NORTH CANTON, Ohio, July 31, 2014 /PRNewswire/ -- The Timken Company (NYSE: TKR; www.timken.com ) has reported sales of $789 million for the second quarter of 2014. Sales exclude revenue attributable to the steel business, which was spun off as TimkenSteel Corporation TMST -0.12% at the end of June. Second-quarter sales were comparable to the previous year's second quarter and reflect stronger demand in Process Industries, offset by lower shipments in Mobile Industries.
In the second quarter, Timken generated consolidated net income of $62.7 million, or $0.68 per diluted share. Net income from continuing operations totaled $56.5 million, or $0.61 per diluted share, compared with net income from continuing operations of $55.3 million, or $0.57 per diluted share, during the same period a year ago. (Earnings from discontinued operations of $0.07 per diluted share reflect steel business results of $0.31 per diluted share, partially offset by one-time separation costs of $0.24 per diluted share.)
Adjusted net income from continuing operations was $59.4 million, or $0.65 per diluted share in the second quarter, and compares to adjusted net income from continuing operations of $61.2 million, or $0.63 per diluted share, during the same period a year ago (reference Table 1 for adjustments). Despite strong manufacturing performance and lower selling and administrative expenses, adjusted net income was down slightly due to unfavorable mix, an inventory valuation adjustment and an accrual for value-added tax during the quarter. However, earnings per share increased due to the impact of share repurchases.
"The second quarter was in line with our expectations," said Richard G. Kyle, Timken president and chief executive officer. "We delivered sequential revenue growth of 7 percent and adjusted margins improved by 200 basis points. The sequential increase reflects our strategic efforts to gain penetration in a slow-growth market environment and our margin improvement initiatives.
"During the quarter, we completed the spinoff of TimkenSteel on time and under budget and we're now fully focused on executing our strategy for the bearings and power transmission business," Kyle said. "We're winning new OE and aftermarket business in both our Mobile and Process Industries segments. We expect a stronger second half based on modest market growth combined with penetration gains and continued cost improvement."