The Timken Company (NYSE: TKR) reported better-than-expected fourth quarter results on Wednesday, driven by higher pricing and strong demand in its industrial motion business, while providing a 2026 profit outlook that signals a return to growth.
Quarterly Highlights
The North Canton-based manufacturer posted fourth quarter adjusted earnings of $1.14 per diluted share, surpassing the company’s implied outlook range of $1.01 to $1.11. While this was a slight decrease from the $1.16 reported in the same period last year, the results were bolstered by sales of $1.11 billion, up 3.5% from a year ago.
Segment Performance
The company’s Industrial Motion segment was a primary driver of growth, with sales jumping 8.4% to $396.8 million. Timken attributed this increase to higher demand across most sectors and favorable pricing. The segment’s adjusted EBITDA margin expanded to 21.0% from 19.3% a year earlier.
In contrast, the Engineered Bearings segment saw sales rise a modest 0.9% to $714.2 million, as higher pricing was partially offset by lower end-market demand. On an organic basis, which excludes currency impacts, segment sales were down 1.0%.
We finished the year strong, delivering higher organic sales and cash flow in the fourth quarter versus the prior year.
Financial Health
Timken ended 2025 with a net debt to adjusted EBITDA ratio of 2.0x, having reduced its net debt by $132 million during the year. The company also continued its trend of returning value to investors, repurchasing approximately 140,000 shares in the fourth quarter and marking its 12th consecutive year of annual dividend increases.
Full-year 2025 sales were $4.6 billion, as light 0.2%. Free cash flow for the full-year reached $406.1 million, up significantly from $305.7 million in the prior year.
2026 Outlook and Strategy
Looking ahead, Timken issued an initial 2026 outlook that anticipates adjusted earnings per share between $5.50 and $6.00, representing an 8% increase at the midpoint compared to 2025’s adjusted EPS of $5.33. The company expects total revenue to grow between 2% and 4% in 2026.
Management’s “Near-Term Strategic Priorities” for the coming year include deploying 80/20 principles across the enterprise to simplify the portfolio and address underperforming businesses. The company also plans to invest in higher-profit verticals and continue integrating recent acquisitions to drive synergies.
