Key Highlights

  • Adjusted EPS of USD 1.65 compares with a USD 1.48 estimate, while GAAP diluted EPS was USD 1.34.
  • Net sales were USD 1.211 billion against a USD 1.21 billion estimate, up 4.7% from last year.
  • Adjusted EBITDA reached USD 225 million, an 18.5% Margin compared with 17.4% in the year-earlier quarter.
  • The 2026 adjusted EPS range was increased to USD 6.35 to USD 6.50, with free Cash Flow guidance unchanged.

Timken (NYSE:TKR) reported third quarter net sales of USD 1,211.4 million, compared with USD 1,157.1 million a year earlier and a USD 1.21 billion estimate. Adjusted EPS was USD 1.65, against an estimate of USD 1.48. GAAP Net Income attributable to the company was USD 93.8 million, or USD 1.34 per diluted share, compared with USD 69.3 million, or USD 0.99.

Quarter Results and Segment Detail

Chief executive Lucian Boldea said total sales rose 4.7% and Organic Sales grew 2.8%, driven by higher volumes in Industrial Motion and positive pricing in both segments. The Bijur Delimon Acquisition added 1.8% to sales. Adjusted results include a net benefit of about USD 12 million, or USD 0.13 per share, from IEEPA Tariff refunds. Adjusted EBITDA was USD 225 million.

Engineered Bearings sales were USD 771 million, up 0.7%, with organic sales up 0.5% on higher pricing and flat volumes. Segment adjusted EBITDA was USD 156 million, or 20.2% of sales, against 18.8% last year. Management said aerospace and defense achieved the strongest gain among market sectors, while power and electrification declined by a double-digit rate on lower China wind revenue.

Industrial Motion sales were USD 440 million, up 12.4%, with organic sales up 7.3%. Aerospace and defense rose nearly 20%, and linear motion systems posted double-digit gains. Segment adjusted EBITDA margin was 19.8%, up 80 basis points. By region, organic sales rose 6% in the Americas and 3% in Asia Pacific, and fell 3% in EMEA.

Cash Flow, Balance Sheet and Capital Returns

Operating cash flow was USD 256 million and free cash flow was USD 221 million. Timken returned USD 89 million to shareholders through Buybacks and dividends, repurchasing more than 500,000 shares, with about 9 million shares remaining on its authorization. Cash and equivalents were USD 410.2 million and total Debt was USD 1,923.9 million at September 30. Net debt to adjusted EBITDA stood at 1.7 times and improved from the prior quarter.

The company completed the divestiture of its belts Business near the end of the quarter. Management said the sale is projected to raise Industrial Motion EBITDA margins by more than 200 basis points in 2027.

Guidance and the 2027 View

The 2026 adjusted EPS range was increased to USD 6.35 to USD 6.50, which management described as 20% growth at the midpoint versus 2025. The increase reflects third quarter performance, including tariff refunds, and a USD 0.08 per share benefit from lower projected net interest expense. Total Revenue growth guidance of about 5.5% is unchanged, with organic growth at 3.5% at the midpoint, currency adding about 1.25% and net M&A adding about 0.75%. Free cash flow guidance remains USD 375 million to USD 400 million, and the adjusted EBITDA margin is in the mid-18% range at the midpoint. The outlook assumes China wind sales decline again in the fourth quarter.

For 2027, management currently projects organic sales growth in the mid-single digits. Backlog at the end of the third quarter was up mid-single digits from a year earlier and grew sequentially.

What Timken Pointed To Beyond the Quarter

Third quarter adjusted EPS of USD 1.65 sits alongside a full year range of USD 6.35 to USD 6.50, and third quarter free cash flow of USD 221 million sits alongside full year guidance of USD 375 million to USD 400 million. Net debt to adjusted EBITDA stands at 1.7 times.

Management tied its direction to the Elevate to Outperform strategy: applying the 80/20 framework across businesses, growing in automation and robotics, which posted double-digit growth in the quarter, and building a vertically aligned acquisition pipeline.