Eaton Corporation on Tuesday announced net income per share of $US1.27 for the second quarter of 2003, an increase of 5% over net income per share of $1.21 in the second quarter of 2002. Sales in the quarter were $2.03 billion, 8% above last year. Net income was $93 million compared to $88 million in 2002.
Net income in both periods included charges related to restructuring activities. Before these charges, 2003 second quarter operating earnings per share were 10% above 2002, with 2003 operating earnings per share of $1.36 versus $1.24 per share in 2002. Operating earnings for the second quarter of 2003 were $99 million compared to $90 million in 2002.
For the first half of 2003, sales were $3.95 billion, 10% higher than in 2002. Net income of $165 million increased 36% over last year, and net income per share of $2.27 rose 35% above 2002. Excluding restructuring charges in both periods, operating earnings in the first half of 2003 increased to $176 million, 13% more than in 2002, and operating earnings per share of $2.42 rose 12% compared to last year.
“We anticipate full-year net income per share of $4.50 to $4.75 and third quarter net income per share of $1.15 to $1.25,” said a spokesman. “Excluding the restructuring charges to integrate our recent acquisitions, we are maintaining our full-year operating earnings guidance of $5.00 to $5.25 per share. We anticipate third quarter operating earnings per share will be in the $1.30 to $1.40 range. We are pleased that in spite of end markets which are weaker than our expectations at the beginning of the year, and the issuance of an additional 3.7 million shares, we are able to maintain our full-year earnings guidance.”
The automotive segment posted record second quarter sales of $432 million, which was 3% above the comparable quarter last year. NAFTA automotive production declined 10%, while European production was down 6%, compared to the same period last year. Operating profits were $58 million, down 9% from a year ago.
“Our automotive segment continued its strong revenue performance, with sales that significantly outpaced its end markets,” said the spokesman. “We also benefited during the quarter from the strong euro, which added 5% to our revenues for the quarter. Our margins during the quarter were lower than last year, principally as a result of new programs which have not yet ramped up to their mature production economics.”
Last week, Eaton announced a new licensing arrangement with Lotus Engineering to commercialise Lotus’ active valve train technology which substantially reduce emissions and improve fuel economy.
The truck segment posted sales of $317 million in the second quarter, up 1% compared to last year, and recorded operating profits of $40 million, a 33% increase over 2002 operating profits. NAFTA heavy-duty truck production was down 5% and NAFTA medium-duty truck production was up 4%. European truck production was down 5% and South American production was flat versus a year ago.
“Second quarter production of NAFTA heavy-duty trucks totalled about 45,000 units. For the full year, we continue to expect production of heavy-duty trucks in NAFTA to total approximately 190,000 units,” said the spokesman. “The new operating model we have put in place in our truck business over the last two years is working well. The model has enabled the business to adjust to the ramping up and down of volumes last year, and to this year’s ramping up of volumes, without incurring the inefficiencies and expediting costs we incurred in previous periods of substantial volume change.”