Timken Delivers Solid Q1 Results Amid Challenging Market Conditions
The Timken Company has reported solid first quarter (Q1) 2025 results, despite facing challenging operating conditions in the industrial market. According to CEO Rich Kyle, the company delivered a strong performance on cost actions and other initiatives, helping to offset declining demand in Europe and the Americas.
For the quarter, sales reached $1.1 billion, with organic revenue down around 3% from last year. However, Timken saw growth in Asia driven by wind energy, which helped stabilize end market demand. The company's total backlog was up low single digits compared to the fourth quarter, a significant improvement from previous years.
Adjusted EBITDA margins came in at 18.2%, while adjusted earnings per share were $1.40, both below prior year. However, results were helped by targeted cost actions and continued strong performance from the CGI acquisition. Timken also generated higher free cash flow compared to the prior year and ended the quarter with a solid balance sheet.
Looking ahead, CEO Rich Kyle emphasized that the company is focused on performing well through this environment while continuing to advance its strategy. CFO Phil Fracassa provided more detail on the updated outlook and assumptions, noting that industrial market conditions are expected to remain challenging over the rest of the year.
Regarding tariffs, Timken is responding quickly and actively passing the cost into the market through repricing the portfolio. While the company estimates a net direct impact from tariffs currently in place of around $25 million this year, it expects to fully offset the cost impact on a run-rate basis by the end of the year.
Timken reaffirmed its commitment to deliver $75 million of cost savings in 2025 and plans to generate significant free cash flow this year. As CEO Rich Kyle noted, 'We are confident in our ability to mitigate the direct impact from tariffs,' and believe that these efforts will provide flexibility moving forward.
