"First quarter activity was even stronger than in last year's fourth quarter, and our successful new product initiatives have enabled Eaton to measurably outpace the market," said Eaton Chairman and CEO Stephen Hardis. "But we also struggled to meet surging demand, and profits were reduced by about $14 million in extraordinary premium freight costs to keep customer lines running.
"We are now confident that these extraordinary expenses are behind us," he continued. "With industry orders down, it is clear we are now past the peak in shipments for this year, and we will be able to move back into Eaton's production 'sweet spot.'"
Given the current mixed signals -- strong U.S. industry fundamentals and weak industry orders -- Hardis said their "best current guess" is that NAFTA Class 8 factory sales will be down 10-15% this year, to about 290,000 units. "Next year, with the truck industry adjustment completed and U.S. industry remaining strong, we would anticipate factory sales back to about 300,000 units."
Overall the company posted net income of $129 million on sales of $2.33 billion for first quarter versus $84 million on sales of $1.66 billion first quarter 1999. Automotive Components, Industrial & Commercial Controls, and Semiconductor Equipment also had record gains.