Industrial manufacturer Eaton Corporation (ETN)
has released its fourth quarter 2011 results clocking operating
earnings of $1.08 per share compared with 85 cents per share in the
year-ago quarter. The results of the company, however, missed the
Zacks Consensus Estimate of $1.11 per share by 3 cents.
GAAP earnings of Eaton during the quarter were $1.07 per share,
up 30.4%, from 82 cents in the year-ago period.
In the reported quarter, the variation between GAAP and
operating earnings was due to an acquisition integration charge of
1 cent.
Eaton’s 2011 operating earnings were $3.96 per share compared
with $2.81 per share reported in 2010. However, the results of the
company missed the Zacks Consensus Estimate of $4.00 per share by 4
cents.
Operating Statistics
Eaton earned net quarterly revenues of $4,033 million, up 10.0%
from the year-ago comparable period. However, it fell short of the
Zacks Consensus Estimate of $4,179 million. Revenue growth in the
quarter was attributable to 9.0% increase in core sales and 1.0%
growth associated with acquisitions.
Eaton posted net income of $362 million in the fourth quarter of
2011, up from $280 million in the year-ago quarter, a rise of
29.0%.
Eaton’s total revenue for 2011 was $16,049 million versus
$13,715 million reported in the prior fiscal year, reflecting a
growth of 17.01%. Fiscal year 2011 revenue, however, fell short of
the Zacks Consensus Estimate of $16,178 million.
In 2011, the net income was $1,350 million, an increase of 45.3%
from the year-ago quarter.
Segment Analysis
Electrical Americas: Within its Electrical
unit, Electrical Americas’ revenues of fourth quarter 2011 improved
by 11.0% from the year-ago quarter to $1,121 million,while
operating profit (excluding acquisition integration charges) was up
6.13% to $173 million. Growth in Electrical Americas’ revenues
reflected growth of 10.0% in end-markets and 11.0% in orders.
Electrical Americas’ revenue for 2011 was $4,192 million versus
$3,675 million in 2010.
Electrical Rest of the World: The Electrical
Rest of the World segment’s fourth quarter 2011 sales was down 9.0%
from the year-ago quarter to $699 million. In the reported quarter,
operating profit was $69 million, down 14.8% from $81 million in
the year-ago quarter. This was due to weakness in Europe and
Asia-Pacific region. Segment orders for the quarter saw a dip of
10.0%.
Electrical Rest of the World’s revenue for 2011 was $2,984
million versus $2,748 million in 2010.
Hydraulics: At $705 million, Hydraulics
segment’s sales rose 23.5% over the prior year, while operating
profits came in at $103 million, up 43.1% from the corresponding
quarter last year. Hydraulics markets grew 9.0%, of which U.S.
markets were up 16.0% and non-U.S. markets up 3.0%. Segment
bookings increased 5.0% during the fourth quarter of 2010.
Hydraulics segment’s revenue for 2011 was $2,835 million versus
$2,212 million in 2010.
Aerospace: Segmental sales in the fourth
quarter 2011 grew 7.5% to $430 million and operating profits grew
23.8% to $78 million. Aerospace markets grew 4.0% in the quarter.
Aerospace bookings rose 1.0%.
In 2011, the Aerospace segment generated revenue of $1,648
million versus $1,536 million in 2010.
Truck: The Truck segment posted a 31.3%
improvement in sales to reach $680million. It earned an operating
profit of $137million during the quarter, compared with $66 million
in the year-ago quarter. Eaton benefited from a 27.0% increase in
truck production, with US and non-US markets growing 52.0% and
10.0% respectively.
Truck segment’s 2011 revenue was $2,644 million versus $1,997
million in 2010.
Automotive: Aided by an 8.0% growth in the
global auto markets, the segment’s fourth quarter sales grew 1.0%
year over year to $398 million. It posted an operating profit of
$42 million, reflecting a dip of 2.3% from the comparable quarter
last year due to start-up costs for capacity expansion to support
the new program wins in China.
In 2011, Automotive segment revenue was $1,746 million, a rise
of 12.9% from $1,547 million in 2010.
Guidance
Eaton expects operating earnings per share for the first quarter
of 2012 to be in the range of 80 cents - 90 cents per share,
excluding an estimated 1 cent charge for integration of company’s
recent acquisitions.
For fiscal 2012, Eaton estimates its operating earnings per
share guidance in the range of $4.15 - $4.55 per share, excluding
acquisition-related charges of 5 cents.
Cleveland, Ohio-based Eaton Corporation is a leading supplier of
power accessories to the aerospace industry with customers in more
than 150 countries.
Eaton Corporation competes with The Babcock & Wilcox
Company (BWC) and Applied Industrial Technologies,
Inc. (AIT). Both the companies carry a short-term Zacks #3
Rank (Hold).
Eaton Corporation currently has a Zacks #3 Rank (short-term Hold
rating).
APPLD INDL TECH (AIT): Free Stock Analysis Report
APPLD INDL TECH (AIT): Free Stock Analysis Report
BABCOCK&WILCOX (BWC): Free Stock Analysis Report
BABCOCK&WILCOX (BWC): Free Stock Analysis Report
EATON CORP (ETN): Free Stock Analysis Report
EATON CORP (ETN): Free Stock Analysis Report
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