US: Eaton posts net income gain of 39%
Eaton has announced that its sales in the third quarter were USD3.6bn, 18% above the same period in 2009. Net income was USD268m, an increase of 39% on the same quarter of last year. The results included improved performance in the Truck and Automotive divisions.
Alexander M. Cutler, Eaton chairman and chief executive officer, said: “Our third quarter results significantly exceeded our guidance. The results reflect the outstanding achievements of our employees around the world, who have capitalised on the continued rebound in our end markets while realizing the benefits of the substantial changes in our cost structure implemented over the past two years.
“As we look at our end markets, we believe the growth patterns we have experienced so far this year will continue,” he said. “For the full year, we now believe our end markets will increase 10 percent, 2 points higher than our expectations at the end of the second quarter, driven by higher growth in non-U.S. Markets.”
The Truck segment posted sales of USD534m million in the third quarter, up 33% compared to 2009. Truck markets in the third quarter were up 28%, with US markets up 24% and non-U.S. markets up 31%. Operating profits were USD74m compared to USD25m in the third quarter of 2009.
“We are pleased with our 13.9 percent margin in the Truck segment during the third quarter,” said Cutler. “This margin performance is particularly noteworthy given the currently depressed production levels in the NAFTA Class 8 truck market.
“We believe truck markets in the fourth quarter will continue to improve, although at a slower rate than in the third quarter,” said Cutler. “We now estimate our Truck markets in 2010 to grow 26 percent versus our expectation of 23 percent at the end of the second quarter.”
The Automotive segment posted third quarter sales of USD390m, up 20% from the third quarter of 2009. Automotive unit production in the third quarter grew 14%, with U.S. auto production up 27% and production outside the U.S. up 8% compared to the third quarter of 2009. Operating profits in the third quarter were USD39m, an increase of 70 percent compared to the third quarter of 2009.
“Global automotive production declined slightly from the second to the third quarter, principally due to lower production in Europe and Asia,” said Cutler. ”We expect stronger growth in the fourth quarter. For all of 2010, we now estimate our markets to grow 24 percent versus our expectation at the end of the second quarter of 17 percent growth.”