Eaton Corp.'s (ETN) fourth-quarter profit jumped by a third as
revenue and margins surged.
It predicted record operating earnings for 2011, forecasting a
per-share profit of $7 to $7.60, compared with the $7.26 average
estimate of analysts polled by Thomson Reuters. For the current
quarter, Eaton predicted earnings of $1.50 to $1.60 a share.
Analysts were expecting $1.46.
The company said it is raising its quarterly dividend by 17% due
to the strong outlook and results. In October, Eaton had raised the
payout to 58 cents from 50 cents.
Eaton also said it plans to enact a reverse stock split, in
light of its shares' recent growth. The stock is up 65% over the
past year after closing Wednesday at $104.61. Shares were inactive
premarket.
The diversified manufacturer continued its streak of
double-digit profit and sales gains and Chairman and Chief
Executive Alexander Cutler said the company expects the markets for
all six of its business segments to grow this year, the first such
broad-based growth since 2006. It has benefited lately from
increased production volumes in construction and farm machinery and
the long-suffering commercial truck industry.
Eaton reported a fourth-quarter profit of $280 million, or $1.63
a share, up from $211 million, or $1.25 a share, a year earlier.
Excluding acquisition-related charges, earnings rose to $1.69 from
$1.35. In October, the company forecast $1.55 to $1.65, topping
analysts' estimates at the time.
Revenue climbed 17% to $3.66 billion. Analysts polled by Thomson
Reuters most recently predicted $3.63 billion.
Gross margin widened to 30% from 28.4%.
Electrical sales in the Americas, Eaton's biggest segment by
revenue, were up 22% as the unit's profit jumped 29%. Revenue rose
at all the company's segments.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; matthew.jarzemsky@dowjones.com