Eaton Reports Fourth Quarter Net Income Up 19%

Eaton Corp. has announced net income per share of $1.38 for the fourth quarter of 2005, an increase of 19 percent over net income per share of $1.16 in the fourth quarter of 2004.

Sales in the quarter were a record $2.8 billion, 8 percent above the same period in 2004. Net income was $210 million compared to $183 million in 2004, an increase of 15 percent.
Operating earnings for the fourth quarter of 2005 were $219 million compared to $194 million in 2004, an increase of 13 percent.
Sales growth in the fourth quarter of 8 percent consisted of 5 percent organic growth and 4 percent from acquisitions, offset by a 1 percent decline from lower exchange rates. The 5 percent organic growth was made up of 3 percent growth in end markets and 2 percent growth from outgrowing end markets.
For the full year 2005, sales were $11.1 billion, 13 percent above 2004. Net income of $805 million increased 24 percent over 2004, and net income per share of $5.23 rose 27 percent. Operating earnings per share for 2005 of $5.38 rose 25 percent above 2004. Operating earnings in 2005 totaled $829 million versus $675 million in 2004, an increase of 23 percent.
Alexander M. Cutler, Eaton chairman and chief executive officer, said, "We had another quarter of strong performance, marking this as the 15th quarter in a row where we have recorded a year-over-year increase in operating earnings per share of more than 10 percent.
"Looking at 2005 as a whole, we had an outstanding year," said Cutler. "Our sales grew 13 percent, operating earnings per share grew 25 percent, and our return on equity was 22 percent. In addition, we generated a record amount of cash, with operating cash flow in 2005 rising 35 percent, to just over $1.1 billion.”
The Truck segment posted sales of $549 million in the fourth quarter, up 10 percent compared to 2004. Operating profits in the quarter were $105 million. Operating profits before restructuring charges were $108 million, up 11 percent compared to the fourth quarter of 2004.
NAFTA heavy-duty production was up 5 percent compared to 2004, NAFTA medium-duty production was down 1 percent, European truck production was up 5 percent, and Brazilian vehicle production was up 1 percent.
"Production of NAFTA heavy-duty trucks in 2005 totaled 341,000 units, " said Cutler. "We believe that production in 2006 will likely stay at about the same level."