CLEVELAND — Eaton Corp. has reported net income per share of 98 cents for the fourth quarter of 2008, a decrease of 43 percent from net income per share of $1.71 in the fourth quarter of 2007. Sales in the quarter were $3.5 billion, 3 percent above the same period in 2007. Net income was $163 million compared to $256 million in 2007, a reduction of 36 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 2008 were $1.08 compared to $1.79 per share in the fourth quarter of 2007, a decrease of 40 percent. Operating earnings for the fourth quarter of 2008 were $180 million compared to $269 million in 2007, a reduction of 33 percent.
Sales growth in the fourth quarter of 3 percent consisted of 13 percent growth from acquisitions, offset by a 6 percent decline from lower exchange rates and a 4 percent decline in organic growth. End markets in the fourth quarter declined by 6 percent.
For the full year 2008, sales were a record $15.4 billion, 18 percent above 2007. Net income was a record $1.06 billion, an increase of 6 percent over 2007, and net income per share was $6.52, 1 percent less than in 2007. Operating earnings in 2008 totaled $1.11 billion versus $1.04 billion in 2007, an increase of 7 percent. Operating earnings per share for 2008 were $6.83, 1 percent lower than in 2007.
Alexander Cutler, Eaton chairman and chief executive officer, said, “Despite weaker-than-expected conditions in our end markets, we were able to generate earnings per share in the fourth quarter at the high end of our most recent guidance. Our markets turned down sharply in the fourth quarter, dropping 6 percent from the fourth quarter of 2007 versus our expectations in mid-December of a decline of between 3 and 4 percent.
“So far in 2009, our markets have continued to decline,” said Cutler. “We anticipate that our markets will decline through at least the second, and possibly the third, quarter. We estimate our markets for all of 2009 will decline by between 7 and 8 percent. We expect to outgrow our end markets in 2009 by approximately $300 million, and we also expect to record approximately $400 million of growth from the full-year impact of the six acquisitions we completed in 2008. These increases are expected to be offset by a decline in foreign currencies of 6 percent. As a result, we anticipate our revenues in 2009 will likely decline by 8 percent compared to 2008.