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Apr-14-2008Eaton Says 1st-Quarter Net Rose 5.6%, Boosts Forecast (Update3)(topic overview)
CONTENTS:
- The commitment amount of the revolving credit agreement will be reduced by the net amount of any proceeds raised through certain future capital market transactions which may include, but are not limited to, debt or equity issuances. (More...)
- Operating earnings for the first quarter of 2008 were $256 million compared to $243 million in 2007. (More...)
- The company issued financial guidance for its second quarter and lifted its earnings forecast for full year 2008. (More...)
- Eaton is a global leader in electrical systems and components for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; hydraulics, fuel and pneumatic systems for commercial and military aircraft; intelligent truck drivetrain systems for safety and fuel economy; and automotive engine air management systems, powertrain solutions and specialty controls for performance, fuel economy and safety. (More...)
- Revenue gained 12 percent to $3.5 billion, the Cleveland-based company said in a statement today. (More...)
- Eaton Corp. (NYSE: ETN) has reported improved first-quarter results and has raised by a nickel a share its earnings guidance for all of 2008. (More...)
- " We expect modest growth in second quarter production, and for 2008 as a whole, we now estimate the NAFTA heavy-duty market to total 230,000 units. (More...)
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The commitment amount of the revolving credit agreement will be reduced by the net amount of any proceeds raised through certain future capital market transactions which may include, but are not limited to, debt or equity issuances. The $250 of notes borrowed under this agreement was classified as long-term debt because Eaton intends, and has the ability under its existing $1.5 billion of revolving credit facilities, to refinance these notes on a long- term basis. This earnings release discloses operating earnings, operating earnings per Common Share, operating earnings per Common Share excluding per share impact of discontinued operations, and operating profit before acquisition integration charges for each business segment, each of which excludes amounts that differ from the most directly comparable measure calculated in accordance with generally accepted accounting principles (GAAP). A reconciliation of each of these financial measures to the most directly comparable GAAP measure is included in this earnings release in the Comparative Financial Summary or in the notes to the earnings release. Management believes that these financial measures are useful to investors because they exclude transactions of an unusual nature, allowing investors to more easily compare Eaton's financial performance period to period. Management uses this information in monitoring and evaluating the on-going performance of Eaton and each business segment. [1] Excluding acquisition integration charges, operating earnings for the first quarter were $256 million, or $1.70 per share. This was up from $243 million, or $1.62 per share, in last year's first quarter.[2] Operating earnings, which exclude charges to integrate the company's recent acquisitions, are projected to range between $1.90 and $2.00 per share. Based on the strong first quarter performance, the company lifted its full year earnings forecast by $0.05 per share to $7.30 - $7.80 per share, from the previously communicated outlook range of $7.25 - $7.75 per share.[3] 'Operating earnings per share, which excludes charges to integrate our recent acquisitions, are expected to be between $1.90 and $2.00 in the second quarter,' Mr. Cutler said. For the year as a whole, Eaton has raised its full-year earnings guidance by five cents a share, with net income per share in a range of $7.30 to $7.80 and operating earnings per share in a range of $7.80 to $8.30.[4]
NEW YORK (Associated Press) - Eaton Corp. raised its 2008 profit target after first-quarter earnings came in better than expected, the industrial manufacturer said Monday. Eaton, whose products include hydraulics, electrical systems and drivetrain systems, expects net income of $7.30 to $7.80 per share _ a nickel higher on each end than its previous forecast. It expects operating profit of $7.80 to $8.30 per share.[5]
The company said Jan. 22 first- quarter net income would be $1.50 to $1.60 a share, with adjusted earnings of $1.60 to $1.70. Eaton's earnings were "a refreshing breath of fresh air'' after General Electric Co. posted an unexpected drop in profit on April 11 and cut its forecast, Lustgarten said. "It's nice to see a company meet -- even beat -- expectations,'' he said. Eaton this year completed its purchases of Germany's Moeller Group and Taiwan's Phoenixtec Power Co. for $2.8 billion, both of which "are running ahead of our original expectations,'' Chief Executive Officer Alexander Cutler said in today's statement.[6]
