Why Is Timken (TKR) Up 3.4% Since Last Earnings Report?

It has been about a month since the last earnings report for Timken (TKR). Shares have added about 3.4% in that time frame, outperforming the S&P 500.But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Timken due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Timken Company (The) before we dive into how investors and analysts have reacted as of late.Timken’s Q3 Earnings Beat Estimates, Increases 11% Y/YTimken reported third-quarter 2025 adjusted earnings per share (EPS) of $1.37, which beat the Zacks Consensus Estimate of $1.25. The bottom line marked an 11.4% year-over-year growth on favorable pricing and foreign currency translation, and the benefit of the CGI acquisition, which offset weak demand in the Industrial Motion segment.On a reported basis, the company delivered earnings of 99 cents per share compared with $1.16 in the prior-year quarter.Total revenues were $1.157 billion, up 2.7% from the year-ago quarter. The top line beat the Zacks Consensus Estimate of $1.125 billion.Organically, sales were up 0.6% as lower demand in the Industrial Motion segment offset improvement in the Engineered Bearings segment. Currency translation had a favorable impact of 1.1% and the contribution from acquisitions was 1%.Timken Reports Higher ProfitsThe cost of sales increased 3% to $808 million from the prior-year quarter. The gross profit rose 1.3% year over year to $349 million. The gross margin was 30.2% compared with 30.3% in the year-ago quarter.Selling, general and administrative expenses were down 1.7% year over year to $186.4 million. Operating income fell 4.7% year over year to $139 million. Adjusted EBITDA increased 6.2% year over year to $601.2 million. The adjusted EBITDA margin was 17.4%, a 50-basis point expansion from the prior-year quarter.Timken’s Segment Performances in Q3The Engineered Bearings segment’s revenues were up 3.4% year over year to $766 million on higher renewable energy demand, improved pricing and positive foreign currency impact.The segment’s adjusted EBITDA was $144 million, 4% higher than the year-ago quarter. Gains from favorable price/mix, lower material & logistics costs and higher volumes were offset by incremental tariff costs and unfavorable impact from foreign currency.The Industrial Motion segment’s revenues rose 1.3% year over year to $391 million. Contribution from CGI acquisition, higher pricing and favorable currency impact were somewhat offset by lower services revenue and renewable energy demand.The segment’s adjusted EBITDA was $74.5 million, a 0.4% uptick from the third quarter of 2024. The decline was due to lower volume, tariff impacts and higher material and logistics costs offset by the favorable price/mix, lower SG&A expenses and the benefit of the CGI acquisition.TKR’s Cash Flow & Balance Sheet UpdatesTimken ended the third quarter of 2025 with cash and cash equivalents of $449 million compared with $373 million at the end of 2024. Cash flow from operating activities was $201 million in the quarter compared with $123 million in the prior year quarter. The long-term debt as of Sep. 30, 2025, was $2.09 billion, up from $2.05 billion as of Dec. 31, 2024. Net debt to adjusted EBITDA was 2.1 as of the end of the third quarter of 2025, within its target of 1.5-2.5.Timken Tweaks 2025 GuidanceFor 2025, Timken expects total revenues to decline 0.75% at the midpoint. The company anticipates adjusted EPS to be between $5.20 and $5.30, updated from the previously stated $5.10 -$5.40. The midpoint of the range indicates a year-over-year decline of 9%.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.The consensus estimate has shifted -6.92% due to these changes.VGM ScoresAt this time, Timken has a average Growth Score of C, a score with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of B on the value side, putting it in the top 40% for value investors.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Timken has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Timken Company (The) (TKR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks