Eaton Corporation today announced net income per share of $1.64 for the first quarter of 2008, an increase of 5 percent over net income per share of $1.56 in the first quarter of 2007. Sales in the quarter were $3.5 billion, 12 percent above the same period in 2007 and a record for the first quarter. Net income was $247 million, also a record for the first quarter.
Net income in both periods included charges for integration of acquisitions. Before acquisition integration charges, operating earnings per share in the first quarter of 2008 were $1.70 versus $1.62 per share in 2007, an increase of 5 percent. Operating earnings for the first quarter of 2008 were $256 million compared to $243 million in 2007.
Alexander M. Cutler, Eaton chairman and chief executive officer, said, "We had a strong first quarter, with operating earnings per share at the top end of our guidance. Sales growth in the first quarter of 12 percent consisted of 2 percent from organic growth, 6 percent from acquisitions, and 4 percent from higher foreign exchange rates. Our end markets grew 2 percent in the quarter.
"We continue to anticipate growth of 4 percent in our end markets in 2008, with international markets modestly stronger than our expectations in January and U.S. markets slightly weaker. In the first quarter, our end markets performed about as we had expected, buoyed by the strength in international markets.
"We anticipate net income per share for the second quarter of 2008 to be between $1.80 and $1.90. Operating earnings per share, which excludes charges to integrate our recent acquisitions, are expected to be between $1.90 and $2.00 in the second quarter of 2008. Due to the strong first quarter results, we are raising our full-year guidance by $.05 per share, to net income per share of $7.30 to $7.80 and operating earnings per share of $7.80 to $8.30."
Hydraulics segment sales were a record $657 million, up 14 percent compared to the first quarter of 2007. Global hydraulics markets were up 4 percent in the quarter, with non-U.S. markets up 8 percent while U.S. markets were flat.
Operating profits in the first quarter were $78 million. Excluding acquisition integration charges of $2 million during the quarter, operating profits totaled $80 million, an increase of 14 percent over the first quarter of 2007.
"The hydraulics markets in the first quarter performed as expected, with continued strong international growth offsetting flat U.S. markets," said Cutler. "Based on the strength outside the U.S., we now believe the global hydraulics markets for 2008 will grow 2 percent versus our prior estimate of 1 percent growth."
The Truck segment posted sales of $567 million, down 2 percent compared to the first quarter of 2007. Truck markets in the first quarter were down 9 percent, with U.S. markets down 24 percent and non-U.S. markets up 17 percent.
Operating profits in the first quarter were $85 million, a decline of 21 percent from 2007.
"First quarter production of NAFTA heavy-duty trucks totaled 49,000 units, just slightly ahead of production in the fourth quarter of 2007 but still down 34 percent from the first quarter of 2007," said Cutler. "We expect modest growth in second quarter production, and for 2008 as a whole, we now estimate the NAFTA heavy-duty market to total 230,000 units. This compares to our original expectation of 240,000 units."