Eaton's 16 takeovers in the past two years have added to the electrical and power divisions, changing the main focus for the world's second-largest maker of hydraulic equipment. The expansion protected the company from the weakening U.S. economy and declining demand for heavy-duty truck parts, spurring Eaton to raise its full-year profit forecast by 5 cents a share to $7.30 to $7.80 a share. "It was a basically good quarter across the board, driven by higher volume from overseas sales and currency'' exchange benefits, said Eli Lustgarten, an analyst at Longbow Research in Independence, Ohio, with a "buy'' rating on Eaton shares.[6]
The company's Electrical segment generated first quarter sales of $1.3 billion, up 20% from $1.1 billion in the previous year quarter. Operating profit for this segment advanced to $160 million from $120 million in the three months ended March 31, 2007.[3] The Truck segment sales dropped 2% to $567 million from $576 million in the previous year's first quarter. Operating profit for this segment fell 21% to $85 million from $107 million reported in the year-earlier quarter.[3]
Excluding acquisition integration charges of $2 million during the quarter, operating profits totaled $80 million, an increase of 14 percent over the first quarter of 2007.[1] Excluding acquisition integration charges of $2 million, operating profits totaled $80 million, up 14% from 2007. Eaton now believes the global hydraulics markets for 2008 will grow 2%, compared to its prior estimate of 1% growth.[3]
Net income from continuing operations for the quarter was $244 million or $1.65 per share, compared to $229 million or $1.56 per share in the corresponding quarter of the previous year. Net income in both periods included charges for integration of acquisitions.[3] Before acquisition integration charges, operating earnings per share in the current quarter were up 5% to $1.70 from $1.62 per share in 2007.[3] Eaton chairman and CEO Alexander Cutler said the company 'had a strong first quarter, with operating earnings per share at the top end of our guidance.' About half the company's sales growth came from acquisitions.[4] Due to the strong first quarter results, we are raising our full-year guidance by $.05 per share, to net income per share of $7.30 to $7.80 and operating earnings per share of $7.80 to $8.30[1] Adjusted operating earnings per share, excluding the impact of discontinued operations, totaled $1.72, compared to $1.65 in the first quarter of 2007.[3]
Looking ahead, the company predicted operating earnings of $1.90-$2.00 per share in the second quarter. Eaton also raised its forecast for the full year by $0.05 per share.[2] Analysts polled by First Call/Thomson Financial expect the company to earn $1.92 per share for the second quarter and $7.78 per share for the full year 2008. Among Eaton's rivals, White Plains, New York-based ITT Corp. (ITT) is due to release its quarter financial results on April 25.[3] Analysts surveyed by First Call/Thomson Financial expect the company to post earnings of $0.47 per share on revenues of $9.33 billion. Parker Hannifin Corp. (PH), yet another peer in the industry, is slated to report its quarterly results on April 22.[3] Analysts expect the company to report earnings of $0.81 per share on revenues of $2.66 billion for the quarter. Another competitor, Milwaukee, Wisconsin-based Johnson Controls Inc. (JCI) would announce its quarterly results on April 16.[3]
Looking ahead, Eaton expects second quarter earnings to be in the range of $1.80 - $1.90 per share.[3] Looking ahead, Mr. Cutler said Eaton expects net income per share for the second quarter will be in the range of $1.80 and $1.90.[4] CLEVELAND--( BUSINESS WIRE )--Diversified industrial manufacturer Eaton Corporation (NYSE:ETN) today announced net income per share of $1.64 for the first quarter of 2008, an increase of 5 percent over net income per share of $1.56 in the first quarter of 2007.[1] The diversified manufacturer said net income in the period was up 5.5%, to $247 million, or $1.64 per diluted share, from $234 million, or $1.56 a share, in the first quarter of 2007.[4] Net income for the Cleveland-based diversified manufacturer rose 5.6 percent to $247 million, compared with $234 million during the first quarter of 2007.[7]
The company's first quarter net income totaled $247 million, up from $234 million reported in the same quarter of last year.[3] The company reported first-quarter net income of $247 million, or $1.64 per share. This compared to $234 million, or $1.56 per share, in the year-ago quarter.[2] Eaton, whose products include hydraulics, electrical systems and drivetrain systems, said net income jumped to $247 million, or $1.64 per share, from $234 million, or $1.56 per share, a year ago.[8] Eaton, which is based in Cleveland, reported Monday net income of $247 million, or $1.64 a share, compared with $234 million, or $1.56 a share, a year earlier.[9]
