Company raises guidance for year
Diversified industrial manufacturer Eaton Corporation (NYSE:ETN) yesterday announced net income per share of $1.57 for the third quarter of 2010, an increase of 38 percent from net income per share of $1.14 in the third quarter of 2009. Sales in the quarter were $3.6 billion, 18 percent above the same period in 2009. Net income was $268 million compared to $193 million in 2009, an increase of 39 percent.
In a press release, Alexander M. Cutler, Eaton chairman and chief executive officer, said, “Our third quarter results significantly exceeded our guidance. The results reflect the outstanding achievements of our employees around the world, who have capitalized on the continued rebound in our end markets while realizing the benefits of the substantial changes in our cost structure implemented over the past two years.
“Our 18 percent sales increase in the quarter was due entirely to an increase in core sales, with a 1 percent increase from acquisitions offset by a 1 percent decline from exchange rates,” said Cutler. “Our end markets increased 14 percent in the quarter.
Accordingly, for the full year, we are raising our earnings guidance by 10 percent. We now anticipate that net income per share will be between $5.30 and $5.40, and operating earnings per share will be between $5.45 and $5.55.”
Third quarter sales for the Electrical Americas segment were $967 million, up 15 percent compared to 2009. Operating profits in the third quarter were $141 million, down 1 percent from results in 2009.
“End markets for our Electrical Americas segment grew 3 percent during the third quarter,” said Cutler. “We saw good growth during the quarter in our early- and mid-cycle markets, particularly in power quality and industrial markets. That growth was largely offset by the weakness in our non-residential markets.
Sales for the Electrical Rest of World segment were $707 million, an increase of 9 percent compared to the third quarter of 2009. The sales increase was comprised of a 12 percent increase in core sales and a 1 percent increase from acquisitions offset by a 4 percent decline due to foreign currency.
In the Hydraulics segment, third quarter sales were $583 million, up 40 percent from the third quarter of 2009. Hydraulics markets in the third quarter grew 44 percent compared to the same period in 2009, with U.S. markets up 58 percent and non-U.S. markets up 34 percent. Operating profits in the third quarter were $76 million. In the third quarter of 2009, operating profits were $20 million, excluding acquisition integration charges of $2 million.
“Global hydraulics markets continued their sharp rebound during the third quarter,” said Cutler. “Our bookings, adjusted for foreign exchange, increased 43 percent in the third quarter. We expect hydraulics markets will show further growth in the fourth quarter, although the rate of growth is likely to be somewhat lower than in the third quarter. For all of 2010, we now expect our markets to grow 31 percent versus our expectation at the end of the second quarter of 26 percent.”
Eaton Corporation is a diversified power management company with 2009 sales of $11.9 billion. Eaton is a global provider of electrical components and systems for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use; and truck and automotive drivetrain and powertrain systems for performance, fuel economy and safety.
Eaton has approximately 70,000 employees and sells products to customers in more than 150 countries.