Timken’s third quarter was marked by resilience in a mixed industrial environment, with management pointing to higher pricing, cost reductions, and disciplined portfolio management as key drivers. Engineered Bearings delivered volume and margin gains, offsetting weakness in Industrial Motion, which faced lower solar demand and cautious customer maintenance spending. CEO Lucian Boldea emphasized, “Our management team’s top priority is finishing the year strong,” while highlighting Timken’s ability to pass through higher costs and leverage its global manufacturing footprint. The market responded positively to Timken’s performance, reflecting confidence in its operational discipline and margin execution.
Is now the time to buy TKR? Find out in our full research report (it’s free for active Edge members).
Timken (TKR) Q3 CY2025 Highlights:
- Revenue: $1.16 billion vs analyst estimates of $1.12 billion (2.7% year-on-year growth, 3.6% beat)
- Adjusted EPS: $1.37 vs analyst estimates of $1.24 (10.1% beat)
- Adjusted EBITDA: $201.7 million vs analyst estimates of $190.2 million (17.4% margin, 6% beat)
- Management reiterated its full-year Adjusted EPS guidance of $5.25 at the midpoint
- Operating Margin: 12%, in line with the same quarter last year
- Organic Revenue was flat year on year vs analyst estimates of 2.1% declines (265.3 basis point beat)
- Market Capitalization: $5.31 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Timken’s Q3 Earnings Call
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Bryan Blair (Oppenheimer) asked about the near-term outlook and whether the sequential decline in orders was already visible or simply a cautious assumption. CFO Michael Discenza replied that the outlook incorporates current order trends, emphasizing a cautious approach given trade uncertainties but no notable loss of market share.
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Angel Castillo Malpica (Morgan Stanley) inquired whether there was a pull-forward in third quarter demand and how tariffs might affect future quarters. Discenza said there was no evidence of demand being pulled forward and reiterated that pricing and mitigation strategies should offset incremental tariff impacts by 2026.
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David Raso (Evercore) pressed for details on fourth quarter organic declines by segment and the outlook for industrial distribution and renewables. Discenza explained both segments face declines, with Industrial Motion more affected, while renewables—driven by wind—remain a growth opportunity.
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Stephen Volkmann (Jefferies) questioned the application of the 80/20 portfolio review and potential exits from less profitable businesses. CEO Lucian Boldea confirmed this review is underway and that the remaining automotive business is being addressed, with plans to double down on high-margin areas.
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Kyle Menges (Citigroup) asked about the sustainability of EMEA growth and margin momentum into next year. Discenza said EMEA growth partly reflects easier comparisons and new business wins in rail and off-highway, while margin momentum is expected to continue with cost savings and pricing benefits.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will track (1) progress on the 80/20 portfolio review, especially any divestitures or restructurings in lower-margin automotive businesses; (2) the pace of integration and geographic expansion of acquired businesses, particularly in high-growth end markets; and (3) the effectiveness of pricing actions and cost mitigation strategies in offsetting tariff pressures. Additional focus will be on free cash flow conversion and the company’s ability to leverage a potential recovery in industrial demand.
Timken currently trades at $76.29, down from $77.21 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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