Shares of Timken Slide After Downgrade

NEW YORK (AP) - Shares of bearing maker Timken Co trended downward on Thursday after an analyst downgraded the stock and trimmed earnings expectations, mostly because of production cutbacks among domestic automakers. The stock tumbled $1.21, or 3.5 percent, to $33.34 in afternoon trading on the New York Stock Exchange. The shares have shed 5.5 percent since hitting a 52-week high of 36.58 on Jan. 31. Eli Lustgarten, an analyst at Longbow Research, said present business conditions remain strong for the company in the near term,but production cutbacks at General Motors Corp,Ford Motor Co. and DaimlerChrysler AG raise concern for the fourth quarter and early 2007. "Inventory levels at GM, Ford and Chrysler are above normal, while sales and mix have turned against the domestic producers," Lustgarten said in a research note on Thursday. GM has cut fourth-quarter production by 15 percent, Ford trimmed it by 21 percent, and Chrysler said it will draw back production by 10 percent in the third quarter and probably make fourth-quarter cuts along the lines of GM, Lustgarten observed. While Timken anticipated some of the production cuts, Lustgarten said, the development would make it more difficult for the company's automotive division to return to profitability in the near term. Lustgarten downgraded his firm's rating on Timken to "Neutral" from "Buy" and trimmed its fourth-quarter earnings forecast to 70 cents per share from 74 cents. Lustgarten also lowered his full-year expectations by 5 cents to $3.05 per share, and shaved his 2007 forecast by 10 cents to $3.35 per share. Analysts polled by Thomson Financial presently forecast a profit of 74 cents per share in the fourth quarter, $3.11 per share for the year and $3.41 per share in 2007.