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Eaton posts net but slashes earnings view
Source: Agencies |
July 21, 2009, Tuesday
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DIVERSIFIED manufacturer Eaton Corp, a maker of hydraulics, electrical control systems and truck transmissions, reported higher-than-expected quarterly profit yesterday, but slashed its earnings forecast, citing weakness across its markets.
Eaton cited weak truck output and steep declines in European electrical markets and shutdowns at United States auto makers. It said it expected its end-markets to decline at a faster rate than it had forecast in April.
But the company said cost cuts made it possible to deliver second-quarter earnings per share close to its original forecast.
Net earnings fell to US$31 million, or 17 cents a share, from US$337 million, or US$2.03 per share, a year earlier.
Excluding acquisition-related charges, Eaton earned 23 cents a share. Analysts on average expected 14 cents, according to Reuters Estimates. In April, Eaton had forecast earnings at about 25 cents.
Revenue fell 32 percent to US$2.9 billion, compared with Wall Street forecasts of US$3 billion.
Eaton said it now expected its end-markets to decline 21 percent to 22 percent, versus down 15 percent to 16 percent in its April forecast. It expects its US markets to fall more steeply than overseas markets.
It estimated full-year operating earnings of US$2 to US$2.20 per share, compared with its April forecast of US$2.50 to US$3, but still above Wall Street estimates of US$1.92 a share.
Eaton said it was maintaining its US$2 annual dividend - one of the highest among industrial companies - despite analyst speculation the company would reduce the payout to conserve cash.
Eaton cited weak truck output and steep declines in European electrical markets and shutdowns at United States auto makers. It said it expected its end-markets to decline at a faster rate than it had forecast in April.
But the company said cost cuts made it possible to deliver second-quarter earnings per share close to its original forecast.
Net earnings fell to US$31 million, or 17 cents a share, from US$337 million, or US$2.03 per share, a year earlier.
Excluding acquisition-related charges, Eaton earned 23 cents a share. Analysts on average expected 14 cents, according to Reuters Estimates. In April, Eaton had forecast earnings at about 25 cents.
Revenue fell 32 percent to US$2.9 billion, compared with Wall Street forecasts of US$3 billion.
Eaton said it now expected its end-markets to decline 21 percent to 22 percent, versus down 15 percent to 16 percent in its April forecast. It expects its US markets to fall more steeply than overseas markets.
It estimated full-year operating earnings of US$2 to US$2.20 per share, compared with its April forecast of US$2.50 to US$3, but still above Wall Street estimates of US$1.92 a share.
Eaton said it was maintaining its US$2 annual dividend - one of the highest among industrial companies - despite analyst speculation the company would reduce the payout to conserve cash.
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