Eaton Q4 Profit Climbs, Tops Estimates; Sees Higher Earnings In FY14 - Update

(RTTNews) - Power management company Eaton Corp. Plc (ETN) reported Tuesday a higher profit in its fourth quarter, benefited by sharply lower charges and higher sales. Operating earnings per share beat analysts' estimates, while sales missed their view. The company also issued earnings forecast for first quarter and fiscal 2014.

The fourth-quarter net income attributable to Eaton shareholders climbed to $479 million or $1.01 per share from $179 million or $0.47 per share a year ago.

The latest quarter results included charges of $37 million or $0.08 per share to integrate recent acquisitions, compared to last year's charges of $137 million or $0.36 per share. Operating earnings, which excluded charges, were $516 million or $1.08 per share.

On average, 24 analysts polled by Thomson Reuters expected earnings of $1.06 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly net sales climbed 28 percent to $5.53 billion from $4.33 billion a year earlier. Analysts estimated sales of $5.55 billion. In the quarter, core sales growth was 4 percent, the strongest quarter of core sales growth in 2013. The company also had 25 percent growth from acquisitions, offset slightly by a reduction of 1 percent from currency exchange.

Segment-wise, sales for the Electrical Products segment climbed 57 percent, reflecting the impact of the Cooper Industries acquisition. Bookings in the segment increased 4 percent from the combined bookings of Eaton and legacy Cooper a year ago.

Sales for the Electrical Systems and Services segment grew 38 percent mainly with the Cooper Industries acquisition. Bookings, meanwhile, declined 4 percent from last year's combined bookings due to a slowdown in orders from the U.S. government and continued weak demand from the utility market, the company noted.

For the full year 2013, operating earnings per share were $4.13, up 5 percent over 2012, and sales climbed 35 percent to $22.0 billion.

Looking ahead for the first quarter, Eaton expects operating earnings per share, which exclude an estimated $76 million of charges to integrate recent acquisitions, will be between $0.95 and $1.05 per share. Analysts estimate earnings of $1.03 per share for the quarter.

For the full year 2014, operating earnings per share are projected to be between $4.50 and $4.90 per share, while analysts expect earnings of $4.88 for the year. Based on the $4.70 midpoint of this guidance, operating earnings per share in 2014 would grow 14 percent, the company said.

The company also expects markets to grow 3 percent in the year.

Eaton Chairman and Chief Executive Officer Alexander Cutler added that the company's board will address the first quarter dividend at its meeting later this month.

Eaton said its Cooper integration remains well ahead of schedule, setting a solid foundation for the $95 million of additional Cooper integration savings the company expects to realize in 2014.

Eaton shares closed Monday's trading at $70.27, down $2.82 or 3.86 percent. In the extended trading, shares gained $0.75 or 1.07 percent and traded at $71.02.