Eaton Earnings: Here’s Why Investors Don’t Like These Results

Eaton Corporation (NYSE:ETN) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2.55%.

Eaton Corporation Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 5.22% to $1.09 in the quarter versus EPS of $1.15 in the year-earlier quarter.

Revenue: Rose 37.71% to $5.6 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Eaton Corporation reported adjusted EPS income of $1.09 per share. By that measure, the company missed the mean analyst estimate of $1.11. It missed the average revenue estimate of $5.77 billion.

Quoting Management: Alexander M. Cutler, Eaton chairman and chief executive officer, said, “Our second quarter operating earnings per share came in just below the midpoint of our guidance, despite softer market conditions than we expected at the start of the quarter. We were able to largely offset the lower revenue by generating higher operating margins, with our overall segment margin coming in at 15.6 percent, a quarterly record. This strong performance reflects our enhanced portfolio as a result of the Cooper Industries acquisition, Cooper integration savings, and our continued focus on productivity improvements.”

Key Stats (on next page)…

Revenue increased 5.5% from $5.31 billion in the previous quarter. EPS increased 29.76% from $0.84 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $1.22 and has not changed. For the current year, the average estimate has moved up from a profit of $4.34 to a profit of $4.35 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]