TIMKEN CO (TKR): Results of Operations and Financial Condition
TIMKEN CO (TKR) filed an SEC Form 8-K — Results of Operations and Financial Condition. Timken Reports Second-Quarter 2026 Results • Sales of $1.26 billion, up 7.5 percent from last year • Second-quarter diluted EPS of $0.41; adjusted EPS of $1.83 • Net income margin of 2.3 percent; adjusted EBITDA margin of 19.6 percent • Updates 2026 EPS outlook; now expects 2026
How this was made
The 30-second read
Why it matters
Traders can reprice the stock based on the raised full-year EPS ranges, margin/EBITDA improvements, and cash flow, while monitoring the sustainability of tariff-refund benefits and divestiture-related charges.
Market read
A company-specific earnings and guidance update with explicit EPS ranges and margin/cash flow metrics, making it actionable for near-term positioning and estimate revisions.
What to watch
Adjusted EBITDA includes a net benefit from IEEPA tariff refunds; if those benefits normalize, future margin and EPS could be less resilient than the raised outlook implies.
Sales of $1.26 billion, up 7.5 percent from last year; second-quarter diluted EPS of $0.41 and adjusted EPS of $1.83; updates 2026 EPS outlook to $3.75 to $4.05 and raises adjusted EPS outlook to $6.05 to $6.35.
Sales, adjusted EPS, adjusted EBITDA margin and segment profitability improved year over year, but GAAP net income, diluted EPS and net income margin declined sharply due to an impairment charge related to the anticipated divestiture of the belts business.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $1.26 billion | – | 7.5% |
| Organic sales growthother | 4.4 percent | – | 4.4 percent |
| Cost of products soldGAAP | $861.6 million | – | – |
| Selling, general & administrative expensesGAAP | $205.9 million | – | – |
| Amortization of intangible assetsGAAP | $20.7 million | – | – |
| Impairment and restructuring chargesGAAP | $87.9 million | – | – |
| Operating IncomeGAAP | $84.8 million | – | – |
| Non-service pension and other postretirement expenseGAAP | $(0.7) million | – | – |
| Other expense, netGAAP | $(2.5) million | – | – |
| Interest expense, netGAAP | $(23.7) million | – | – |
| Income Before Income TaxesGAAP | $57.9 million | – | – |
| Provision for income taxesGAAP | $20.7 million | – | – |
| Net IncomeGAAP | $37.2 million | – | – |
| Net Income Attributable to The Timken CompanyGAAP | $28.9 million | – | – |
| Net income marginGAAP | 2.3% | – | (440 bps) |
| Basic Earnings per shareGAAP | $0.42 | – | – |
| Diluted EPSGAAP | $0.41 | – | (63.4)% |
| Adjusted net incomenon-GAAP | $128.4 million | – | – |
| Adjusted EPSnon-GAAP | $1.83 | – | 28.9% |
| Adjusted EBITDAnon-GAAP | $247.2 million | – | – |
| Adjusted EBITDA marginnon-GAAP | 19.6% | – | 190 bps |
| Net Cash from OperationsGAAP | $107.1 million | – | (3.8)% |
| Free Cash Flownon-GAAP | $80.5 million | – | 2.9% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Engineered BearingsHigher volumes, the impact of higher pricing and favorable foreign currency translation. | $807.0 million | – | 3.8 percent |
| Industrial MotionHigher demand across most platforms and end-market sectors, revenue from the Bijur Delimon acquisition, higher pricing and favorable foreign currency translation. | $453.9 million | – | 14.6 percent |
2026 outlook
- Revenueup approximately 5.5 percent in total at the midpoint from 2025
- NoteEarnings per diluted share of $3.75 to $4.05.
- NoteAdjusted earnings per diluted share of $6.05 to $6.35.
Capital returns
- Increased its quarterly dividend by 3 percent.
- Repurchased approximately 155 thousand shares of company stock.
- Returned $45.0 million of cash to shareholders through dividends and share repurchases during the quarter.
What drove it
- Total sales growth was driven by higher volumes across both segments, higher pricing, revenue from the Bijur Delimon acquisition and favorable foreign currency translation.
- Engineered Bearings adjusted EBITDA was $161.3 million or 20.0 percent of sales, compared with $153.4 million or 19.7 percent of sales in the second quarter of last year.
- Industrial Motion adjusted EBITDA was $105.6 million or 23.3 percent of sales, compared with $72.6 million or 18.3 percent of sales in the second quarter of last year.
- Adjusted EBITDA in the current period included a net benefit of $8.0 million for IEEPA tariff refunds.
Concerns
- Net income in the current period includes an impairment charge related to the anticipated divestiture of the company’s belts business.
- Impairment and restructuring charges were $87.9 million, compared with $2.9 million in the second quarter of last year.
- Net income margin declined to 2.3% from 6.7%, and diluted EPS declined to $0.41 from $1.12.
- Segment adjusted EBITDA gains were partially offset by higher operating costs.
What to watch
- Execution of the anticipated divestiture of the company’s belts business and the associated impairment charge.
- Whether higher volume, price/mix, Bijur Delimon acquisition revenue and favorable foreign currency translation continue to support sales growth.
