Eaton Corp.'s (ETN) second-quarter earnings rose 49% as the
diversified manufacturer continued to benefit from a recovery in
the production of automotives.
The company raised its full-year guidance for the second time,
projecting earnings of $3.90 to $4.10 a share, up from its April
forecast of $3.70 to $4. It also forecast current-quarter earnings
of $1.03 to $1.13 a share, while analysts surveyed by Thomson
Reuters currently expect $1.05.
Eaton, which makes electrical and hydraulic parts for a wide
range of machinery and vehicles, has posted a string of
double-digit sales and earnings growth in recent quarters, aided by
increased production volumes in construction and farm machinery and
the long-suffering commercial-truck industry. Manufacturing output
has bounced back much faster than consumer demand over the past
year, fueled in part by companies spending their stockpiled cash on
computers, machinery and other equipment. A weaker dollar has also
helped propel U.S. exports.
"While there was very little impact on us, global automotive
production was impacted in the second quarter by Japanese supply
issues," said Chairman and Chief Executive Alexander M. Cutler.
"Fortunately, there was less disruption than many industry experts
had forecasted. We believe that third-quarter global auto
production will rebound from second-quarter levels, as the supply
situation returns to normal."
Eaton reported a profit of $336 million, or 97 cents a share, up
from $226 million, or 66 cents a share, a year earlier. Excluding
items such as acquisition adn integration costs, earnings rose to
97 cents from 68 cents. In April, the company predicted earnings of
90 cents to 96 cents a share, excluding acquisition costs.
Sales jumped 21% to $4.09 billion, beating the $4.02 billion
expected by analysts polled by Thomson Reuters.
Electrical sales in the Americas, Eaton's biggest segment by
revenue, climbed 16%, and the unit's profit rose 20%, excluding
charges.
Shares closed Friday at $51.16 and were inactive premarket. The
stock has risen 32% over the past year.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; melodie.warner@dowjones.com