* Lower demand from most customers hits sales, profit
* News comes as ISS backs push to split Timken in two
* Company says ISS, others don’t understand its business
CHICAGO, April 24 (Reuters) - Timken Co reported a sharply lower first-quarter profit on Wednesday, citing weak demand from most of its customers, including the oil and gas industry.
But orders picked up toward the end of the quarter, giving the company confidence that it will meet its full-year earnings forecast of $3.75 to $4.05 per share, Timken said.
The Canton, Ohio-based maker of steel and ball-bearings, which is under pressure from shareholders to split into two separate companies, earned $75.1 million, or 77 cents per share, in the first quarter, down from $155.7 million, or $1.58 a share, a year earlier.
Sales fell 23 percent to $1.1 billion.
Analysts, on average, had expected a profit of 79 cents a share on sales of $1.2 billion, according to Thomson Reuters I/B/E/S.
The push by the investment firm Relational Investors LLC and the California State Teachers’ Retirement System to split up Timken gained traction late Tuesday when Institutional Shareholder Services, a corporate governance adviser, recommended shareholders support a resolution backing the split.
Relational Investors and CalSTRS believe a split would create two companies with a combined market capitalization larger than the current one.
Timken management opposes a split, saying the integrated company enjoys a variety of advantages that would be destroyed if the company were broken in two. The United Steel Workers union has sided with management on the issue.
“We fundamentally disagree with ISS’ analysis and recommendation, which demonstrate a lack of understanding of our business,” Timken said in a statement.
Shareholders will vote on the proposal at Timken’s annual meeting on May 7.
In early trading on the New York Stock Exchange, Timken shares were up 55 cents at $52.38.