Net income increased to $247 million, or $1.64 a share, from $234 million, or $1.56, a year earlier, and profit excluding certain costs beat analysts' estimates.[6]
Excluding acquisition-related charges in each period, profit rose to $1.70 from $1.62 last year. Analysts, whose estimates also exclude those charges, expected profit of $1.66 per share, according to Thomson Financial.[8] Analysts surveyed by Thomson Financial expected profits of $1.66 per share. These results typically exclude charges.[10]
On average, 19 analysts polled by First Call/Thomson Financial expected the company to earn $1.66 per share for the quarter.[3]
Analysts, whose estimates project operating earnings, expect $7.78 per share, according to Thomson Financial.[5] Annual operating earnings are now estimated to be between $7.80 and $8.30 per share.[3]
On a per share basis, earnings were up 5% to $1.67 from $1.59 in the prior year quarter.[3]
The company now expects an operating profit for the year of $7.80-$8.30 per share for 2008.[2] Operating profit decreased to $46 million from $63 million in the comparable quarter of the previous year.[3] Operating profits in the first quarter were $85 million, a decline of 21 percent from 2007.[1]
Hydraulics segment sales were a record $657 million, up 14 percent compared to the first quarter of 2007.[1] The Truck segment posted sales of $567 million, down 2% compared to the first quarter of 2007.[11]
The Automotive segment posted first quarter sales of $538 million, 2 percent higher than the comparable quarter of 2007.[1] Aerospace segment sales were a record $430 million, 23 percent above the first quarter of 2007.[1]
Sales in the quarter were $3.5 billion, 12 percent above the same period in 2007 and a record for the first quarter.[1] Diversified industrial manufacturer Eaton Corp., Cleveland, OH, reported sales for the first quarter 2008 were $3.5 billion, 12% above the same period in 2007.[11]
First-quarter sales for Eaton Corp. rose 12.3 percent to $3.5 billion, compared with $3.11 billion during the same period last year.[7]
Hydraulics segment witnessed quarterly sales growth of 14% that amounted to $657 million, compared to $574 million last year.[3] Sales for the Electrical segment were $1.3 billion, up 20% over 2007. This includes 11% growth from acquisitions. Eaton reported end markets in electrical grew 7% in both U.S. and non-U.S. markets.[11] The growth in the electrical group was bolstered by acquisitions. Eaton reported that a strike at an automotive supplier reduced its revenues and margins in the auto segment. the company said it believes the labor situation will be resolved during the second quarter and, as a result, U.S. production should recover during the period. In its truck segment, the company said first-quarter production of NAFTA heavy-duty trucks was slightly ahead of the fourth quarter, but down 34% from the same period last year.[2]
" Our bookings in the Electrical segment, adjusted for foreign exchange and acquisitions, were up 3 percent from the first quarter a year ago, continuing the strong momentum in our Electrical segment, " said Cutler[1] "Sales growth in the first quarter of 12 percent consisted of 2 percent from organic growth, 6 percent from acquisitions and 4 percent from higher foreign exchange rates.[7] The company noted that the sales growth in the latest quarter of 12% included 2% from organic growth, 6% from acquisitions, and 4% from higher foreign exchange rates.[3]
Eaton Corp. posted a 5.6% rise in first-quarter net income, as acquisitions and overseas demand helped drive 12% sales growth. The industrial manufacturer also raised its full-year earnings outlook.[9] April 14 (Bloomberg) -- Eaton Corp., the hydraulics maker expanding in the electrical-systems market, raised its full-year profit forecast after first-quarter earnings climbed 5.6 percent as acquisitions abroad boosted sales.[6]
CLEVELAND -- Eaton Corp.' s first-quarter profit rose sharply as demand from international markets pushed sales higher, the industrial manufacturer said Monday.[8] CLEVELAND (AP) - The Eaton Corp. diversified manufacturer based in Cleveland says first-quarter earnings rose 5% pushed by demand from international markets.[10]
Operating earnings for the first quarter of 2008 were $256 million compared to $243 million in 2007. [1] Automotive segmented posted first quarter sales of $538 million, up 2% from prior year's sales of $529 million.[3] First quarter selling & administrative expenses rose to $552 million from $507 million last year, while research & development expenses increased to $89 million from $80 million in the year-ago quarter.[3]
