Timken Co. plans $75 million in cost-cutting measures amid economic uncertainty
JACKSON TWP. − The Timken Co. plans to cut costs and save $75 million this year amid global economic uncertainty.
President and CEO Tarak Mehta said Wednesday that unfavorable foreign currency exchange rates and an ongoing decrease in demand, particularly in Europe, prompted a "cautious" 2025 outlook.
Timken, a global engineered bearings and industrial motion products manufacturer headquartered at 4500 Mount Pleasant St. NW, projected a 1% to 4% decrease in revenue year-over-year.
During Wednesday's investor presentation, Mehta said challenges like inflation should be partially offset by cost savings. That will include reducing discretionary spending, prioritizing product lines and services with the greatest returns and other initiatives to reduce costs.
"We plan to continue our disciplined approach on capital allocation," he said, adding that mergers and acquisitions in growing markets and share buybacks are other options.
According to media reports last month, Timken Belts in Missouri plans to lay off nearly 100 workers this year and an 18% reduction in workforce is planned at Timken Drives in Illinois, which already eliminated about 40 positions last fall.
Timken's outlook for this year includes President Donald Trump's 10% tariff on Chinese imports but not the paused 25% tariffs on goods from Canada and Mexico.
Phil Fracassa, the company's executive vice president and chief financial officer, described the China tariff as "fairly immaterial." However, he said the North American tariffs would be a "short-term headwind" that would take time for tactics, such as price surcharges and supply chain changes, to mitigate.
"And obviously, we're hopeful that the situation resolves itself," Fracassa said.
The Timken Co. also reported:
The planned retirement of Christopher A. Coughlin, executive vice president and president of industrial motion, who has been with the company for 41 years.
Sales in the fourth quarter of 2024 decreased by 1.6% year-over-year to $1.07 billion, primarily attributed to lower demand in Europe and unfavorable currency exchange rates that were partially offset by acquisitions.
Sales for the full year were $4.6 billion, a decrease of 4.1% compared to 2023. The decrease was attributed to lower demand in Europe and a decline in China's renewable energy market, among other factors.
The net income for the fourth quarter was $71.2 million or $1.01 per share ― compared to $58.7 million or $0.83 per share for the same period in 2023.
Net income in 2024 was $352.7 million or $4.99 per share. That's a 10.5% decrease compared to $394.1 million or $5.47 per share in 2023.
Reach Kelly at 330-580-8323 or kelly.byer@cantonrep.com
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