CLEVELAND -- Diversified industrial manufacturer Eaton Corp. has announced net income per share of $1.25 for the fourth quarter of 2009, an increase of 28 percent over net income per share of 98 cents in the fourth quarter of 2008. Sales in the quarter were $3.1 billion, 10 percent below the same period in 2008. Net income was $211 million compared to $163 million in 2008, an increase of 29 percent.

Net income in both periods included charges related to acquisition integration. Before acquisition integration charges, operating earnings per share in the fourth quarter of 2009 were $1.35 compared to $1.08 per share in the fourth quarter of 2008, an increase of 25 percent. Operating earnings for the fourth quarter of 2009 were $229 million compared to $180 million in 2008, an increase of 27 percent.

The sales decline in the fourth quarter of 10 percent consisted of a 15 percent decline in core sales offset by 5 percent growth due to foreign exchange. End markets in the fourth quarter declined by 15 percent.

For the full year 2009, sales were $11.9 billion, 23 percent less than 2008. Net income was $383 million, a decrease of 64 percent over 2008, and net income per share of $2.27 was 65 percent less than in 2008. Operating earnings in 2009 totaled $437 million versus $1.109 billion in 2008, a decrease of 61 percent. Operating earnings per share for 2009 of $2.59 were 62 percent lower than in 2008.

Alexander Cutler, Eaton chairman and chief executive officer, said, “We had a strong fourth quarter, with earnings considerably higher than our guidance at the start of the quarter due principally to improved operating performance. As we anticipated, our markets improved very modestly in the fourth quarter, reflecting a continuation of the slow global economic recovery.

“We estimate our markets for all of 2010 will grow 5 percent, and we expect to outgrow our end markets in 2010 by approximately $300 million,” said Cutler. “We also expect approximately $450 million of growth from foreign exchange. In total, we anticipate our revenues in 2010 will likely grow by 11 percent compared to 2009.

“Our forward visibility is improving as the global market conditions have stabilized and are beginning to improve,” said Cutler. “In addition to the normal seasonal first quarter weakness in several of our businesses, our overall business will be impacted by two additional factors this year: first, our 2010 earnings will be impacted by a significant swing in our tax rate from a credit rate of 27 percent in 2009 to a tax expense of an estimated 15 percent in 2010, and secondly, compared to our fourth quarter results, we have removed in the first quarter the extraordinary short-term cost containment actions we put in place last year. As a result, we estimate that first quarter operating earnings per share, which exclude an estimated 5 cents of charges to integrate our recent acquisitions, will be between 75 cents and 85 cents per share. For the full year 2010, we estimate that operating earnings per share, which exclude an estimated $0.20 of charges to integrate our recent acquisitions, will be between $3.70 and $4.

“Our guidance underlines the considerable earnings leverage we expect to capture as volumes improve. Operating earnings per share in 2010 will double on only 11 percent growth in sales, after adjusting 2009 earnings to reflect the same tax rate we expect in 2010,” said Cutler. “We anticipate that 2010 will prove to be a transitional year of growth between the depressed market conditions of 2009 and even better market conditions in 2011.”