The recent earnings report from the Timken Company for Q1 of 2024 showed an adjusted EPS of $1.77, surpassing the Zacks Consensus Estimate of $1.50. Despite this positive result, the company experienced a 15% decline in bottom-line compared to the same period in the previous year. Additionally, total revenues dropped by 5.7% to $1.19 billion in Q1 2024 from Q1 2023. These decreases were attributed to low demand and unfavorable foreign currency translation.

Costs, Margins, and Segment Performances

In terms of costs, the cost of sales decreased by 6.3% to $792.7 million from the previous year. Gross profit also saw a decline of 5.6% year-over-year to $397.6 million, with a gross margin of 33.4% as opposed to 30% in Q1 2023. Selling, general, and administrative expenses increased by 2% year-over-year to $190.7 million. Adjusted EBITDA dropped by 7.2% year-over-year to $246 million, with an adjusted EBITDA margin of 20.7%.

Segment Performances

The revenues of the Engineered Bearings segment went down by 10.9% year-over-year to $802.5 million, primarily due to weak demand and unfavorable foreign currency translation. On the other hand, the Industrial Motion segment saw a 7% increase in revenues year-over-year to $389 million, driven by higher pricing and the benefits of acquisitions.