Eaton Beats Q3 Estimates, But Lowers Outlook

Diversified industrial manufacturer Eaton Corporation reported higher profits Monday, but lowered its full-year outlook. Net income for the third-quarter was $258 million ($1.71/share), up 4% from $248 million ($1.62/share) last year. Revenues were up 7% to $3.3 billion from $3.08 billion last year. Analysts surveyed by Thomson estimated earnings of $1.67/share and revenues of $3.24 billion. The company said it got a boost from its electrical unit, where operating profits jumped to $156 million from $116 million during the same time last year. However, was offset by its truck division, where operating profits dropped to $95 million from $122 million a year ago. The trucking industry has been slowed down by new clean-air laws that began January 1, 2007. Concerning future guidance, CEO Alexander Cutler said because of "economic uncertainties triggered by the late summer turmoil in global credit markets... the fourth quarter will not improve as we had earlier anticipated." He said fourth quarter earnings will be $1.60-$1.70/share, and revenues would be about the same as the third-quarter. He lowered the company's full-year earnings outlook down to $6.50-$6.60/share from $6.50 to $6.70/share. Eaton's stock traded down 3.5% to $93.04 Monday.

Sources: Press Release, Reuters, CNN Money
Commentary: Eaton Corp Flies On Increased Aerospace Activity (ETN) • Midcap and Smallcap Beneficiaries From Boeing's New 787 Dreamliner
Stocks to watch: ETN. Competitors: TRW, ARM. ETFs: XLI
Earnings call transcript: Eaton Q2 2007

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