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Timken Nets $135.7 Million on Record Sales
"CANTON, Ohio -- 2004 net income at The Timken Co. was $135.7 million, or $1.49 per diluted share on record sales of $4.5 billion, officials announced earlier today. Sales were up 19% over 2003, when net income was $36.5 million, or 44 cents per diluted share."The strategic actions we have taken to improve our competitiveness enabled us to capitalize on the global industrial recovery and deliver improved performance," commented James W. Griffith, president and chief executive officer. "We achieved record sales and strong earnings growth over last year despite unprecedented high raw material costs. The rapid improvement in industrial market demand for our products that buoyed our performance in 2004 is continuing. Our momentum remains strong as we enter 2005, and we will be taking steps to further improve margins, customer service and productivity in the face of these strong markets."For the fourth quarter ended Dec. 31, 2004, sales were a record $1.2 billion, an increase of 16% from a year ago. Earnings per diluted share for the fourth quarter were 71 cents compared to 25 cents in the 2003 period. Fourth quarter performance was driven by strong volume, operating performance and material cost recovery.In 2004, Automotive Group sales increased 13% to a record $1.6 billion. Sales grew due to increased light vehicle content from new products, medium and heavy truck market demand and favorable currency translation. Automotive Group earnings before interest and taxes in 2004 were $15.9 million, compared to $15.7 million in 2003. Steel Group 2004 sales, including inter-segment sales, were a record $1.4 billion, up 35% from 2003. The sales growth reflected record shipments as well as surcharges and price increases driven by higher raw material costs. Demand increased in all end markets, led by strong industrial market growth. The group dramatically improved profitability, achieving earnings before interest and taxes of $54.8 million in 2004, versus a loss of $6 million in 2003. The improvement was due to volume, raw material surcharges and price increases.Industrial Group 2004 sales increased 14% from the prior year to a record $1.7 billion. The increase was driven by higher demand, increased prices and favorable foreign currency translation. Many end markets recorded substantial growth, with the strongest increases in construction, agriculture, rail and general industrial equipment. The Industrial Group also benefited from growth in emerging markets, especially China. 2004 earnings before interest and taxes was $177.9 million, compared to $128 million in 2003. Growth was due to leveraging increased volume, continued operating cost improvements and price increases.Officials expect continued improvement this year with estimated earnings per diluted share, excluding special items, of $1.70 to $1.85 for the full year and 38 cents to 43 cents for the first quarter. Global industrial markets are expected to continue to grow, supporting strong performance in the Industrial and Steel Groups. North American light vehicle production is expected to be down slightly, while medium and heavy truck production is expected to grow but at a lower rate. All three business groups should see improved performance due to productivity, price increases and surcharges, which should recover a significant portion of material cost increases, Griffith said.Visit The Timken Co.: www.timken.com"