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Last Update: 29-Apr-13 07:43 ET
Eaton shares little changed following better than expected earnings
Eaton (ETN $58.65 +0.00) reported first quarter earnings of $0.84 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus Estimate of $0.79; revenues rose 34.1% year/year to $5.31 bln vs the $5.42 bln consensus. The company issued in-line guidance for the second quarter with EPS of $1.05-1.15, excluding non-recurring items, versus the $1.12 Capital IQ consensus estimate. There are two primary drivers of the expected increase in second quarter operating earnings per share over the first quarter: first, seasonally higher volumes, since our sales in the second quarter are typically 5 to 10 percent higher, and second, the absence of purchase price inventory expense in the second quarter related to the Cooper Industries acquisition. Co reaffirms guidance for FY13, sees EPS of $4.05-4.45, excluding non-recurring items, vs. $4.35 Capital IQ Consensus Estimate.
"2013 is a year in which our results will depend more on our execution than on global growth. We are off to a great start this year, with our execution driving stronger than expected results in the first quarter. Based on the midpoint of our guidance, our operating earnings per share in 2013 will grow 8 percent." "Our first quarter results are a solid start to the year, coming in above the high end of our guidance despite markets being slightly weaker than our expectations. We were able to generate attractive operating margins, reflecting our enhanced portfolio as a result of the Cooper Industries acquisition and our continued focus on productivity improvements. Our 34 percent sales growth in the first quarter consisted of a decline of 5 percent in core sales and a 1 percent decline from currency translation, offset by 40 percent growth from acquisitions. Our markets in the first quarter were lower than a year ago, reflecting a continuation of the sluggish economic conditions experienced in many parts of the world during the second half of 2012. We entered 2013 expecting it would be a year of subpar global economic growth, leading to ~2 to 3 percent growth in our markets. We continue to believe our markets will grow 2 to 3 percent in 2013, most likely toward the lower end of the range."
"2013 is a year in which our results will depend more on our execution than on global growth. We are off to a great start this year, with our execution driving stronger than expected results in the first quarter. Based on the midpoint of our guidance, our operating earnings per share in 2013 will grow 8 percent." "Our first quarter results are a solid start to the year, coming in above the high end of our guidance despite markets being slightly weaker than our expectations. We were able to generate attractive operating margins, reflecting our enhanced portfolio as a result of the Cooper Industries acquisition and our continued focus on productivity improvements. Our 34 percent sales growth in the first quarter consisted of a decline of 5 percent in core sales and a 1 percent decline from currency translation, offset by 40 percent growth from acquisitions. Our markets in the first quarter were lower than a year ago, reflecting a continuation of the sluggish economic conditions experienced in many parts of the world during the second half of 2012. We entered 2013 expecting it would be a year of subpar global economic growth, leading to ~2 to 3 percent growth in our markets. We continue to believe our markets will grow 2 to 3 percent in 2013, most likely toward the lower end of the range."
