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Timken (TKR) Inks Bearings Supply Deal to Expand Wind Energy
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The Timken Company (TKR - Free Report) is joining forces with GE Renewable Energy to supply main shaft bearings for its Haliade-X, the world's most powerful offshore wind turbine.
Each Haliade-X turbine will have a capacity of up to 14 MW and be able to generate clean energy of up to 74 GWh annually. The first phase of Haliade-X installations is planned to start in 2023.
This contract will enhance Timken’s wind energy market, primarily focusing on turbine technology. The company’s technical expertise and engineering innovation aid turbine producers like GE in expanding renewable energy.
Initially, Timken cooperated with GE on a wind project to supply the bearings used for Haliade 1, the 6 MW precursor to Haliade-X.
In the past three years, the company has been focused on building its renewable energy portfolio through innovation and acquisitions. In 2021, Timken achieved double-digit revenue growth in the renewable energy market for the fourth consecutive year. Renewable energy is Timken’s largest individual end-market sector generating 12% of sales in 2021 compared with only 5% in 2018. The global demand for renewable energy is expected to witness a CAGR of around 8% over the next 10 years. The share of electricity generation from renewable is expected to more than double by 2030.
The company witnessed record sales in wind energy last year and will continue to gain from this momentum in the years to come. In the last five years, Timken wind energy sales have grown at more than double the CAGR for the global wind energy market during the same time frame. As global demand for equipment and services for the growing wind energy market increases, the company is poised to capitalize on this trend. The company is focused on targeted investments in this sector and making it a bigger part of its portfolio in the future. Timken announced that it would make capital investments of more than $75 million through early 2022 to expand its renewable energy business.
Timken expects higher demand across most end markets in the current year. It anticipates total revenues to be up around 8% in 2022 from 2021 levels. Both Mobile and Process Industries segments are anticipated to be up double-digits organically. Adjusted earnings per share for the year are expected to be between $5.00 and $5.40. The mid-point of the guided range indicates year-over-year growth of 10%. Apart from strong demand, earnings growth will be supported by benefits from price realization and growth initiatives. The ongoing supply chain challenges and inflationary cost pressure will likely be offset by significant price realization and operational excellence initiatives.
Price Performance
In the past three months, shares of Timken have gained 3.3% compared with the industry’s decline of 2.4%.
Graphic Packaging has an estimated earnings growth rate of 86.8% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 7.6%.
Graphic Packaging pulled off a trailing four-quarter earnings surprise of 7.2%, on average. The company’s shares have appreciated 14.8% in a year.
Myers Industries has an expected earnings growth rate of 67% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 27% in the past 60 days.
MYE has a trailing four-quarter earnings surprise of 20.1%, on average. Myers Industries’ shares have gained 13% in the past year.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year’s earnings rose 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. Packaging Corporation’s shares have gained 4% in the past year.
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Timken (TKR) Inks Bearings Supply Deal to Expand Wind Energy
The Timken Company (TKR - Free Report) is joining forces with GE Renewable Energy to supply main shaft bearings for its Haliade-X, the world's most powerful offshore wind turbine.
Each Haliade-X turbine will have a capacity of up to 14 MW and be able to generate clean energy of up to 74 GWh annually. The first phase of Haliade-X installations is planned to start in 2023.
This contract will enhance Timken’s wind energy market, primarily focusing on turbine technology. The company’s technical expertise and engineering innovation aid turbine producers like GE in expanding renewable energy.
Initially, Timken cooperated with GE on a wind project to supply the bearings used for Haliade 1, the 6 MW precursor to Haliade-X.
In the past three years, the company has been focused on building its renewable energy portfolio through innovation and acquisitions. In 2021, Timken achieved double-digit revenue growth in the renewable energy market for the fourth consecutive year. Renewable energy is Timken’s largest individual end-market sector generating 12% of sales in 2021 compared with only 5% in 2018. The global demand for renewable energy is expected to witness a CAGR of around 8% over the next 10 years. The share of electricity generation from renewable is expected to more than double by 2030.
The company witnessed record sales in wind energy last year and will continue to gain from this momentum in the years to come. In the last five years, Timken wind energy sales have grown at more than double the CAGR for the global wind energy market during the same time frame. As global demand for equipment and services for the growing wind energy market increases, the company is poised to capitalize on this trend. The company is focused on targeted investments in this sector and making it a bigger part of its portfolio in the future. Timken announced that it would make capital investments of more than $75 million through early 2022 to expand its renewable energy business.
Timken expects higher demand across most end markets in the current year. It anticipates total revenues to be up around 8% in 2022 from 2021 levels. Both Mobile and Process Industries segments are anticipated to be up double-digits organically. Adjusted earnings per share for the year are expected to be between $5.00 and $5.40. The mid-point of the guided range indicates year-over-year growth of 10%. Apart from strong demand, earnings growth will be supported by benefits from price realization and growth initiatives. The ongoing supply chain challenges and inflationary cost pressure will likely be offset by significant price realization and operational excellence initiatives.
Price Performance
In the past three months, shares of Timken have gained 3.3% compared with the industry’s decline of 2.4%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Timken currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector are Graphic Packaging Holding Company (GPK - Free Report) , Myers Industries (MYE - Free Report) and Packaging Corporation of America (PKG - Free Report) . While GPK & MYE flaunt a Zacks Rank #1 (Strong Buy), PKG carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Graphic Packaging has an estimated earnings growth rate of 86.8% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 7.6%.
Graphic Packaging pulled off a trailing four-quarter earnings surprise of 7.2%, on average. The company’s shares have appreciated 14.8% in a year.
Myers Industries has an expected earnings growth rate of 67% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 27% in the past 60 days.
MYE has a trailing four-quarter earnings surprise of 20.1%, on average. Myers Industries’ shares have gained 13% in the past year.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year’s earnings rose 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. Packaging Corporation’s shares have gained 4% in the past year.