook.
The North Canton, OH-based company posted total Q1 sales of $1.03 billion, up 11 percent year-over-year and up 15 percent from Q4 2020. Timken said the growth was driven by organic growth across most end-market sectors — led by renewable energy and off-highway — while currency translation and the company's recent Aurora Bearing acquisition also helped. Organic sales improved 7.5 percent year-over-year in Q1, while Aurora Bearing contributed 0.8 percentage points of growth. Organic revenue increased in all regions outside of North America, where it fell 3 percent year-over-year.
Gross profit of $299 million improved from $279 million of a year earlier and $237 in Q4; operating profit of $151 million improved from $122 million of a year earlier and $99 million in Q4; while total profit of $113 million improved from $81 million of a year earlier and $53 million in Q4.
"We posted an outstanding first quarter, achieving double-digit revenue growth, margin expansion and record adjusted earnings per share despite supply chain challenges and cost headwinds," said Richard Kyle, Timken president and CEO. "Our strong operational execution and diverse, market-leading portfolio are delivering record results, while we continue to invest in our long-term profitable growth."
By Timken business segment in Q1:
- Process Industries sales of $521 million increased 14.1 percent year-over-year and increased 13.8 percent from Q4 2020. Timken said the increase was driven primarily by organic growth in renewable energy, distribution and general industrial sectors.
- Mobile Industries sales of $504.5 million increased 8.1 percent year-over-year and increased 16.2 percent from Q4. Timekn said the increase was driven mainly by organic growth in the off-highway, heavy truck and automotive sectors.
Looking forward, Timken now expects 2021 full-year revenue to be up about 18 percent at the midpoint — far above the 12 percent increase it forecasted in its Q4 earnings report. It expects midpoint organic growth of about 15 percent.
"We are raising our full-year outlook to reflect the robust and improving market conditions as well as our strong operational execution," Kyle said. "Our outgrowth initiatives are contributing to our positive 2021 outlook, as we continue to win new business with our differentiated products and engineering innovation. We anticipate strong margin performance again this year, despite supply chain and other cost challenges."