DUBLIN – Eaton Corp. has announced that operating earnings per share, which exclude charges of 5 cents per share to integrate recent acquisitions, were 41 cents for the second quarter of 2014. Adjusted for the gain on the recent aerospace divestitures, and the settlements and associated costs of the Meritor, Triumph Group, and related litigation, operating earnings per share were $1.11, up 2 percent over the second quarter of 2013.
 
Sales in the second quarter of 2014 were $5.8 billion, 3 percent above the same period in 2013. Operating earnings for the second quarter of 2014, excluding pre-tax charges of $37 million to integrate recent acquisitions and the unusual gain and costs noted above, were $529 million, an increase of 2 percent over 2013.
 
Alexander Cutler, Eaton chairman and CEO, said, “Our second quarter results, adjusted for unusual items, were above the midpoint of our original guidance for the quarter. Revenue came in as we expected, with core sales growth of 3 percent in the quarter, following 4 percent core growth in the first quarter of 2014. Our overall segment margins were also as expected, with the margins reflecting the impact of the $39 million of restructuring charges we took in the quarter in the Industrial Sector. Our strong margins in Electrical Products, Hydraulics, Aerospace, and Vehicle offset weakness in Electrical Systems and Services margins.
 
“During the second quarter, several unusual items impacted our earnings,” said Cutler. “First, we closed the divestiture of two small aerospace businesses for a pretax gain of $156 million. Second, we settled two longstanding litigations, one with Meritor and one with Triumph, as well as related litigation, for a pretax cost of $644 million. Factoring in these unusual items, operating earnings per share in the second quarter were reduced by 70 cents after tax.
 
“We are pleased with our strong second quarter bookings in both of our electrical segments and in our aerospace segment,” said Cutler. “For all of 2014, we continue to forecast our end markets will grow 3 percent.
 
“We anticipate operating earnings per share for the third quarter of 2014, which exclude an estimated $33 million of charges to integrate our recent acquisitions, to be between $1.20 and $1.30,” said Cutler.
 
“We are lowering the top end of our full year 2014 guidance for operating earnings per share, which exclude an estimated $160 million in acquisition integration charges, and which are also adjusted for the impact of the Aerospace divestitures and the legal settlements, to between $4.50 and $4.70,” said Cutler. “The $4.60 midpoint of our revised guidance represents a reduction of 10 cents, or 2 percent, from our prior guidance, reflecting the impact of lower margins in our Electrical Systems and Services segment.”