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International Markets and Timken (TKR): A Deep Dive for Investors
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Have you assessed how the international operations of Timken (TKR - Free Report) performed in the quarter ended June 2024? For this maker of bearings and power transmissions, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.
In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajectory. For investors, understanding a company's reliance on overseas markets has become increasingly crucial, as it offers insights into the company's sustainability of earnings, ability to tap into diverse economic cycles and overall growth potential.
Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.
While analyzing TKR's performance for the last quarter, we found some intriguing trends in revenues from its overseas segments that Wall Street analysts commonly model and monitor.
The company's total revenue for the quarter stood at $1.18 billion, declining 7.1% year over year. Now, let's delve into TKR's international revenue breakdown to gain insights into the significance of its operations beyond home turf.
Trends in TKR's Revenue from International Markets
During the quarter, Asia-Pacific excluding China contributed $130 million in revenue, making up 11.0% of the total revenue. When compared to the consensus estimate of $116.43 million, this meant a surprise of +11.66%. Looking back, Asia-Pacific excluding China contributed $143.1 million, or 12%, in the previous quarter, and $120.4 million, or 9.5%, in the same quarter of the previous year.
China generated $103.9 million in revenues for the company in the last quarter, constituting 8.8% of the total. This represented a surprise of +3.57% compared to the $100.32 million projected by Wall Street analysts. Comparatively, in the previous quarter, China accounted for $88 million (7.4%), and in the year-ago quarter, it contributed $179.4 million (14.1%) to the total revenue.
Projected Revenues in Foreign Markets
The current fiscal quarter's total revenue for Timken, as projected by Wall Street analysts, is expected to reach $1.13 billion, reflecting a decline of 1.3% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Asia-Pacific excluding China is anticipated to contribute 10% or $113.03 million and China 8.7% or $98.52 million.
For the entire year, the company's total revenue is forecasted to be $4.59 billion, which is a reduction of 3.7% from the previous year. The revenue contributions from different regions are expected as follows: Asia-Pacific excluding China will contribute 10.4% ($477.13 million) and China 8.3% ($380.01 million) to the total revenue.
The Bottom Line
The dependency of Timken on global markets for its revenues presents a mix of potential gains and hazards. Thus, monitoring the trends in its overseas revenues can be a key indicator for predicting the firm's future performance.
In an environment where global interconnections and geopolitical skirmishes are intensifying, Wall Street analysts keep a keen eye on these trends, particularly for firms with overseas operations, to adjust their earnings predictions. Moreover, a range of other aspects, including how a company fares in its home country, significantly affects these projections.
Here at Zacks, we put a great deal of emphasis on a company's changing earnings outlook, as empirical research has shown that's a powerful force driving a stock's near-term price performance. Quite naturally, the correlation is positive here -- an upward revision in earnings estimates drives the stock price higher.
The Zacks Rank, our proprietary stock rating mechanism, demonstrates a notable performance history confirmed through external audits. It effectively utilizes the power of earnings estimate revisions to act as a predictor of a stock's price performance in the near term.
Over the preceding four weeks, the stock's value has appreciated by 3.4%, against a downturn of 2.9% in the Zacks S&P 500 composite. In parallel, the Zacks Industrial Products sector, which counts Timken among its entities, has appreciated by 1%. Over the past three months, the company's shares have seen a decline of 11.2% versus the S&P 500's 5.9% increase. The sector overall has witnessed a decline of 2.6% over the same period.
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International Markets and Timken (TKR): A Deep Dive for Investors
Have you assessed how the international operations of Timken (TKR - Free Report) performed in the quarter ended June 2024? For this maker of bearings and power transmissions, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.
In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajectory. For investors, understanding a company's reliance on overseas markets has become increasingly crucial, as it offers insights into the company's sustainability of earnings, ability to tap into diverse economic cycles and overall growth potential.
Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.
While analyzing TKR's performance for the last quarter, we found some intriguing trends in revenues from its overseas segments that Wall Street analysts commonly model and monitor.
The company's total revenue for the quarter stood at $1.18 billion, declining 7.1% year over year. Now, let's delve into TKR's international revenue breakdown to gain insights into the significance of its operations beyond home turf.
Trends in TKR's Revenue from International Markets
During the quarter, Asia-Pacific excluding China contributed $130 million in revenue, making up 11.0% of the total revenue. When compared to the consensus estimate of $116.43 million, this meant a surprise of +11.66%. Looking back, Asia-Pacific excluding China contributed $143.1 million, or 12%, in the previous quarter, and $120.4 million, or 9.5%, in the same quarter of the previous year.
China generated $103.9 million in revenues for the company in the last quarter, constituting 8.8% of the total. This represented a surprise of +3.57% compared to the $100.32 million projected by Wall Street analysts. Comparatively, in the previous quarter, China accounted for $88 million (7.4%), and in the year-ago quarter, it contributed $179.4 million (14.1%) to the total revenue.
Projected Revenues in Foreign Markets
The current fiscal quarter's total revenue for Timken, as projected by Wall Street analysts, is expected to reach $1.13 billion, reflecting a decline of 1.3% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Asia-Pacific excluding China is anticipated to contribute 10% or $113.03 million and China 8.7% or $98.52 million.For the entire year, the company's total revenue is forecasted to be $4.59 billion, which is a reduction of 3.7% from the previous year. The revenue contributions from different regions are expected as follows: Asia-Pacific excluding China will contribute 10.4% ($477.13 million) and China 8.3% ($380.01 million) to the total revenue.
The Bottom Line
The dependency of Timken on global markets for its revenues presents a mix of potential gains and hazards. Thus, monitoring the trends in its overseas revenues can be a key indicator for predicting the firm's future performance.In an environment where global interconnections and geopolitical skirmishes are intensifying, Wall Street analysts keep a keen eye on these trends, particularly for firms with overseas operations, to adjust their earnings predictions. Moreover, a range of other aspects, including how a company fares in its home country, significantly affects these projections.
Here at Zacks, we put a great deal of emphasis on a company's changing earnings outlook, as empirical research has shown that's a powerful force driving a stock's near-term price performance. Quite naturally, the correlation is positive here -- an upward revision in earnings estimates drives the stock price higher.
The Zacks Rank, our proprietary stock rating mechanism, demonstrates a notable performance history confirmed through external audits. It effectively utilizes the power of earnings estimate revisions to act as a predictor of a stock's price performance in the near term.
Timken, bearing a Zacks Rank #3 (Hold), is expected to mirror the broader market's movements in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Exploring Recent Trends in Timken's Stock Price
Over the preceding four weeks, the stock's value has appreciated by 3.4%, against a downturn of 2.9% in the Zacks S&P 500 composite. In parallel, the Zacks Industrial Products sector, which counts Timken among its entities, has appreciated by 1%. Over the past three months, the company's shares have seen a decline of 11.2% versus the S&P 500's 5.9% increase. The sector overall has witnessed a decline of 2.6% over the same period.