Timken Company (TKR) Q2 2026 earnings summary

Executive summary

• Q2 2026 sales rose 7.5% year-over-year to $1.26 billion, with organic growth of 4.4%, driven by higher volumes, pricing, acquisitions, and favorable currency effects.

• Adjusted EBITDA margin improved to 19.6% from 17.7% year-over-year, and adjusted EPS increased nearly 29% to $1.83, supported by operational execution and an $8 million net benefit from IEEPA tariff refunds.

• Reported GAAP EPS fell to $0.41 due to a $94.4 million impairment and restructuring charge related to the planned divestiture and closure of the belts business.

• Advanced strategic priorities, including portfolio optimization, focus on high-growth verticals, and integration of the Bijur Delimon acquisition.

• Continued progress on the Elevate to Outperform strategy and announced new executive roles to enhance execution.

Financial highlights

• Q2 revenue reached $1.26 billion, up 7.5% year-over-year; organic sales up 4.4%.

• Adjusted EBITDA was $247 million (19.6% of sales), up from 17.7% last year; adjusted EPS for Q2 was $1.83.

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

• Returned $45 million to shareholders via buybacks and dividends; quarterly dividend increased by 3%.

• Net income margin declined to 2.3% from 6.7% year-over-year, impacted by non-recurring impairment charges.

Outlook and guidance

• Raised 2026 net sales outlook to 5%-6% growth, with organic revenue up 3.5% at midpoint.

• Adjusted EPS guidance increased to $6.05-$6.35, up $0.20 at midpoint; GAAP EPS outlook $3.75–$4.05.

• 2026 adjusted EBITDA margin expected in the low 18% range, up from 17.4% in 2025.

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

• Guidance includes the belts business, with divestiture expected in Q3.