TimkenSteel Corporation TMST recorded a profit of $24.8 million or 51 cents per share in third-quarter 2023, compared with a loss of $13.3 million or 29 cents in the year-ago quarter.

Barring one-time items, adjusted earnings were 52 cents for the quarter, missing the Zacks Consensus Estimate of 53 cents.

Sales rose around 12% year over year to $354.2 million in the quarter. The figure beat the Zacks Consensus Estimate of $352.7 million. The top line was driven by higher base sales prices and shipments, which more than offset a decline in surcharge revenue per ton.

Timken Steel Corporation Price, Consensus and EPS Surprise

Timken Steel Corporation price-consensus-eps-surprise-chart | Timken Steel Corporation Quote

Operating Figures

Ship tons rose 11% year over year to 175,800 in the quarter. The upside was driven by increased shipments in industrial and mobile.

Manufacturing costs decreased year over year due to improved cost absorption.

End-Market Highlights

Net sales in Industrial rose around 19% year over year to $173.7 million in the reported quarter. It was above the consensus estimate of $158 million.

Net sales in Mobile rose around 8% year over year to $140.1 million. It was above the consensus estimate of $139 million.

Net sales in Energy declined around 1% year over year to $35.6 million. It was below the consensus estimate of $43.2 million.

Financials

At the end of the quarter, the company had cash and cash equivalents of $225.4 million, up around 2% sequentially.

The company generated $28.1 million in operating cash flow in the quarter, down roughly 40% year over year.

Outlook

Moving ahead, TimkenSteel anticipates adjusted EBITDA to decline sequentially in the fourth quarter. It expects shipments to decline sequentially in the fourth quarter due to normal seasonality and potential volatility from the automotive work stoppages and restarts. The company also expects base price per ton to remain strong in the quarter. Surcharge revenue per ton is forecast to be lower sequentially in the fourth quarter.

The company also expects capital expenditures to be around $50 million in 2023.

Price Performance

Shares of TimkenSteel are up 11.9% in the past year compared with the 12.9% rise of the industry.

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Zacks Rank & Key Picks

TMST currently has a Zacks Rank #3 (Hold).

Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation CRS, Axalta Coating Systems Ltd. AXTA and The Andersons Inc. ANDE.

The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $3.57, indicating year-over-year growth of 213.2%. CRS beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have surged 70% in the past year. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, the Zacks Consensus Estimate for Axalta Coating Systems’ current  year has been revised upward by 8.2%. AXTA, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in three of the last four quarters while missing in one quarter, with the average earnings surprise being 6.7%. The company’s shares have gained 3% in the past year. The company’s shares have gained 20% in the past year.

Andersons currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for ANDE's current-year earnings has been revised 8.6% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.8%, on average. ANDE shares have rallied around 42% in a year.

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