Whitworth Target Timken Falls Most in 15 Months on Forecast

Timken Co. (TKR), which last month agreed to spin off its steel unit amid pressure from investor Ralph Whitworth, fell the most in 15 months after cutting its full-year profit and sales forecasts.

The ball bearing-maker’s shares slumped 11 percent to $53.76 at 1:44 p.m. in New York after dropping to $52.75, the biggest intraday decline since July 26, 2012.

Chief Executive Officer James Griffith cited slower-than-expected global economic growth for the revised outlook and said third-quarter results were below the company’s forecasts, according to a statement today.

“The shortfall was significant,” Eli Lustgarten, an analyst at Longbow Securities in Independence, Ohio, said today in an interview. “They were overly optimistic in the way the company was expected to perform” given the stagnant demand in heavy manufacturing, he said.

Lustgarten has a buy rating on the shares.

Adjusted earnings per share this year will be $2.90 to $3.10, reduced from a previous range of $3.45 to $3.75. Analysts projected $3.62, the average of estimates compiled by Bloomberg. Third-quarter adjusted profit of 56 cents a share trailed the 88-cent average of 10 analysts’ estimates.

Sales this year will decline 13 percent, deeper than a prior outlook of a 10 percent drop, the Canton, Ohio-based company said.

Last month, Timken jumped to its highest price ever after agreeing to spin off its steel unit, dropping opposition to a plan pushed by Whitworth’s Relational Investors LLC. Griffith will step down as CEO once the division is split from the larger bearings and transmission business.

To contact the reporter on this story: Caroline Chen in New York at cchen509@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.