NYSE:TKR
TIMKEN CO
TIMKEN CO is a global leader in precision bearing manufacturing, delivering durable solutions that enable motion control for major industries worldwide.
Key Metrics
Investment Thesis
Bull Case
TIMKEN CO offers defensive exposure to essential infrastructure with consistent operating cash flows that cover dividend payments of $98.3M comfortably. The undervaluation of book value relative to total assets suggests the market is overreacting to recent earnings compression, while the company's dominant market share in specialized bearing niches provides pricing power over time.
Bear Case
Investors should be wary of the widening gap between revenue growth and profit contraction, with net income dropping 24% over three years despite flat sales. High leverage ratios and a substantial retained earnings deficit of $2.68B signal that past capital allocation may have been inefficient, increasing vulnerability to a recessionary environment.
About TIMKEN CO
TIMKEN CO designs, manufactures, and markets bearings and related products globally, serving industries such as automotive, industrial machinery, aerospace, and renewable energy. With a diverse product portfolio spanning rolling element bearings, plain bearings, and seals, the company addresses critical needs for equipment reliability in heavy-duty applications across North America, Europe, and Asia.
Analysis
Management Discussion
While revenue held steady at $4.58B in 2025, net income declined to $317.3M from $417.0M in 2022, reflecting persistent margin pressure likely stemming from input costs or one-time charges. Cash flow from operations of $554.3M demonstrates strong liquidity generation relative to the $317.3M net profit, allowing the company to fund dividends and modest debt repayments despite a net cash decrease of $8.2M.
Industry Overview
The global bearings market is highly competitive but consolidated, with TIMKEN holding significant share in high-barrier-to-entry segments like aerospace and heavy mining equipment. Industry growth is tied to capital expenditure cycles in renewable energy and defense spending, though volatility remains high due to supply chain fragility and inflationary pressures on manufacturing costs.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $4.50B | $4.77B | $4.57B | $4.58B |
| Cost of Revenue | $3.21B | $3.26B | $3.13B | $3.19B |
| Gross Profit | $1.29B | $1.51B | $1.44B | $1.39B |
| Operating Expenses | $681.2M | $852.0M | $829.6M | $852.7M |
| Operating Income | $606.9M | $657.1M | $611.1M | $540.6M |
| G&A | $637.1M | $740.8M | $752.0M | $748.3M |
| Stock-Based Comp | $30.4M | $30.6M | $25.9M | $28.3M |
| D&A | $164.0M | $201.3M | $221.8M | $230.1M |
| Depreciation | $113.4M | $129.0M | $136.3M | $142.6M |
| Amortization | $50.6M | $65.7M | $78.0M | $79.1M |
| Other OpEx | $44.1M | $111.2M | $77.6M | $104.4M |
| Non-Operating Income | $-56.0M | $-126.6M | $-116.9M | $-124.6M |
| Interest Expense | $74.6M | $110.7M | — | — |
| Interest Income | $3.8M | $9.3M | $14.9M | $10.3M |
| Pre-Tax Income | $550.9M | $530.5M | $494.2M | $416.0M |
| Income Tax | $133.9M | $122.5M | $118.9M | $98.7M |
| Continuing Ops | $417.0M | $408.0M | $375.3M | $317.3M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $417.0M | $408.0M | $375.3M | $317.3M |
| Minority Interest | $9.6M | $13.9M | $22.6M | $28.9M |
| Net to Common | $407.4M | $394.1M | $352.7M | $288.4M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $2.50B | $2.63B | $2.52B | $2.60B |
| Cash & Equivalents | $331.6M | $418.9M | $373.2M | $364.4M |
| Accounts Receivable | $699.6M | $671.7M | $664.6M | $689.4M |
| Inventory | $1.19B | $1.23B | $1.20B | $1.24B |
| Prepaid Expenses | $44.4M | $41.5M | $39.5M | $45.7M |
