Acquisitions boost Eaton Corp.

Diversified industrial manufacturer Eaton Corp has announced a 35 percent rise in second quarter earnings, after sales were boosted by acquisitions, but has reduced its full year forecast due to the impact of higher oil prices in several markets.  ┬á The Cleveland-based company said net income rose to $333 million ($2.03 a share) from $246 million ($1.64 a share) a year earlier. Sales gained 32 percent to $4.28 billion over the same quarter last year. ┬á┬á Net income in both periods included charges for integration of acquisitions. Before the integration charges, operating earnings per share in the second quarter of 2008 were $2.10 compared to $1.70 per share in 2007, an increase of 24 percent, and operating earnings for the second quarter of 2008 were $344 million compared to $255 million in 2007, an increase of 35 percent. ┬á┬á The company said its 32 percent sales growth in the second quarter consisted of 19 percent from acquisitions, eight percent from organic growth, and five percent from exchange rates.┬á┬á Eaton has diversified with more than a dozen acquisitions in the past two years, expanding overseas and into the faster-growing electrical, hydraulics and aerospace industries. ┬á┬á ÔÇ£Our businesses performed extremely well in the second quarter, generating strong sales growth and record profits,ÔÇØ said Alexander M. Cutler, Eaton chairman and chief executive officer. ┬á┬á ÔÇ£We were able to achieve these results despite the nearly 40 percent rise in oil prices during the quarter, which caused significant turmoil in our transportation-related end markets. With 20 percent of our revenue from emerging countries and with continued strength in many of our product markets, we believe we are well-positioned to deal with the reduced growth outlook for the US and European economies caused by higher fuel prices.┬á┬á The company has reduced its earnings forecast for the full year, however. ÔÇ£The year is shaping up to be slightly weaker than our initial forecast due principally to the impact of higher oil prices in several of our end markets,ÔÇØ Cutler said. ┬á┬á ÔÇ£We now anticipate our overall end markets to grow at three percent, one percentage point lower than our prior forecast. We see growth in our US markets at one percent compared to our prior estimate of two percent, while our non-US markets are expected to grow five percent compared to our prior estimate of six percent.ÔÇØ┬á┬á Eaton's four divisions manufacture a range of products including electrical circuit breakers, surge protection devices, pumps, motors, truck transmissions, anti-lock braking systems and golf grips. ┬á┬á Eaton supplies hydraulics, fuel systems and air systems for aircraft, including Boeing's new 787 Dreamliner and the Airbus A380 superjumbo, the world's largest passenger aircraft.   Read Eaton Corp's announcement in full here.┬á┬á┬á┬á┬á ┬á*┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á