Eaton Corp Earnings Cheat Sheet: Profits Grow by Double Digits For Fifth Straight Quarter

S&P 500 (NYSE:SPY) component Eaton Corporation (NYSE:ETN) reported higher profit for the second quarter as revenue showed growth. Eaton Corporation is a power management company offering services in the sectors of electricity, hydraulics, aerospace, truck and automotive.

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Eaton Earnings Cheat Sheet for the Second Quarter

Results: Net income for the industrial electrical equipment company rose to $336 million (99 cents per share) vs. $226 million (67 cents per share) in the same quarter a year earlier. This marks a rise of 48.7% from the year earlier quarter.

Revenue: Rose 21.1% to $4.09 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: ETN reported adjusted net income of 97 cents per share. By that measure, the company beat the mean estimate of 95 cents per share. Analysts were expecting revenue of $4.01 billion.

Quoting Management: Alexander M. Cutler, Eaton chairman and chief executive officer, said, “We are pleased with our second quarter results, which exceeded the high end of our guidance for the quarter. Our sales in the second quarter were eight percent higher than in the first quarter of 2011, reflecting the continued expansion of our markets around the world.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 19%, with the biggest boost coming in the first quarter when revenue rose 22.6% from the year earlier quarter.

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 0.7 percentage point to 30% from the year earlier quarter. Over that span, margins have grown on average two percentage points per quarter on a year-over-year basis.

The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 85.2% and in the fourth quarter of the last fiscal year, the figure rose 32.7%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 4 cents in the first quarter, by 2 cents in the fourth quarter of the last fiscal year, and by 11 cents in the third quarter of the last fiscal year.

Competitors to Watch: Parker-Hannifin Corp. (NYSE:PH), Magnetek, Inc. (NYSE:MAG), Tech/Ops Sevcon, Inc. (NASDAQ:TO), United Technologies Corp. (NYSE:UTX), General Electric Company (NYSE:GE), Sauer-Danfoss Inc. (NYSE:SHS), Dover Corporation (NYSE:DOV), Thomas & Betts Corporation (NYSE:TNB), Roper Industries, Inc. (NYSE:ROP), and Crane Co. (NYSE:CR).

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(Source: Xignite Financials)

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