Eaton Corp. (ETN) fourth-quarter earnings rose 29%, though sales
grew slower-than-expected, as the diversified industrial
manufacturer also raised it quarterly dividend by 12%.
The company forecast current-quarter earnings of 80 cents to 90
cents a share and full-year earnings of $4.15 to $4.55 a share.
Analysts surveyed by Thomson Reuters expect 97 cents and $4.49,
respectively.
Eaton, which makes electrical and hydraulic parts for a wide
range of machinery and vehicles, has posted double-digit sales and
earnings growth for the past two years, aided by increased
production volumes in construction and farm machinery and a rebound
in the 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.
Eaton reported a profit of $362 million, or $1.07 a share, up
from $280 million, or 82 cents, a year earlier. Excluding items
such as acquisition and integration costs, earnings rose to $1.08
from 85 cents. Its October projection was earnings of $1.06 to
$1.16 a share.
Sales jumped 10% to $4.03 billion, missing the $4.16 billion
estimate from analysts polled by Thomson Reuters. The company
attributed the revenue shortfall to its electrical sector, which
saw slow sales in the U.S., Europe, and Asia Pacific.
Gross margin edged up to 30.2% from 30%.
Eaton raised its quarterly dividend to 38 cents from 34
cents.
Shares closed Wednesday at $49.54 and were inactive premarket.
The stock has risen 13% over the past three months.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283;
melodie.warner@dowjones.com