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 company remains on track to complete the divestiture of its Belts business in the third quarter. Timken expects the move to improve Industrial Motion EBITDA margins by more than 200 basis points on a pro forma basis. Its exit from automotive original-equipment business is also progressing as planned and is expected to begin benefiting Engineered Bearings margins in 2027, according to Boldea.
Timken said the integration of Bijur Delimon, acquired for its lubrication systems platform, is ahead of schedule. The acquisition brings the lubrication systems platform to approximately $400 million in revenue.
The company reported high-single-digit organic growth in its strategic verticals during the second quarter, including mid-teens growth in automation and robotics. Boldea also said Timken is investing in aerospace and defense operations, including added operating headcount and retention efforts, to support existing backlog and future growth. Discenza said those investments are expected to create near-term costs, as specialized aerospace workers can require six to nine months of training before contributing to production.
Timken said 60% of company revenue is now represented by businesses engaged in its 80/20 operating initiatives, with a target of 75% by the third quarter. The company expects the initiative to begin benefiting its bottom line in 2027.
Full-year outlook raised
For 2026, Timken now expects total sales to increase 5% to 6%, compared with its prior forecast of 4% to 6%. At the midpoint, the company expects organic revenue growth of 3.5%, 0.5 percentage points above its prior outlook. Bijur Delimon and currency are each expected to add about 1 percentage point to full-year revenue.
- Adjusted EPS is expected to range from $6.05 to $6.35, representing a $0.20 increase at the midpoint from prior guidance.
- Adjusted EBITDA margin is projected to be in the low 18% range at the midpoint, compared with 17.4% in 2025.
- Free cash flow is expected to total $375 million to $400 million, up $25 million from the prior outlook.
Discenza said the higher earnings outlook reflects a $0.20 to $0.25-per-share benefit from the revised organic-sales outlook and second-quarter outperformance, plus the $0.08-per-share tariff-refund benefit. Those items are partly offset by a $0.10-per-share headwind for second-half cost inflation, including logistics costs and strategic investments. The company’s outlook does not assume additional IEEPA tariff refunds in the second half because timing and amounts remain uncertain.
Timken generated $107 million of operating cash flow in the second quarter and more than $80 million of free cash flow. It returned $45 million to shareholders through dividends and share repurchases, including the repurchase of approximately 155,000 shares. The company raised its quarterly dividend 3% and ended the quarter with net debt to adjusted EBITDA of 2 times.
Management said order patterns remained robust, although it characterized demand recovery as a steady increase rather than the sharper rebound seen in earlier cycles. Boldea cited continued strength in aerospace and defense, automation and industrial solutions, and infrastructure, while noting that geopolitical uncertainty and normal seasonal patterns informed the company’s second-half assumptions.
About Timken (NYSE:TKR)
The Timken Company is a global manufacturer specializing in engineered bearings and mechanical power transmission products. Its core offerings include tapered and cylindrical roller bearings, spherical and plain bearings, mounted bearing units, and precision gear drives. Timken's products serve a broad range of industries, from industrial machinery and aerospace to automotive, rail, wind energy and heavy equipment.
Beyond bearings, Timken's portfolio extends to industrial chains, belts, couplings and related components designed to optimize power transmission systems.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
Before you consider Timken, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Timken wasn't on the list.
While Timken currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Tesla, Nvidia, and Google helped shape the last era of market growth, but the next wave could come from a new group of companies. Inside this report, you’ll find 7 stocks that could play a major role in the next tech-driven market boom.
Get This Free Report