| Other Current Assets | $237.1M | $273.7M | $244.0M | $258.0M |
| Long-Term Assets | $3.27B | $3.91B | $3.89B | $4.08B |
| Intangibles | $765.3M | $1.03B | $1.01B | $1.00B |
| Goodwill | $1.10B | $1.37B | $1.38B | $1.49B |
| Operating Leases | $101.4M | $119.7M | $130.6M | $152.9M |
| Other LT Assets | $1.30B | $1.39B | $1.37B | $1.43B |
| Total Assets | $5.77B | $6.54B | $6.41B | $6.68B |
| Current Liabilities | $1.01B | $1.47B | $820.5M | $922.1M |
| Accounts Payable | $403.9M | $367.2M | $321.7M | $353.2M |
| Current Debt | $2.7M | $359.4M | $4.3M | $14.4M |
| Current Leases | $24.1M | $25.9M | $32.0M | $33.1M |
| Deferred Revenue | $54.3M | $45.4M | $41.4M | $55.7M |
| Taxes Payable | $51.3M | $19.9M | $24.4M | $31.4M |
| Other Current Liab | $476.1M | $653.5M | $396.7M | $434.3M |
| Long-Term Liabilities | $2.41B | $2.37B | $2.61B | $2.41B |
| Long-Term Debt | $1.91B | $1.79B | $2.05B | $1.88B |
| LT Operating Leases | $65.2M | $78.7M | $84.0M | $100.8M |
| Other LT Liab | $427.7M | $499.0M | $472.7M | $425.1M |
| Total Liabilities | $3.42B | $3.84B | $3.43B | $3.33B |
| Shareholders' Equity | $2.35B | $2.70B | $2.98B | $3.35B |
| Retained Earnings | $1.93B | $2.23B | $2.49B | $2.68B |
| AOCI | $-181.9M | $-146.9M | $-301.7M | $-96.5M |
| Total L&E | $5.77B | $6.54B | $6.41B | $6.68B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $417.0M | $408.0M | $375.3M | $317.3M |
| Non-Cash Adjustments | $-317.9M | $452.6M | $164.9M | $211.8M |
| Working Capital Changes | $364.7M | $-315.4M | $-64.5M | $25.2M |
| Cash from Operations | $463.8M | $545.2M | $475.7M | $554.3M |
| Capital Expenditures | $178.4M | — | — | — |
| Cash from Investing | $-573.3M | $-806.5M | $-304.6M | $-148.3M |
| Debt Issuances | $1.40B | $1.56B | $1.86B | $97.3M |
| Debt Repayments | $978.5M | $1.33B | $1.84B | $365.8M |
| Share Buybacks | $211.6M | $250.9M | $40.5M | $57.4M |
| Dividends Paid | $91.7M | $94.0M | $96.1M | $98.3M |
| Cash from Financing | $206.8M | $347.1M | $-194.8M | $-437.1M |
| FX Effect | $-14.5M | $-7.2M | $-22.0M | $22.9M |
| Net Change in Cash | $82.8M | $78.6M | $-45.7M | $-8.2M |
| Beginning Cash | $257.9M | $340.7M | $419.3M | $373.6M |
| Ending Cash | $340.7M | $419.3M | $373.6M | $365.4M |
Frequently Asked Questions
How does TIMKEN CO make money?
The company's revenue is driven by four primary segments: Automotive (powertrain and chassis bearings), Industrial (mining, construction, and agricultural machinery), Aerospace (landing gear and rotor systems), and Marine/Rail (ship propulsion and train wheel sets). Financials indicate a heavy reliance on high-cost raw materials like steel and nickel, with significant goodwill suggesting substantial investment in specialized manufacturing capabilities.
What are the main risks for TKR?
The company faces elevated debt levels with $1.88B in long-term debt against $4.58B in revenue, creating interest rate sensitivity and leverage concerns during economic slowdowns. Significant goodwill of $1.49B exposes TIMKEN to impairment risks if industrial demand softens or supply chain disruptions halt production. Additionally, reliance on commodity prices for steel and energy inputs directly impacts margins, while geopolitical tensions could disrupt global logistics chains.
What is TKR's competitive advantage?
TIMKEN CO benefits from an entrenched global distribution network that ensures rapid spare parts availability for critical infrastructure, creating high switching costs for clients. The company's proprietary metallurgy and heat-treatment processes deliver superior bearing longevity compared to generic alternatives, while its diversified industrial exposure provides a natural hedge against cyclical downturns in any single sector.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.