Timken Q2 Earnings Call Highlights

Timken delivered strong second-quarter results: Revenue rose 7.5% to $1.26 billion, adjusted EBITDA margin expanded to 19.6%, and adjusted EPS increased nearly 30% to $1.83. Growth was driven by pricing, volume, acquisitions, currency and tariff refunds. Industrial Motion posted record sales of $454 million, up 14.6%, while Engineered Bearings sales increased nearly 4%. Automation, infrastructure, aerospace and defense were key growth areas, partly offset by weaker solar-related power and electrification demand. Timken raised its 2026 outlook for the second time: Sales growth is now expected at 5% to 6%, adjusted EPS at $6.05 to $6.35, and free cash flow at $375 million to $400 million. The company also expects portfolio moves, including the Belts divestiture and automotive exit, to improve margins over time.

Timken NYSE: TKR reported higher second-quarter sales, margins and adjusted earnings, citing increased pricing, volume growth and stronger demand in several industrial end markets. The company also raised its full-year 2026 outlook, marking its second increase this year. Second-quarter revenue rose 7.5% from a year earlier to $1.26 billion. Organic sales increased 4.4%, while the Bijur Delimon acquisition contributed 1.8 percentage points of growth and foreign-currency translation added 1.3 percentage points. Adjusted EBITDA totaled $247 million, or 19.6% of sales, compared with a 17.7% margin in the prior-year quarter. Adjusted earnings per share increased nearly 30% to $1.83.

Chief Financial Officer Mike Discenza said adjusted results included an $8 million, or $0.08-per-share, net benefit from refunds of IEEPA tariffs. The company said the refunds more than offset higher tariff costs relative to the prior year, producing a $6 million net favorable year-over-year tariff impact in the quarter. Industrial Motion posts record quarterly sales Industrial Motion generated record quarterly sales of $454 million, up 14.6% from a year earlier. Organic sales increased 8%, with Bijur Delimon contributing about 5 percentage points and currency adding more than 1 percentage point. The segment’s adjusted EBITDA margin rose 500 basis points year over year to 23.3%. Discenza attributed the improvement to operational execution, higher volume, favorable price and mix, and tariff refunds. Automation and industrial solutions, infrastructure, and industrial transportation and mobility each posted double-digit growth, while aerospace and defense also grew. Power and electrification sales declined because of a sizable reduction in solar sales. Linear motion systems and lubrication systems led growth among product platforms. President and CEO Lucian Boldea said the company’s expansion of Rollon’s European business into the U.S. contributed to a second consecutive quarter of double-digit organic growth in the linear motion platform. The Engineered Bearings segment reported sales of $807 million, up nearly 4%, including 2.5% organic growth. Aerospace and defense and infrastructure delivered the strongest gains, while industrial transportation and mobility was relatively flat. Segment adjusted EBITDA was $161 million, or 20% of sales, compared with 19.7% a year earlier. Favorable price and mix, higher volume and tariff refunds aided margins, though higher labor and other operating costs partly offset those benefits. Strategy actions include divestiture, portfolio investments Boldea said Timken is advancing its “Elevate to Outperform” strategy, which centers on portfolio optimization, investment in strategic verticals and customers, and operating more cohesively across its multinational operations. The co...