Whitworth Target Timken Falls Most in 15 Months on Forecast

Timken Co., 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 13 percent to close at $52.45 in New York, the biggest decline since July 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.

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