CANTON, Ohio (AP) - The Timken Co. said on Thursday that it plans to cut up to 500 jobs in its automotive group amid worries about a slowdown in light vehicle production in North America and higher raw material costs.
"While we are seeing strong industrial markets, automotive markets continue to be challenging," said James W. Griffith, president and chief executive of Timken, which also reported second-quarter earnings that more than doubled from a year ago.
Timken's Automotive Group, which makes bearings and related products for the auto industry, has 10 plants in the United States and 13 in other countries, with about 11,000 employees overall. The company said it will specify 400 to 500 job cuts during the third quarter.
Griffith told analysts on a conference call that the company's intention is to reduce fixed costs by $40 million a year.
Timken has automotive plants in Cairo, Dahlonega and Sylvania in Georgia; Clinton, Gaffney and Walhalla in South Carolina; Iron Station, N.C.; Altavista, Va.; Watertown, Conn., and Bucyrus, Ohio.
Internationally, the group's plants are in Canada, France, Germany, the Czech Republic, Poland, Brazil, and China.
Helped by strong demand, the bearings and steel alloys company earned $67.3 million, or 73 cents per share, in the second quarter ended June 30, up from $25.3 million, 28 cents per share, a year ago.
Excluding one-time charges, earnings were 77 cents per share.
Analysts surveyed by Thomson Financial expected earnings of 61 cents per share.
Sales totaled $1.3 billion, up 17 percent compared with $1.1 billion in the same period last year.
The company said it expects full-year earnings of $2.40 to $2.55 per share, up from its previous guidance of $2.05 to $2.20 per share. Timken said the outlook reflects strong industrial markets, benefiting its industrial and steel groups.
For the first half of 2005, Timken earned $125.6 million, or $1.37 per share, compared with $53.8 million, or 60 cents per share.
Sales were $2.6 billion, up increase of 18 percent from $2.2 billion a year ago.
Timken shares on the New York Stock Exchange rose a penny to $26.90 in trading Thursday afternoon. The shares have traded within a 52-week range of $22.50 to $29.50.
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