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Timken Expands Its Automation Portfolio With Acquisition of CGI
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The Timken Company (TKR - Free Report) declared that it completed its previously announced acquisition of CGI, Inc. The acquisition of CGI will strengthen TKR's position as an international player in automation and robotics solutions.
On Aug. 5, 2024, Timken revealed that it signed a deal to acquire CGI. TKR funded the deal using cash on hand and existing committed credit facilities.
CGI's Portfolio Complements Timken
CGI, founded in 1967, is a family-owned company with a compelling product portfolio, a strong presence in high-growth medical applications and cutting-edge production. This makes CGI an ideal strategic fit for Timken, aligning with its 125-year history of innovation.
With its headquarters and production facilities in Carson City, NV, CGI employs around 130 people. It is projected to achieve $45 million in revenues in 2024, further solidifying Timken’s expanding portfolio.
TKR’s Previous Acquisitions Bode Well
The company acquired Cone Drive in 2018, which marked its foray into the precision drives market. In 2022, Timken acquired Spinea. TKR's industrial motion capabilities increased with these two deals.
Buying Cone Drive and Spinea helped Timken grow its automation business, which became the company's second-largest individual end-market in 2023. The company is focused on diversifying and expanding its capabilities in industrial motion.
Timken Q2 Top Line Declines Y/Y
TKR reported adjusted earnings per share of $1.63 for the second quarter of 2024, which marked an 18.9% year-over-year decline. However, the bottom line beat the Zacks Consensus Estimate of $1.60. The company recorded year-over-year declines in its top and bottom lines, reflecting significantly lower renewable energy demand in China.
Total revenues in the quarter were $1.182 billion, down 7.1% from the year-ago quarter. The top line beat the Zacks Consensus Estimate of $1.180 billion.
TKR Sees Lesser Share Price Appreciation Than Its Industry
In the past year, TKR shares have gained 11.1% compared with the industry’s 28.3% growth.
The Zacks Consensus Estimate for Crane’s 2024 earnings is pegged at $5.07 per share. The consensus estimate for 2024 earnings has moved north by 6% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 11.2%. CR shares have gained 75.2% in a year.
Flowserve has an average trailing four-quarter earnings surprise of 18.2%. The Zacks Consensus Estimate for FLS’ 2024 earnings is pinned at $2.76 per share, which indicates year-over-year growth of 31.6%. The consensus estimate for 2024 earnings has moved north by 4% in the past 60 days. The company’s shares have gained 27.5% in a year.
The Zacks Consensus Estimate for Cintas’ 2024 earnings is pegged at $16.64 per share. The consensus estimate for 2024 earnings has moved north by 1% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 4%. CTAS shares have gained 60.4% in a year.
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Timken Expands Its Automation Portfolio With Acquisition of CGI
The Timken Company (TKR - Free Report) declared that it completed its previously announced acquisition of CGI, Inc. The acquisition of CGI will strengthen TKR's position as an international player in automation and robotics solutions.
On Aug. 5, 2024, Timken revealed that it signed a deal to acquire CGI. TKR funded the deal using cash on hand and existing committed credit facilities.
CGI's Portfolio Complements Timken
CGI, founded in 1967, is a family-owned company with a compelling product portfolio, a strong presence in high-growth medical applications and cutting-edge production. This makes CGI an ideal strategic fit for Timken, aligning with its 125-year history of innovation.
With its headquarters and production facilities in Carson City, NV, CGI employs around 130 people. It is projected to achieve $45 million in revenues in 2024, further solidifying Timken’s expanding portfolio.
TKR’s Previous Acquisitions Bode Well
The company acquired Cone Drive in 2018, which marked its foray into the precision drives market. In 2022, Timken acquired Spinea. TKR's industrial motion capabilities increased with these two deals.
Buying Cone Drive and Spinea helped Timken grow its automation business, which became the company's second-largest individual end-market in 2023. The company is focused on diversifying and expanding its capabilities in industrial motion.
Timken Q2 Top Line Declines Y/Y
TKR reported adjusted earnings per share of $1.63 for the second quarter of 2024, which marked an 18.9% year-over-year decline. However, the bottom line beat the Zacks Consensus Estimate of $1.60. The company recorded year-over-year declines in its top and bottom lines, reflecting significantly lower renewable energy demand in China.
Total revenues in the quarter were $1.182 billion, down 7.1% from the year-ago quarter. The top line beat the Zacks Consensus Estimate of $1.180 billion.
TKR Sees Lesser Share Price Appreciation Than Its Industry
In the past year, TKR shares have gained 11.1% compared with the industry’s 28.3% growth.
Image Source: Zacks Investment Research
Timken’s Zacks Rank & Stocks to Consider
TKR currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Crane Company (CR - Free Report) , Flowserve Corporation (FLS - Free Report) and Cintas Corporation (CTAS - Free Report) . These three companies have a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Crane’s 2024 earnings is pegged at $5.07 per share. The consensus estimate for 2024 earnings has moved north by 6% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 11.2%. CR shares have gained 75.2% in a year.
Flowserve has an average trailing four-quarter earnings surprise of 18.2%. The Zacks Consensus Estimate for FLS’ 2024 earnings is pinned at $2.76 per share, which indicates year-over-year growth of 31.6%. The consensus estimate for 2024 earnings has moved north by 4% in the past 60 days. The company’s shares have gained 27.5% in a year.
The Zacks Consensus Estimate for Cintas’ 2024 earnings is pegged at $16.64 per share. The consensus estimate for 2024 earnings has moved north by 1% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 4%. CTAS shares have gained 60.4% in a year.