The proceeds must be used to finance certain acquisitions including, but not limited to, the acquisition of The Moeller Group and Phoenixtec. In the first quarter of 2008, Eaton borrowed $250 of notes under this agreement to finance the acquisition of Phoenixtec. All amounts borrowed under the credit agreement, including commercial paper backstopped by this agreement, must be repaid by January23, 2009, but may be repaid earlier at Eaton ' s option or may be required to be repaid earlier in the event of a default.[1] Excluding acquisition costs, Eaton earned $1.70 a share last quarter, exceeding the $1.66 average estimate of 20 analysts in a Bloomberg survey.[6]
" We anticipate net income per share for the second quarter of 2008 to be between $1.80 and $1.90.[1] Net interest income ascended to $38 million from $30 million in the comparable quarter of the previous year.[3]
Sales for the quarter were $3.5 billion, up 12% from $3.11 billion in the prior year quarter.[2] Sales rose 12 percent to $3.5 billion from $3.11 billion a year earlier.[8] Sales for the Electrical segment were a record $1.3 billion, up 20 percent over 2007.[1]
Quarterly net sales amounted to $3.496 billion, up 12% from previous year's net sales of $3.113 billion, and surpassed Wall Street analysts' consensus revenue estimate of $3.43 billion.[3] Eaton Corporation is a diversified industrial manufacturer with 2007 sales of $13.0 billion.[1] On April 4, 2008, Eaton announced it had acquired The Moeller Group, a Germany-based business, for 1.55 billion. This business, which had sales of 1.02 billion for 2007, is a leading supplier of electrical components for commercial and residential building applications, and industrial controls for industrial equipment applications.[1]
The firm's overseas business helped support results amid a slowdown in the U.S. economy. Eaton's profit for the quarter was better than analysts had expected, allowing the firm to raise its forecast for the full year.[2] " The hydraulics markets in the first quarter performed as expected, with continued strong international growth offsetting flat U.S. markets, " said Cutler[1] " We continue to anticipate growth of 4 percent in our end markets in 2008, with international markets modestly stronger than our expectations in January and U.S. markets slightly weaker, " said Cutler[1] End markets for Eaton grew 2%. Eaton reported it anticipated growth of 4% in its end markets in 2008, with international markets "modestly stronger" than expectations in January and U.S. markets "slightly weaker."[11]
Eaton's end markets grew 2% in the quarter. Eaton said that its end markets performed well in the first quarter, buoyed by the strength in international markets.[3] Commenting on the quarter, Alexander Cutler, Eaton's chairman and chief executive officer said in a statement, "In the first quarter, our end markets performed about as we had expected, buoyed by the strength in international markets."[2]
" End markets for our electrical business grew 7 percent during the first quarter, " said Cutler[1] " The operating margin of 12.5 percent in the quarter was a record for a first quarter, " said Cutler[1] " First quarter production of NAFTA heavy-duty trucks totaled 49,000 units, just slightly ahead of production in the fourth quarter of 2007 but still down 34 percent from the first quarter of 2007, " said Cutler[1]
Truck markets in the first quarter were down 9 percent, with U.S. markets down 24 percent and non-U.S. markets up 17 percent.[1]
Our global hydraulics markets were up 4 percent in the quarter, with non-U.S. markets up 8 percent while U.S. markets were flat.[1] " Based on the strength outside the U.S., we now believe the global hydraulics markets for 2008 will grow 2 percent versus our prior estimate of 1 percent growth[1]
The hydraulics group saw 14% sales growth, while the firm's electrical unit experienced a 20% increase from last year.[2] Results were bolstered by strength in the aerospace segment, where sales grew 23% from last year. Eaton predicted that the global aerospace market will grow 7% in 2008, slightly stronger than its expectations at the start of the year.[2]
Excluding acquisition-related charges in each period, profit rose to $1.70 from $1.62 last year.[10] In Business Segment Information, the charges reduced Operating profit of the related business segment.[1]
In the first quarter of 2008, Eaton realigned its business segment financial reporting structure.[1] For more information, visit www.eaton.com ]] www.eaton.com. Notice of Conference Call: Eaton ' s conference call to discuss its first quarter results is available to all interested parties via live audio webcast today at 10 a.m. Eastern time by clicking on the microphone on the right side of Eaton ' s home page. This news release can also be accessed on the home page by clicking " view article " under the news release headline. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside the company ' s control.[1] " Our orders in the first quarter were a new quarterly bookings record for the segment.[1]
