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Eaton Reports Fourth Quarter Operating Earnings Increase

Earnings went up 63 percent over 2012.

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DUBLIN – Eaton Corp. plc has announced operating earnings for the fourth quarter of 2013 (excluding charges of $55 million to integrate recent acquisitions) of $516 million, up 63 percent over the fourth quarter of 2012.
 
Operating earnings per share for the fourth quarter, which exclude 8 cents per share to integrate recent acquisitions, were $1.08, an increase of 32 percent over the fourth quarter of 2012.
 
Sales in the quarter were $5.5 billion, 28 percent higher than the same period in 2012. Net income in the fourth quarter of 2013 was $479 million compared to $179 million in 2012.
 
Alexander Cutler, Eaton chairman and CEO, said, “Our growth accelerated in the fourth quarter, with core sales growth of 4 percent, the strongest quarter of core sales growth in 2013. In addition to our 4 percent core sales growth, we had 25 percent growth from acquisitions, offset slightly by a reduction of 1 percent from currency exchange.
 
“We generated record cash flow in the fourth quarter, with operating cash flow of $872 million, up 27 percent over the fourth quarter of 2012,” said Cutler. “During the quarter, we completed our purchase price accounting for Cooper. Our Cooper integration remains well ahead of schedule, setting a solid foundation for the $95 million of additional Cooper integration savings we expect to realize in 2014.
 
“In mid-January we signed an agreement to sell two aerospace units to Safran for a price of $270 million. The two units have total annual revenues of approximately $100 million,” said Cutler. “The transaction is expected to close early in the second quarter.”
 
For the full year 2013, sales were a record $22 billion, 35 percent higher than in 2012. Operating earnings in 2013, which exclude $163 million in charges to integrate our recent acquisitions, totaled a record $2 billion, an increase of 42 percent compared to 2012. Operating earnings per share for 2013 were a record $4.13, up 5 percent over 2012.
 
“Our full year 2013 sales increase of 35 percent reflects principally the revenues from our 2012 acquisitions, as growth in our markets remained sluggish for much of the year,” said Cutler. “We generated record operating earnings per share in 2013, up 5 percent over 2012, despite the additional shares we issued as part of the Cooper acquisition and the purchase price charges resulting from the five acquisitions completed in 2012. Operating cash flow in 2013 was a record $2.3 billion, up 37 percent over 2012.
 
Cutler added that in 2014, the company anticipates market growth of 3 percent. “We expect that 2014 operating earnings per share will set another record. We estimate that first quarter operating earnings per share, which exclude an estimated $76 million of charges to integrate our recent acquisitions, will be between 95 cents and $1.05 per share.
 
“For the full year 2014, we estimate that operating earnings per share, which exclude an estimated $168 million of charges to integrate our recent acquisitions, will be between $4.50 and $4.90 per share. This guidance does not factor in any gain from the divestiture of the two aerospace units,” said Cutler. “Based on the $4.70 midpoint of this guidance, our operating earnings per share in 2014 will grow 14 percent.”
 

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