TimkenSteel Corp (TMST) Reports Q3 2023 Earnings: Net Sales of $354. ...
TimkenSteel Corp (NYSE:TMST) reported Q3 2023 net sales of $354.2 million, a slight decrease from Q2 2023's $356.6 million.
The company posted a net income of $24.8 million, compared to a net loss of $13.3 million in the same quarter last year.
Operating cash flow stood at $28.1 million, with cash and cash equivalents of $225.4 million at the end of September.
The company deployed $17.5 million of cash for capital expenditures and $7.7 million to repurchase common shares.
On November 2, 2023, TimkenSteel Corp (NYSE:TMST), a leader in high-quality specialty steel, announced its third-quarter 2023 results. The company reported net sales of $354.2 million and net income of $24.8 million, or $0.51 per diluted share. On an adjusted basis, third-quarter 2023 net income was $24.9 million, or $0.52 per diluted share, and adjusted EBITDA was $46.8 million.
Performance Overview
Compared to the second quarter of 2023, net sales decreased by one percent, primarily due to a market decline in average raw material surcharge revenue per ton and lower shipments. However, compared to the third quarter of 2022, net sales increased, driven primarily by higher base sales prices and shipments.
Ship tons of 175,800 decreased 1,700 tons sequentially, or one percent, driven by lower energy shipments, partially offset by higher industrial shipments. Compared with the prior-year third quarter, ship tons increased 11 percent as a result of higher shipments in industrial and mobile.
Financial Summary
As of September 30, 2023, the companys cash and cash equivalents balance was $225.4 million. In the third quarter, operating cash flow was $28.1 million, primarily driven by profitability. Additionally, the company invested $17.5 million in capital expenditures. Total liquidity was $519.1 million as of September 30, 2023.
In the third quarter, the company repurchased approximately 352,900 common shares in the open market at an aggregate cost of $7.7 million. As of September 30, 2023, the company had $44.5 million remaining on its existing share repurchase program.
Outlook
Given the elements outlined in the outlook, the company expects adjusted EBITDA to decline sequentially in the fourth quarter of 2023. Fourth quarter shipments are expected to be sequentially lower as a result of normal seasonality and potential volatility from the automotive work stoppages and restarts. Operating cash flow is expected to be positive in the fourth quarter, primarily driven by anticipated profitability and working capital discipline.
Conclusion
Despite facing market challenges such as the automotive work stoppages, TimkenSteel Corp (NYSE:TMST) has demonstrated resilience and adaptability, delivering solid profitability and positive operating cash flow. The company's commitment to safety and strengthening its culture, along with its strategic capital allocation, have contributed to its financial performance in Q3 2023.
Explore the complete 8-K earnings release (here) from TimkenSteel Corp for further details.
This article first appeared on GuruFocus.
