CLEVELAND (July 26, 2012)—Eaton Corp. has reported higher second-quarter net income despite flat sales, but has lowered its earnings guidance for the full year from the range it had stated in late April.
The diversified manufacturer said its net income in the quarter rose 14 percent from a year earlier to $382 million.
Sales at Eaton edged down 0.5 percent, to $4.07 billion from $4.09 billion for the period.
“The uncertainty in Europe, as well as slower economic growth rates in China, India and Brazil, resulted in weakness in a number of our end markets,” Alexander “Sandy” Cutler, Eaton chairman and CEO, said. “We now believe our end markets for the year are likely to grow by 3 percent to 4 percent, a reduction from the 5 percent growth we had forecast in April.”
He did say that because of improved margins and a lower tax rate, the company expects operating earnings per share to continue at record levels during the year's second half.
Eaton's hydraulics segment reported record operating profits of $123 million during the quarter. Sales rose 6 percent on the quarter to $769 million, with a 3-percent organic rise in revenue and a 6-percent gain from acquisitions partially offset by a 3-percent negative impact from foreign exchange.
Eaton's overall sales for the first half of 2012 gained 1.7 percent to $8.03 billion, with net income up 11.2 percent to $693 million.