Eaton Corp Earnings: Margins Expand and Profit Climbs

S&P 500 (NYSE:SPY) component Eaton Corporation (NYSE:ETN) reported its results for the first quarter. Eaton 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 First Quarter

Results: Net income for the machine industrial rose to $311 million (91 cents per share) vs. $287 million (83 cents per share) in the same quarter a year earlier. This marks a rise of 8.4% from the year-earlier quarter.

Revenue: Rose 4.1% to $3.96 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Eaton Corporation reported adjusted net income of 92 cents per share. By that measure, the company beat the mean estimate of 90 cents per share. Analysts were expecting revenue of $4.01 billion.

Quoting Management: Alexander M. Cutler, Eaton chairman and chief executive officer, said, “We set first quarter records in sales, segment operating margins and earnings per share. Our earnings per share in the first quarter exceeded the high end of our earnings guidance.”

Key Stats:

The company has now seen its net income rise for three quarters in a row. In the fourth quarter of the last fiscal year, net income rose 29.3% and in the third quarter of the last fiscal year, the figure rose 36.2%.

Revenue has risen for the last four quarters. Revenue increased 10.1% to $4.03 billion in the fourth quarter of the last fiscal year. The figure rose 15.5% in the third quarter of the last fiscal year from the year earlier and climbed 21.1% in the second quarter of the last fiscal year from the year-ago quarter.

After two quarters of falling short, the company beat estimates last quarter. In the fourth quarter of the last fiscal year, it missed the mark by 3 cents, and in the third quarter of the last fiscal year, it came in under estimates by 2 cents.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the second quarter has moved up from $1.11 a share to $1.12 over the last sixty days. For the fiscal year, the average estimate has moved down from $4.52 a share to $4.43 over the last ninety days.

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

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