CLEVELAND — Eaton Corp. has announced net income per share of 97 cents for the second quarter of 2011, an increase of 47 percent over the 66 cents earned in the second quarter of 2010. Sales in the second quarter were $4.09 billion, 21 percent above the second quarter of 2010. Net income in the second quarter was $336 million compared to $226 million in 2010.
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 2011 were 97 cents compared to 68 cents per share in 2010, an increase of 43 percent. Operating earnings in the second quarter were $338 million compared to $232 million in 2010.
Alexander Cutler, Eaton chairman and CEO, said, “We are pleased with our second quarter results, which exceeded the high end of our guidance for the quarter. Our sales in the second quarter were 8 percent higher than in the first quarter of 2011, reflecting the continued expansion of our markets around the world.”
Cutler added, “The year is shaping up to be better than we forecasted in April,” said Cutler. “We now anticipate our overall end markets will grow by 11 percent versus our earlier forecast of 10 percent.”
“We anticipate net income per share for the third quarter of 2011 to be between $1.01 and $1.11,” said Cutler. “Operating earnings per share for the third quarter, which exclude charges to integrate our recent acquisitions, are anticipated to be between $1.03 and $1.13. Our outlook anticipates higher sales and margins in the third quarter over the second quarter, offset partially by a higher tax rate.
“We are raising our guidance for the full year. As a result of our strong second quarter and our slightly stronger market outlook for the year, we are raising our full-year per share guidance at the midpoint by $0.15, resulting in net income per share of between $3.86 and $4.06 and operating earnings per share of between $3.90 and $4.10.
“We expect 2011 to be a year of record sales and record profits,” said Cutler. “Our sales are projected to be 19 percent above 2010 and 6 percent above our previous annual sales record, which we achieved in 2008. Our operating earnings per share at the midpoint of our guidance is 42 percent above 2010 and 16 percent above our previous operating earnings per share record. We are particularly encouraged by the outlook for our 2011 results, given that many of our significant businesses are just beginning to recover from the economic downturn of 2008 and 2009.”
The Automotive segment posted second quarter sales of $460 million, up 18 percent from the second quarter of 2010. Global automotive markets were up 9 percent, with U.S. markets up 15 percent and non-U.S. markets up 7 percent. The segment reported operating profits of $55 million, an increase of 41 percent over the second quarter of 2010.
“We are pleased with the Automotive segment margin of 12 percent and as a result, we are raising our full year margin guidance,” said Cutler.
“While there was very little impact on us, global automotive production was impacted in the second quarter by Japanese supply issues,” said Cutler. “Fortunately, there was less disruption than many industry experts had forecasted. We believe that third quarter global auto production will rebound from second quarter levels, as the supply situation returns to normal.”
