Cooper Industries plc. Earnings: Streak of Four Straight Profit Increases Snapped

Cooper Industries plc. (NYSE:CBE) reported its results for the first quarter. Cooper Industries is a worldwide manufacturer of electrical products and tools.

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Cooper Industries plc Earnings Cheat Sheet for the First Quarter

Results: Net income for the electronic products fell to $160.7 million ($1 per share) vs. $346.1 million ($2.07 per share) a year earlier. This is a decline of 53.6% from the year-earlier quarter.

Revenue: Rose 9.9% to $1.4 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Cooper Industries plc. fell in line with the mean analyst estimate of $1 per share. It beat the average revenue estimate of $1.36 billion.

Quoting Management: “For 2012, we are raising our guidance for earnings per share from continuing operations to a range of $4.25 to $4.40, up from $4.15 to $4.35, based on the stronger underlying demand in the industrial and utility markets and a book to bill ratio of 108%. This guidance assumes full-year total revenue growth of six to eight percent and core revenue growth of five to seven percent. For the second quarter of 2012 we expect earnings per share of $1.09 to $1.12 on total revenue growth of six to eight percent. Investments made over the last several years in new product development, targeted verticals, and our increased presence in emerging markets have continued to strengthen our growth profile.” said Chairman and Chief Executive Officer Kirk S. Hachigian. “Additionally, we are increasing our full year estimate for capital spending to a range of $160 to 180 million as a result of investments to support specific core growth opportunities in our Electronics and international Power Systems businesses.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the fourth quarter of the last fiscal year, net income rose 12.7% from the year earlier, while the figure increased 13.1% in the third quarter of the last fiscal year, more than threefold in the second quarter of the last fiscal year and more than twofold in the first quarter of the last fiscal year.

Revenue has increased for four quarters in a row. Revenue increased 9% to $1.37 billion in the fourth quarter of the last fiscal year. The figure rose 12% in the third quarter of the last fiscal year from the year earlier and climbed 2.4% in the second quarter of the last fiscal year from the year-ago quarter.

The company fell in line with estimates last quarter after beating expectations in the previous two quarters. In the fourth quarter of the last fiscal year, it topped the mark by 5 cents, and in the third quarter of the last fiscal year, it was ahead by 2 cents.

Gross margins expanded last quarter, rising 0.3 percentage point to 34.3% from the year-earlier quarter. This snaps a streak of two consecutive quarters of shrinking margins.

Looking Forward: Next quarter’s results are expected to be more favorable for the company. Over the past sixty days, the average estimate for the second quarter has reached $1.11 per share, up from $1.10. Over the past three months, the average estimate for the fiscal year has climbed from $4.27 per to share to $4.33.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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