Eaton managed to return to profitability in the first quarter with positive income and a 10 percent boost in sales over the first quarter of 2009.
Net income was $155 million, up from its loss of $50 million in the year-ago period, while sales for the quarter landed at $3.1 billion.
"The expanding world economy drove growth in most of our markets and our newly-reset cost structure allowed us to realize attractive incremental margins," said Alexander M. Cutler, Eaton chairman and CEO. "The sales growth in the first quarter of 10 percent consisted of 5 percent organic growth and 5 percent growth due to higher foreign exchange rates. Our end markets grew 4 percent in the first quarter compared to the first quarter of 2009."
The company's truck segment posted sales of $453 million, up 55 percent from the first quarter of 2009. The segment reported operating profits in the first quarter of $46 million compared to a loss of $34 million in the first quarter of 2009.
"We were pleased with the 10.2 percent operating margin our Truck segment posted in the first quarter," said Cutler. "Despite still very low North American volumes, our margins reflect the benefits of the cost reduction actions taken in 2009."
The company expects net income for the second quarter to land between $1.05 and $1.15 per share, exceeding expectations by analysts at Bank of America Merrill Lynch.
"We now anticipate our end markets for all of 2010 will grow by 6 percent," said Cutler. "In general, we are seeing the strongest growth in Asia and Brazil, while many U.S. markets are starting to accelerate and Europe is recovering more modestly."
Eaton's earnings expectations for 2010 also exceed Bank of America Merrill Lynch's estimates. Overall, the analysts said the company's operating performance for the first quarter was solid.
Net income was $155 million, up from its loss of $50 million in the year-ago period, while sales for the quarter landed at $3.1 billion.
"The expanding world economy drove growth in most of our markets and our newly-reset cost structure allowed us to realize attractive incremental margins," said Alexander M. Cutler, Eaton chairman and CEO. "The sales growth in the first quarter of 10 percent consisted of 5 percent organic growth and 5 percent growth due to higher foreign exchange rates. Our end markets grew 4 percent in the first quarter compared to the first quarter of 2009."
The company's truck segment posted sales of $453 million, up 55 percent from the first quarter of 2009. The segment reported operating profits in the first quarter of $46 million compared to a loss of $34 million in the first quarter of 2009.
"We were pleased with the 10.2 percent operating margin our Truck segment posted in the first quarter," said Cutler. "Despite still very low North American volumes, our margins reflect the benefits of the cost reduction actions taken in 2009."
The company expects net income for the second quarter to land between $1.05 and $1.15 per share, exceeding expectations by analysts at Bank of America Merrill Lynch.
"We now anticipate our end markets for all of 2010 will grow by 6 percent," said Cutler. "In general, we are seeing the strongest growth in Asia and Brazil, while many U.S. markets are starting to accelerate and Europe is recovering more modestly."
Eaton's earnings expectations for 2010 also exceed Bank of America Merrill Lynch's estimates. Overall, the analysts said the company's operating performance for the first quarter was solid.
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