CANTON, Ohio, Jan 22 (Reuters) - Ball-bearing maker Timken Co. reported a quarterly profit Wednesday thanks to cost cutting and strong automotive demand.
The Canton, Ohio, company said fourth-quarter net income rose to $36.5 million, or 57 cents a share, from $1.2 million, or 2 cents a share, in the year-earlier period.
Before items, earnings were 19 cents a share. On this basis, analyst estimates ranged from 16 to 22 cents a share, with an average forecast of 18 cents, according to market tracker Thomson First Call.
Sales rose 12 percent, to $644.9 million from $573.6 million a year earlier, with all three of Timken's units showing increases.
Automotive bearings recorded the largest increase, with sales up almost 14 percent to $210.8 million. That helped reverse a year-earlier loss, with profit of $11.6 million before interest and taxes.
Timken said the division benefited from cost controls, improved volumes, new product sales and a year-end inventory accounting adjustment.
Its industrial bearings business boosted sales by about 10 percent to $225.3 million. Earnings before interest and taxes more than doubled, to $13.8 million.
The company's steel business increased sales by more than 11 percent to $240.7 million. It also reversed a year-earlier loss, reporting earnings before interest and taxes of $200,000.
Timken said it expects the global automotive industry will be softer in 2003, while industrial markets should see some modest recovery over the course of the year.
It also said it contributed $106.4 million to its domestic pension plans during 2002, including $54.5 million of company common stock.
The company recorded a $401.6 million minimum pension liability increase, which reduced shareholders' equity -- a measure of a company's net worth -- by $254.3 million.
Timken said it lowered its assumption for the expected rate of return on plan assets to 8.75 percent from 9.5 percent and lowered its discount rate to 6.6 percent from 7.5 percent. It said those moves are expected to increase its 2003 pretax pension expense by about $25 million.
The company's shares closed at $19.09 Tuesday on the New York Stock Exchange.