) released its third quarter results with earnings per share of
$1.07 barely falling behind the year-ago figure of $1.08 per
share. The quarterly bottom-line also lagged the Zacks Consensus
Estimate of $1.09 per share.
Eaton's GAAP earnings during the third quarter were $1.02 per
share versus $1.07 per share reported in the year-ago quarter.
The difference between GAAP and operating earnings of 5 cents
during the quarter was due to acquisition integration
Eaton posted net quarterly revenue of $3,950 million, down
4.2% from $4,123 million in the year-ago quarter. The
year-over-year results were impacted by dull sales from the
company's truck and Electrical Rest of the World businesses as
well as unfavorable foreign exchange rate.
Quarterly revenue was also lower than the Zacks Consensus
Estimate of $4,195 million.
Within its Electrical unit, Electrical Americas' sales increased
6% year over year to $1,143 million, while operating profit
(excluding acquisition integration charges) jumped 31% to $208
million. This was driven by end market growth of 4%, partially
offset by a 3% decline in bookings, compared with the prior-year
Electrical Rest of the World:
The Electrical Rest of the World segment's sales decreased 9%
year over year to $686 million. Operating income of $77 million
(excluding acquisition integration charges) went up 24% from the
year-ago level. Segment bookings for the quarter observed a sharp
3% drop compounded by a 3% and 6% fall in core sales and foreign
At $763 million, Hydraulics segment sales notched up 6% over the
prior year, while operating profit came in at $98 million, down
11% from the year-earlier quarter. The domestic Hydraulics market
performed favorably on the back of a 13% increase from
acquisitions, partially countered by a decline of 4% and 3% in
core sales and foreign currency, respectively. Global Hydraulics
witnessed a slowdown in growth due to lower capital spending on
construction equipment units in the U.S. and China.
Segmental sales of $419 million were flat with the year-ago
result while operating profit declined 31% to $49 million year
over year. However, the overall market grew by 4% compared to
third quarter 2011. Aerospace booking in the third quarter fell
7% on account of weak defense aerospace market.
The Truck segment recorded a decline of 23% resulting in sales of
$549 million. It brought in operating income of $103 million
during the quarter, down 26% from the year-ago quarter. An 8%
decline in truck production was responsible for this
The segment's third quarter sales declined 12% year over year to
$390 million. It posted an operating profit of $41 million,
dropping 34% from the comparable quarter last year due to
considerable fall in European automotive production.
The cost of product sold in the third quarter 2012 was $2,747
million, declining 5.2% from $ 2,900 million in the year-ago
Selling and administrative expenses climbed to $687 million
from $668 million in the prior year.
Operating profit fell by 12.9% year over year to $376 million
from $432 million in the year-ago quarter.
Cash and short-term investments of the company as of September
30, 2012 were $1,045 million versus $1,084 million as of December
Long-term debt was $3,690 million as of September 30, 2012
compared with $3,366 million as of December 31, 2011.
The company expects the Electrical Americas to improve 6% in
2012 while the Electrical Rest of the World will continue to
decline by 3%.
Also, the company expects that Global Hydraulics will fall by
2% in 2012 which indicates a 5% drop from the previous projection
due to continued weakening in the U.S. and Chinese economies. The
Aerospace market is expected to grow by 4% while Eaton expects
Class 8 truck production to total 270,000 units in 2012.
The company competes with
). Parker-Hannifin announced its first-quarter 2013 financial
results with earnings of $1.57 per share below the Zacks
Consensus Estimate of $1.73. Earnings for the quarter declined by
34 cents year over year.
Total revenue was $3.21 billion, down from $3.23 billion in
the prior-year quarter.
Eaton posted lackluster financial outcomes in the third
quarter, as against its successful earnings performance in the
preceding two quarters. Uncertainty surrounding U.S. fiscal
reforms has led to a deceleration in the industrial sector which
is expected to continue into the following quarters. This will
hit Eaton's growth rate hard.
Also, markets in Europe and China will remain dull adding to
the company's concerns. However, significant acquisitions like
Cooper, Rolec Comercial e Industrial S.A. in Chile and South
Korea's Jeil are expected to serve as positive growth catalysts
in the future.
Cleveland, Ohio-based diversified power management company
Eaton Corporation is a leading supplier of power accessories in
the aerospace industry and has customers spanning 150 countries.
Eaton Corporation currently retains a Zacks #4 Rank (short-term
EATON CORP (ETN): Free Stock Analysis Report
PARKER HANNIFIN (PH): Free Stock Analysis
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