CLEVELAND -- Eaton Corp. has announced net income per share of 17 cents for the second quarter of 2009, 92 percent below the second quarter of 2008. Sales in the quarter were $2.90 billion, 32 percent below the second quarter of 2008. Net income was $29 million compared to $333 million in 2008.

Net income in both periods included charges for integration of acquisitions. Before these acquisition integration charges, operating earnings per share in the second quarter of 2009 were 23 cents compared to $2.10 per share in 2008, a decrease of 89 percent, and operating earnings were $39 million compared to $344 million in 2008.

Alexander Cutler, Eaton chairman and chief executive officer, said, “Our sales in the second quarter were only slightly higher than in the first quarter of 2009, reflecting little improvement in the challenging global economic conditions. Despite the sluggish revenues, which came in $100 million lower than projected in our initial quarterly guidance, we were successful in substantially lowering our cost structure, which allowed us to generate earnings about equal to our guidance for the quarter.

“Sales in the second quarter declined 32 percent compared to the second quarter of 2008, with a decline of 6 percent from exchange rates and a decline of 26 percent in core sales,” said Cutler. “Our end-markets declined 26 percent in the quarter. It is clear that significant destocking and inventory liquidation continued in virtually all of our segments during the quarter.

“Despite the challenging market conditions, our operating cash flow for the quarter was $361 million, just slightly lower than last year, and our free cash flow was $313 million, $68 million higher than last year,” said Cutler. “In the last three quarters, our operating cash flow has totaled $1.1 billion. We are maintaining our dividend for the second quarter at 50 cents per share, to be distributed in mid-August.

“As we survey our end-markets, the year is shaping up to be considerably weaker than we had forecast in April,” said Cutler. “We now anticipate our overall end-markets will decline by between 21 and 22 percent versus our earlier forecast of a decline between 15 and 16 percent. We see our U.S. markets declining by 25 percent, while our non-U.S. markets are expected to decline by 19 percent.

“We anticipate net income per share for the third quarter of 2009 to be between 80 cents and 90 cents,” said Cutler. “Operating earnings per share, which exclude charges to integrate our recent acquisitions, are anticipated to be between 90 cents and $1 in the third quarter of 2009.

“We are lowering our guidance for the full year due to the further reduction in our expectations for market growth, which we expect to be partially offset by an additional $120 million of savings from our cost-reduction initiatives. Accordingly, we now anticipate 2009 net income per share of between $1.65 and $1.85, and 2009 operating earnings per share of between $2 and $2.20,” said Cutler.

The Automotive segment posted second quarter sales of $270 million, down 51 percent from the second quarter of 2008. Global automotive markets were down 33 percent with U.S. markets down 48 percent and non-U.S. markets down 25 percent. The segment reported an operating loss of $19 million.

“The automotive market in the U.S. was markedly impacted in the second quarter by the shutdowns at General Motors and Chrysler,” said Cutler. “Outside the U.S., several markets benefited from incentive programs designed to boost auto purchases. We now anticipate global automotive markets will decline by 25 percent in 2009.”