Moody's: Timken view positive

Moody's Investors Service said it revised the outlook on the Timken Co. to positive from stable and affirmed the corporate family rating and $300 million medium-term notes, series A, at Ba1.

The agency said the outlook change reflects improvements in the company's operating performance and leverage and Moody's view that the company's margin volatility may have been reduced as a result of the business transformation initiatives it has pursued in the past few years.

Timken's ratings reflect its market position as a leading producer of tapered roller and needle bearings, its well-regarded reputation and its long operating history, the agency said, along with its moderate leverage and reduced pension underfunding.

The ratings also incorporate Moody's concern over the ongoing poor operating performance of Timken's automotive segment, low operating margins and modest free cash flow, which the agency said is due in part to elevated capital expenditures in support of growth initiatives, working capital pressures and pension contributions.

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