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TimkenSteel (TMST) Earnings and Sales Surpass Estimates in Q2

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TimkenSteel Corporation logged profits of $54 million or 98 cents per share in second-quarter 2021 against a loss of $15.3 million or 34 cents in the year-ago quarter.

Barring one-time items, adjusted earnings per share were 96 cents, which topped the Zacks Consensus Estimate of 62 cents.

Sales climbed around 113% year over year to $327.3 million in the quarter, aided by improved industrial and automotive demand as well as higher average raw material surcharge per ton. The figure surpassed the Zacks Consensus Estimate of $326.4 million.

The company witnessed sustained strength in most of its end markets during the quarter notwithstanding semiconductor-related customer outages that slowed automotive shipments. It benefited from strong pricing and cost discipline in the reported quarter.

 

Timken Steel Corporation Price, Consensus and EPS Surprise

 

Timken Steel Corporation Price, Consensus and EPS Surprise

Timken Steel Corporation price-consensus-eps-surprise-chart | Timken Steel Corporation Quote

 

Operating Figures

Ship tons rose 97% year over year to 214,200 in the quarter. The upside was driven by higher automotive and industrial shipments.

Manufacturing costs improved sequentially and year over year mainly driven by increased melt utilization and the impact of systemic cost-reduction actions.

Financials

At the end of the reported quarter, the company had cash and cash equivalents of $115.2 million, up around 53% year over year. TimkenSteel settled its $40.2 million convertible debt obligation due on Jun 1, 2021 with the issuance of 113,000 shares and payment of $38.9 million in cash during the quarter.

The company generated $39.2 million in operating cash flow in the quarter.

Outlook

Moving ahead, TimkenSteel sees third-quarter ship tons to be similar to second-quarter levels factoring in continued strength in end market demand. Its order book is full for the balance of 2021. The company also noted that periodic automotive customer manufacturing outages due to the chip shortage may impact automotive shipments in the third quarter.

The company also expects capital expenditures to be in the band of $15-$20 million in 2021.

Price Performance

Shares of TimkenSteel have shot up 294.4% in the past year compared with 130.5% rise of the industry.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Zacks Rank & Key Picks

TimkenSteel currently carries a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , ArcelorMittal (MT - Free Report) and LyondellBasell Industries N.V. (LYB - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has a projected earnings growth rate of 455.7% for the current year. The company’s shares have surged around 160% in a year.

ArcelorMittal has an expected earnings growth rate of 1,731.2% for the current year. The company’s shares have shot up around 192% in the past year.

LyondellBasell has an expected earnings growth rate of around 254.6% for the current year. The company’s shares have gained roughly 46% in the past year.
 


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