The effective income tax rate for continuing operations for the first quarter of 2008 was 14.5% compared to 12.7% for the first quarter of 2007.[1]
The company issued financial guidance for its second quarter and lifted its earnings forecast for full year 2008. [3] For the full year, we are maintaining our prior forecast that our global electrical markets will grow by 5 to 6 percent.[1] " We anticipate the global aerospace market will grow 7 percent in 2008, slightly stronger than our expectations at the start of the year, " said Cutler.[1]
Eaton climbed $3.16, or 4 percent, to $82.10 at 10:32 a.m. in New York Stock Exchange composite trading. The stock has declined 15 percent this year.[6] In order to initially finance the acquisitions of The Moeller Group and Phoenixtec, on January25, 2008, Eaton entered into a revolving credit agreement, in the amount of $3.0billion, which may be used either to fund direct loans or to backstop commercial paper borrowings.[1] In 2008 and 2007, Eaton acquired certain businesses in separate transactions. The Statements of Consolidated Income include the results of these businesses from the effective dates of acquisition.[1] The acquisition integration charges were included in the Statements of Consolidated Income in Cost of products sold or Selling & administrative expense, as appropriate.[1]
Charges in 2007 related to the integration of primarily the following acquisitions: in the Electrical segment, Senyuan and Powerware; in the Hydraulics segment, Hayward; and in the Aerospace segment, PerkinElmer and Cobham.[1] Charges in 2008 related to the integration of primarily the following acquisitions: in the Electrical segment, the MGE small systems UPS business; in the Hydraulics segment, Ronningen-Petter and Synflex; in the Aerospace segment, Argo-Tech and Cobham; and in the Automotive segment, Saturn.[1]
Eaton is a global leader in electrical systems and components for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; hydraulics, fuel and pneumatic systems for commercial and military aircraft; intelligent truck drivetrain systems for safety and fuel economy; and automotive engine air management systems, powertrain solutions and specialty controls for performance, fuel economy and safety. [1] For the full year, the company still expects global electrical markets to grow by 5% - 6%.[3]
Revenue gained 12 percent to $3.5 billion, the Cleveland-based company said in a statement today. [6] Wall Street analysts had a consensus revenue estimate of $3.43 billion.[2]
Cost of products sold during the latest quarter was $2.53 billion, higher than $2.23 billion recorded in the year-earlier quarter.[3]
Alexander Cutler, chairman and chief executive officer of Eaton, commented, 'The strike at an automotive supplier which impacted production at several U.S. vehicle manufacturers reduced our revenues and margins for the quarter.[3] " The aerospace business signed several new contracts during the quarter, " said Cutler[1]
" The expected lifetime revenues from the new contracts, based on the production schedules of the associated platforms, total approximately $110 million[1]
Eaton Corp. (NYSE: ETN) has reported improved first-quarter results and has raised by a nickel a share its earnings guidance for all of 2008. [4] Sales growth was the results of 2% organic growth, 6% from acquisitions and 4% from higher exchange rates.[11] The 20 percent growth in sales includes 11 percent growth from acquisitions.[1]
" We expect modest growth in second quarter production, and for 2008 as a whole, we now estimate the NAFTA heavy-duty market to total 230,000 units. This compares to our original expectation of 240,000 units [1]
Our end markets grew 2 percent in the quarter," chairman and CEO Alexander Cutler said.[7]
SOURCES
1. Eaton Reports First Quarter Net Income Per Share up 5 Percent to $1.64 and Raises Guidance for the Year
2. Eaton Earnings Climb, Raises Guidance [ETN] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news .
3. Eaton Q1 Profit Up On Higher Sales; Lifts FY08 Forecast - Update [ETN] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news .
4. Crain's Cleveland Business: Profits, guidance rise at Eaton
5. Eaton Raises 2008 Profit Target
6. Bloomberg.com: U.S.
7. Eaton's 1Q sales rise 12 percent - 4/14/2008 6:56:00 AM - Industrial Distribution
8. Eaton 1Q Profit Rises Sharply on Exports | Chron.com - Houston Chronicle
9. Free Preview - WSJ.com
10. WTOL.com, Toledo's News Leader, News 11 | Eaton 1Q earnings up 5% on strong international demand
11. Eaton Sales Grow 12% in First Quarter
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