Timken Company (TKR) Q2 2026 earnings summary

Executive summary

• Sales reached $1.26 billion in Q2 2026, up 7.5% year-over-year, driven by higher volumes, pricing, acquisitions, and favorable currency effects.

• Adjusted EBITDA margin improved to 19.6% from 17.7% year-over-year; adjusted EPS rose nearly 29% to $1.83, while reported EPS fell to $0.41 due to a $94.4 million impairment charge related to the belts business divestiture.

• Net income attributable to shareholders fell 63.2% to $28.9M for Q2, mainly due to higher impairment and restructuring charges.

• Advanced strategic priorities, including the Elevate to Outperform strategy, portfolio optimization, and focus on high-growth verticals.

• Major events included the acquisition of Bijur Delimon and a definitive agreement to sell the belts business, both impacting the Industrial Motion segment.

Financial highlights

• Net sales grew to $1,261M from $1,173M YOY (+7.5%); organic sales grew 4.4%.

• Adjusted EBITDA increased to $247M from $208M YOY; margin improved from 17.7% to 19.6%.

• Adjusted EPS rose to $1.83 from $1.42 YOY; reported GAAP EPS was $0.41.

• Free cash flow for Q2 was $80.5M; operating cash flow was $107M.

• Net leverage ended at 2x; net debt to adjusted EBITDA at 2.0x as of June 30, 2026.

Outlook and guidance

• Full-year 2026 net sales outlook raised to 5%-6% growth; organic revenue expected up 3.5% at midpoint.

• Adjusted EPS guidance increased to $6.05-$6.35, up $0.20 at midpoint; adjusted EBITDA margin expected in low 18% range.

• Free cash flow guidance raised to $375-$400 million for 2026.

• Guidance includes the belts business, with divestiture expected in Q3 and related impairment charges impacting GAAP results.

• Operating cash flow guidance for 2026 is $550M, with capital expenditures at approximately 3.3% of sales.