Timken shares fall 7.8% despite Q3 profit beat and raised forecast

Timken (TKR) said on Nov. 4 that third-quarter adjusted earnings per share reached $1.65, topping the $1.49 consensus estimate. Sales of $1.21 billion were in line with the $1.22 billion estimate, and the company raised its 2026 forecast.

Shares fell 7.8% in regular trading as of 3:59 p.m. ET, from a regular-session close of $115.66.

The company designs and makes engineered systems and components for aerospace and defense, power and electrification, and automation and industrial markets. It posted $4.6 billion in sales in 2025 and employs about 19,000 people in 45 countries.

Here's how the company did:

• Adjusted EPS: $1.65 vs. $1.37 a year earlier, $1.49 consensus estimate
• Diluted EPS: $1.34 vs. $0.99 a year earlier
• Sales: $1.21 billion vs. $1.16 billion a year earlier, $1.22 billion consensus estimate

Sales rose 4.7% from a year earlier. The company said the increase was driven primarily by higher volumes in the Industrial Motion segment, revenue from the Bijur Delimon acquisition and higher pricing. Organically, sales rose 2.8%.

President and Chief Executive Officer Lucian Boldea said: "In the third quarter, we delivered double-digit earnings growth versus last year and generated significant cash flow."

2026 outlook

Timken raised its 2026 adjusted EPS forecast to $6.35 to $6.50, from the $6.05 to $6.35 range it gave on Aug. 4. Its GAAP diluted EPS forecast is now $4.05 to $4.20, up from $3.75 to $4.05.

The company expects 2026 revenue to rise about 5.5% in total from 2025, a slight increase from the 5% growth at the midpoint it gave in August.

Boldea said: "While it is too early to provide a formal outlook for 2027, we currently expect organic sales to increase mid-single digits compared to 2026."

Segment results

Engineered Bearings sales were $771.4 million, up 0.7% from a year earlier. Adjusted EBITDA was $155.8 million, or 20.2% of sales, up from $144.2 million, or 18.8%.

Industrial Motion sales rose 12.4% to $440.0 million. Adjusted EBITDA was $87.0 million, or 19.8% of sales, compared with $74.5 million, or 19.0%.

Adjusted EBITDA for the quarter included a net benefit of $12.4 million for IEEPA tariff refunds.

Cash and capital returns

Net cash from operations was $256.1 million and free cash flow was $221.4 million. Timken repurchased about 505 thousand shares and returned $88.7 million to shareholders through dividends and buybacks.

The company completed the previously announced sale of its belts business to Gates Industrial Corporation Ltd. at the end of the third quarter. Its net debt to adjusted EBITDA was 1.7 times as of Sept. 30, 2026.