CANTON Timken defends its acquisition against criticism

CANTON (AP) -- Timken Co. officials are standing by the company's acquisition of Connecticut-based Torrington Co. despite increasing criticism from Wall Street.
The $840 million deal closed in February. At the time, Timken was praised for taking a risk and making its largest acquisition. Now, the company's stock has fallen and its credit rating has been downgraded to junk by Moody's Investors Services.
It's the first time in the Canton-based company's 104 years that its rating has dropped below investment grade.
"It's been disappointing, relative to expectations," Holden Lewis, an analyst at BB & amp;T Capital Markets in Richmond, Va., told The Plain Dealer of Cleveland for a story Sunday.
Lewis recently lowered his recommendation on Timken shares from buy to hold. "There's no getting around that," he said.
Timken officials say the merger will make the bearings and steel maker more competitive and more profitable. They say short-term problems -- including a downturn in automotive markets and changes associated with the acquisition -- are undermining profits.
Most analysts believe the deal with Torrington, which also makes bearings, still makes sense in the long run. They say Timken has been damaged by things that go beyond the usual auto-industry cycles: a series of reduced earnings forecasts; problems in integrating Torrington; and production issues in the automotive segment, which accounts for about 40 percent of Timken's sales.