Excluding a gain from the sale of the Fluid Power Div. and restructuring charges in both periods, Eaton earnings in the fourth quarter were $119 million versus last year's $91 million. After non-recurring items in both periods, net income was $224 for the quarter versus $72 million last year.
Income for the full year was $434 million on sales of $8.4 billion before all unusual items. Comparable 1998 earnings were $394 million on sales of $6.63 billion. After non-recurring items in both periods, net income was $617 million versus $349 million.
"While the big jump in fourth quarter sales were largely due to the addition of Aeroquip-Vickers, operating profits before charges were up 76% from last year, noted Eaton Chariman and CEO Stephen Hardis. "We took good advantage of boom conditions in North American truck markets, and gathering strength in the Industrial & Commercial Controls markets, while Semiconductor Equipment began an extraordinary worldwide rebound.
"If anything, the Truck Componenst market was too strong," he added, "and we were challenged to meet surging North American demand."
Eaton says NAFTA factory sales of Class 8 trucks were up 19%, European commercial truck production was up 3% and South American truck output was up 3% in fourth quarter. It's own sales of Truck Components jumped 19% to a record $427 million. Segment profits were up 17% to $54 million.
"In the face of remarkable fourth quarter strength in the NAFTA heavy truck market, we went to extraordinary lengths to meet urgent customer needs," noted Hardis. "Inevitably, those actions to keep our customers' plants running were very costly, and affected fourth quarter margins. As the market returns to a more stable annual rate of about 300,000 units, we certainly expect those outsized costs to dissipate."