Timken Company (NYSE:TKR) is the world's largest manufacturer of tapered roller bearings and alloy seamless mechanical steel tubing, though it also makes other bearings and steel alloys for industries ranging from defense to oilfield services to wind energy. Timken competes in the machine tools & accessories oligopoly with Stanley Works (SWK) and Kennametal (KMT), but is unique from these companies in that it can manufacture steel bars with one inch diameters and cylindrical roller bearings with diameters as large as 12 inches, making its product line useful to more industrial projects. The company earned $3.1 billion in revenue but incurred a $134 million loss in 2009.^[1]

Timken has been pressured by slumps in the American housing and automotive markets, which have historically been TKR's biggest customers. In response, Timken has expanded internationally, especially in India and China, with annual sales in each country increasing 20% and 30%, respectively. Also, TKR has developed its aerospace and energy product lines to reduce dependence on automobile products, through acquisitions and new facilities. Aerospace and process industry sales have increased 38.6% and 25.4%, respectively. Rising steel and oil prices increase TKR total costs, but the company avoids decreasing margins because these commodities also increases demand for Timken Process Industries products. For example, rising steel prices causes greater demand for TKR's heavy bearings, which are used in rolling mills to make steel more efficiently.

(Read more at Wikinvest )