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The Timken Company Comments on Third Quarter Outlook

18 September 2000

The Timken Company Comments on Third Quarter Outlook

    CANTON, Ohio, Sept. 18 The Timken Company said
today that while sales and earnings for the first half of 2000 were higher
than 1999 levels, it expects third-quarter earnings to be significantly lower
than the most recent second quarter and below the third quarter of 1999.
    (Photo:  http://www.newscom.com/cgi-bin/prnh/19991012/TKRLOGO )
    One factor affecting the third quarter is the strength of the U.S. dollar
versus many currencies, which has negatively affected margins.  By last week,
the Euro had dropped 15 percent in 2000 against the U.S. dollar, hurting sales
and margins of products exported from the United States and the United Kingdom
to Continental Europe.  Also, the drop in the Euro has enabled European
producers, especially steel manufacturers, to export into North America with
lower prices, which has put pressure on prices and operating margins.  Since
its introduction in 1999, the Euro has devalued 26 percent against the U.S.
dollar.
    Another factor is the automotive market, which has begun to slow down in
North America, yet is requiring exceptional manufacturing and export measures
to meet strong customer needs in Europe.  Additionally, the recovery in
industrial markets that began in the fourth quarter of 1999 has been level for
the last four months.
    The company expects sales for the second half of 2000 to equal or surpass
sales in the second half of 1999.  Income in the second half of 2000 is
expected to be lower than the second half of 1999, excluding special
adjustments.  These adjustments include previously announced restructuring
charges in 2000 related to the company's global restructuring program to
reduce costs and position the company for profitable growth, as well as a LIFO
inventory adjustment that increased after-tax income in the fourth quarter of
1999 by $7.5 million.
    Final results for the third quarter are expected to be released on
Tuesday, October 17, 2000.  This will be followed by a conference call and
live webcast, scheduled for 1 p.m. that day at http://www.timken.com .
The Timken Company is a leading international manufacturer of highly
engineered bearings, alloy and specialty steels with operations in 24
countries.  The company employs about 21,000 people worldwide and reported
1999 sales of U.S. $2.5 billion.