- The durability of the $8.0 million net benefit for IEEPA tariff refunds in adjusted EBITDA.
- Delivery against 2026 revenue growth of approximately 5.5 percent in total at the midpoint from 2025 and adjusted EPS of $6.05 to $6.35.
Balance sheet and cash flow
- Net cash provided by operations in the quarter was $107.1 million.
- Free cash flow was $80.5 million.
- Net debt to adjusted EBITDA was 2.0 times as of June 30, 2026.
Analysis
Timken reported second-quarter sales of $1.26 billion, up 7.5 percent from the prior-year period, with organic sales up 4.4 percent. Management attributed the increase to higher volumes in both segments, higher pricing, Bijur Delimon acquisition revenue and favorable foreign currency translation. Industrial Motion was the larger growth contributor, with sales up 14.6 percent, while Engineered Bearings sales increased 3.8 percent.
Underlying profitability improved despite the weaker GAAP result. Adjusted EBITDA increased to $247.2 million and the adjusted EBITDA margin expanded to 19.6% from 17.7%. Adjusted EPS rose to $1.83 from $1.42, while adjusted net income increased to $128.4 million from $99.3 million. Both segments expanded adjusted EBITDA margins, with Industrial Motion reaching 23.3 percent of sales and Engineered Bearings reaching 20.0 percent of sales. Positive price/mix, higher volume, tariff refunds and, in Industrial Motion, the Bijur Delimon acquisition supported segment earnings, partially offset by higher operating costs.
GAAP earnings were materially affected by the anticipated belts-business divestiture. Impairment and restructuring charges were $87.9 million versus $2.9 million a year earlier, contributing to operating income of $84.8 million versus $147.8 million. Net Income Attributable to The Timken Company was $28.9 million versus $78.5 million, diluted EPS was $0.41 versus $1.12, and net income margin was 2.3% versus 6.7%. The current-period adjusted EBITDA also included a net benefit of $8.0 million for IEEPA tariff refunds.
Cash conversion remained positive, with $107.1 million of net cash provided by operations and $80.5 million of free cash flow. The company returned $45.0 million through dividends and share repurchases, increased its quarterly dividend by 3 percent, and repurchased approximately 155 thousand shares. Net debt to adjusted EBITDA was 2.0 times as of June 30, 2026.
Management raised its 2026 adjusted EPS outlook to $6.05 to $6.35 and forecasted GAAP earnings per diluted share of $3.75 to $4.05. It also expects revenue to be up approximately 5.5 percent in total at the midpoint from 2025, compared with its prior outlook of 5 percent growth at the midpoint. The guide reflects management’s stated confidence in first-half performance, continued momentum and disciplined execution.
Management, verbatim
Second quarter results demonstrate our team's strong execution and continued progress against these objectives combined with our ability to capitalize on improving customer demand.
Lucian Boldea, president and chief executive officer
Our performance during the first half of the year, continued momentum, and disciplined execution framework gives us the confidence to raise our 2026 outlook.
Lucian Boldea, president and chief executive officer
Not in the filing
stated, not guessed- Previous release outlook was not provided, so no reported-period comparison against prior guidance is available.
- Cash balance as of June 30, 2026 was not provided.
- Gross margin was not provided.
- Operating-expense guidance was not provided.
- Tax-rate guidance was not provided.
- Prior-quarter comparisons were not provided for reported metrics.
- A complete diluted EPS figure for the six months ended June 30, 2026 and 2025 was truncated in the provided filing text.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is Timken’s SEC 8-K (Item 2.02) with 2Q 2026 operating results and an updated 2026 outlook.
Ticker impact
Timken reported 2Q 2026 results and raised 2026 EPS outlook to $3.75-$4.05 (GAAP) and $6.05-$6.35 (adjusted).
Likely positive near-term bias as guidance raise and higher adjusted EPS range can support earnings revisions.
The filing discloses a concrete guidance update plus improved adjusted EBITDA margin (19.6% vs 17.7%) and higher segment profitability, which typically drives upward estimate revisions. Offsetting factors include lower GAAP net income margin and impairment/divestiture-related charges, but the company emphasizes adjusted metrics and cash generation.
Market effects
Signals improving demand and pricing power in engineered bearings and industrial motion, potentially supportive for industrial suppliers with similar end-market exposure.
Limited direct regional read-through; company reports favorable foreign currency translation and global operations.
Tariff refund benefit and FX translation highlight macro sensitivity for multinational industrials, but the guidance raise is company-specific.
Counterpoint
GAAP profitability deteriorated year over year (net income margin 2.3% vs 6.7%) and includes an impairment charge tied to the belts business divestiture, which could worry quality-of-earnings investors.
Key entities
- issuerThe Timken Company
Advanced motion technology company reporting 2Q 2026 results and raising 2026 EPS outlook.
- corporate eventBijur Delimon acquisition
Contributed to segment sales and adjusted EBITDA in 2Q 2026 per the filing.
- corporate eventBelts business divestiture
Impairment charge included in 2Q 2026 net income related to anticipated divestiture.
- macro/regulatory itemIEEPA tariff refunds
Net benefit included in adjusted EBITDA in 2Q 2026 per the filing.
