Timken (TKR) Buys Rosa Sistemi to Boost Linear Motion Offerings
The Timken Company TKR has announced that it acquired Rosa Sistemi S.p.A. — a Europe-based designer and manufacturer of roller guideways, linear bearings, customized linear systems and actuators, commercialized ball guideways, and precision ball screws.
Rosa Sistemi's roller guides and customized actuators product line and Timken’s Rollon, Nadella and Intelligent Machine Solutions (iMS) linear motion product offerings are highly complementary. This acquisition offers Timken attractive operational efficiencies, as well as geographical expansion potential.
Headquartered in Milan, Italy, Rosa Sistemi serves customers in a variety of end markets, including automation and machine tools. It currently employs 65 people and is expected to generate $15 million in revenues in 2023.
Timken used its cash on hand to fund the transaction.
The company joined the linear motion space in 2018 when it acquired Rollon, a leading manufacturer of linear guides, telescopic rails, and linear actuators and systems utilized in a wide range of industrial and commercial applications. Timken acquired iMS in 2021 and Nadella Group in early 2023 to further expand and strengthen its position in the attractive linear motion space.
The company continues to grow its highly profitable linear motion product line as it expects a strong revenue CAGR for linear motion through 2025.
Timken reported record adjusted earnings per share of $2.01 in second-quarter 2023, missing the Zacks Consensus Estimate of $2.07. The bottom line increased 13% year over year.
Total revenues in the quarter were a record $1,272 million, up 10.3% from the year-ago quarter. The upside can be attributed to strong organic growth in both segments, as well as the favorable impacts of acquisitions, partly offset by unfavorable currency. However, the top line missed the Zacks Consensus Estimate of $1,288 million.
Price Performance
In the past year, Timken’s shares have gained 13.5% compared with the industry’s 14.9% growth.
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Zacks Rank and Key Picks
Timken currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Caterpillar Inc. CAT, Astec Industries, Inc. ASTE and Eaton Corporation plc. ETN. CAT and ASTE sport a Zacks Rank #1 (Strong Buy), and ETN has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Caterpillar has an average trailing four-quarter earnings surprise of 18.5%. The Zacks Consensus Estimate for CAT’s 2023 earnings is pegged at $19.81 per share. The consensus estimate for 2023 earnings has moved north by 11.4% in the past 60 days. Its shares gained 51.6% in the last year.
Astec has an average trailing four-quarter earnings surprise of 20%. The Zacks Consensus Estimate for ASTE’s 2023 earnings is pegged at $2.81 per share. The consensus estimate for 2023 earnings has moved 4% north in the past 60 days. ASTE’s shares gained 22.8% in the last year.
The Zacks Consensus Estimate for Eaton’s 2023 earnings per share is pegged at $8.80. The consensus estimate for 2023 earnings has moved 4% north in the past 60 days. It has a trailing four-quarter average earnings surprise of 3%. Shares of ETN rallied 68.8% in the last year.
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