ETN Eaton Corp New

Eaton Corporation’s (ETN) acquisition deal in Germany concluded yesterday with the successful purchase of E. Begerow GmbH and Co. KG - a liquid filtration system producer. The deal, which forms a part of Eaton’s strategy to expand its liquid filtration business, was announced on June 30, 2011. The acquisition will strengthen the company’s current filtration offerings by adding advanced filtration technologies to its portfolio.

Headquartered in Langenlonsheim, Germany, Begerow is a leading system provider for advanced liquid filtration solutions. The company develops and produces technologically innovative filter media and filtration systems for food and beverage, chemical, pharmaceutical and industrial applications.

Some of the company’s products include systems that filter beer, mineral water, shampoo, paint, pesticides and other products. The company employs about 270 people worldwide and had 2010 sales of more than $84 million.

Eaton Corporation’s second quarter 2011 earnings results grew 43% year over year, on a per share basis, mainly on a 12% end-market growth. Eaton’s quarterly earnings per share reached 97 cents, also beating the Zacks Consensus Estimate of 95 cents.

Going forward, Eaton expects adjusted earnings per share for the third quarter in the range of $1.03–$1.13, while GAAP earnings are expected in the $1.01–$1.11 range. The company’s full year 2011 Eaton has now raised its full-year adjusted earnings guidance to a range of $3.90 and $4.10 per share, while GAAP earnings are forecasted in the range of $3.86–$4.06 per share.

The Zacks Consensus earnings estimates for third quarter 2011, fiscal 2011 and fiscal 2012 are 95 cents, $3.92 and $4.64 per share, respectively.

Cleveland, Ohio-based diversified power management company Eaton Corporation is a leading supplier of power accessories in the aerospace and automotive industries and has customers in 150 countries. Eaton has 70,000 employees and reported sales of $13.7 billion in 2010.

Over the years, Eaton has gradually transformed itself from an automotive and truck component manufacturer into a diversified industrial enterprise with leadership positions in its core electrical, hydraulic and aerospace market segments. In our view, the company’s organic growth will be driven by strength in its end-markets.

Eaton Corporation currently retains a Zacks #2 Rank (short-term Buy rating). We maintain our long-term Outperform rating on the stock. The company competes with ITT Corporation (ITT) and Parker Hannifin Corporation (PH).

 
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