Revenue Growth
Total revenue of $1.23B, up 8% year-over-year; organic revenue up 4.3% driven by pricing and Industrial Motion volume growth.
Timken Company
· TKR
May 6th, 2026
Summary
- Earnings Call Date:
- 2026-05-06
- Change Since:
- +15.28%
- Next Earnings Date:
- 2026-08-05
Earnings Call Sentiment
PositiveThe call conveyed clear momentum: record Industrial Motion performance, expanded margins, raised full-year guidance, active portfolio actions (Bijur Delimon acquisition and Belts divestiture), and disciplined capital allocation. Offsetting risks include margin pressure in Engineered Bearings, regional softness in China and certain end markets, tariff and inflation uncertainty, and near-term sequential EPS headwinds. On balance, the positive operational and financial developments and the upgrade to guidance outweigh the highlighted headwinds.
Company Guidance
The company raised its 2026 outlook to total net sales growth of 4%–6% (was 2%–4%), with organic revenue now expected to be ~3% at the midpoint (up 1 point), plus ~1% from M&A (Bijur Delimon) and ~1% from currency; adjusted EPS is guided to $5.75–$6.25 (up $0.25 at the midpoint versus prior guidance), which the company says implies ~13% adjusted EPS growth at the midpoint (vs. ~8% prior), consolidated adjusted EBITDA margin of ~18% at the midpoint (up from 17.4% in 2025) with an implied incremental margin of ~30% for the year, free cash flow of $350–$375 million (~105% conversion at the midpoint), year‑over‑year earnings growth expected each quarter, Q2 expected to be higher versus last year on organic revenue, margins and EPS but modestly lower sequentially versus Q1 (Q1 adj. EPS was $1.67 and adj. EBITDA margin was 18.8%), and the $0.25 midpoint EPS increase reflects a $0.20 benefit from organic sales, a $0.15 tariff tailwind and a $0.10 headwind for potential cost inflation.
Record Industrial Motion Performance
Industrial Motion sales of $425M, an all-time quarterly record and up 12% YoY; organic growth of 7% (currency +4.2%, Bijur Delimon +0.8%).
Engineered Bearings Revenue
Engineered Bearings sales of $806M, up 6% YoY with organic sales up ~3% led by aerospace and heavy industries.
Margin Expansion and Profitability
Adjusted EBITDA of $231M, margin expanded to 18.8% (from 18.2% prior year); adjusted EPS $1.67, up nearly 20% YoY; reported incremental margins ~35% for the quarter.
Improved Full-Year Guidance
Raised FY2026 net sales outlook to +4%–6% (was 2%–4%); organic revenue midpoint increased to +3%; adjusted EPS guidance increased to $5.75–$6.25 (midpoint +$0.25).
Capital Allocation and Balance Sheet
Repurchased ~280k shares and returned $53M via buybacks and dividends in Q1; board approved new 5‑year repurchase authorization for 10M shares; net debt/adjusted EBITDA ended at 2.1x.
Acquisition and Portfolio Actions
Acquired Bijur Delimon (closed mid‑March), adding sales and scaling automated lubrication systems to nearly $400M; announced sale of Belts business to Gates to simplify portfolio and improve Industrial Motion margins (expected close Q3).
Cash Flow Outlook
Operating cash flow of $39M in Q1 and slightly positive free cash flow after CapEx (Q1 seasonally low); FY free cash flow guidance increased to $350M–$375M (~105% conversion on GAAP net income at midpoint).
Pricing Actions and Tariff Dynamics
Pricing contributed ~$32M (~+3% to revenue) during the quarter to help offset tariff impact; tariffs represented a $20M headwind versus prior year but guidance reflects a ~$0.15 per share tailwind from recent tariff developments (primarily India IEPA and Section 232 changes).
80/20 Transformation Progress
Established transformation office, trained nearly 300 leaders on 80/20 discipline, and executed portfolio actions intended to reduce complexity and redeploy resources to growth areas.
Operator
Good morning. My name is Kara, and I will be your conference operator today. At this time, I would like to welcome everyone to The Timken Company's first quarter earnings release conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press star then number one on your telephone keypad again. Thank you.
Mr. Frohnapple, you may begin your conference.
Neil Andrew Frohnapple
Thank you, operator, and welcome, everyone, to our first quarter 2026 earnings conference call. This is Neil Andrew Frohnapple, Vice President of Investor Relations for The Timken Company. We appreciate you joining us today. Before we begin our remarks this morning, I want to point out that we have posted presentation materials on the company's website that we will reference as part of today's review of the quarterly results. You can also access this material through the download feature on the earnings call webcast link. With me today are The Timken Company's President and CEO, Lucian Boldea, and Michael Discenza, our Chief Financial Officer. We will have opening comments this morning from both Lucian and Michael, before we open up the call for your questions. During the Q&A, I would ask that you please limit your questions to one question and one follow-up at a time to allow everyone a chance to participate.
During today's call, you may hear forward-looking statemen...
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