CANTON, Ohio (AP) — The Timken Co. said Thursday its third-quarter net income fell 27 percent, hurt by an industrywide slowdown in demand in Asia and Europe.
The Canton Ohio-based maker of transmissions and bearings cut its full year earnings and revenue outlook because of lower demand.
"As the quarter unfolded, the fragile global economy and declining market sector demand began to impact our business," CEO James Griffith said.
Still, Griffith said Timken maintained double-digit operating margins and predicted a rebound in 2013. Shares of Timken rose 6 percent.
The company said the industries that it makes products for have become more cautious. But Griffith added that Timken had the right plan in place to offset weak demand, cutting production until demand increases.
"We are making appropriate adjustments, including curtailing production schedules and carefully managing cash and expenses," Griffith said.
And Timken executives pointed out the company's gross margin — the amount of each dollar in revenue a company actually keeps — rose slightly to 26.2 percent. Griffith predicted demand would return in 2013.
"We expect to see a rebound in demand in 2013 that, coupled with our ongoing efforts to reduce fixed costs and increase operating efficiency, should position us to deliver both sales and earnings comparable to our results in 2012," Griffith said in a call with investors.
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