Aug. 5, 2015
TimkenSteel Reports Quarterly Loss
TimkenSteel, Canton, Ohio, reported a net loss of $24.3 million during the company’s second quarter. The loss was a reversal of both the $25.2 million in earnings posted during the same quarter last year and the $6.9 million posted in the first quarter.
Net sales in the second quarter totaled $278.2 million, a 27.1 percent decrease from the same quarter in 2014 and down 28.4 percent from the first quarter. The company shipped 212,000 tons during the quarter, down 26.8 percent from the same quarter last year and 21.8 percent from the first quarter.
"Our second-quarter operating results reflect the impact of continued weakness in energy and some industrial end markets, which has our plants operating at below 50 percent melt utilization," Ward J. Timken, Jr., chairman, CEO and president, told investors and analysts during the company’s quarterly conference call.
Melt utilization was 47 percent for the quarter, compared with 76 percent in second-quarter 2014 and 66 percent in first-quarter 2015. Lower volumes and inventory reduction efforts affected melt utilization, increasing manufacturing costs, the company said.
In the company’s Energy and Distribution business, shipments fell almost 30 percent from the second quarter due to weaker oil and gas markets and lower distribution channel demand due to high inventory levels. Management forecasts another potential loss in the third quarter due to continuing issues with low melt utilization, weak energy markets and customer inventory reductions.
Timken projects 2015 capital spending of $75-85 million, down from $80-90 million.