Eaton posts sales and earnings decline
Eaton Corporation reported sales in the third quarter of 2015 were $5.2 billion, down 9 percent from the same period in 2014.
Net income of $445 million, or 97 cents per share, compared to income of $602 million, or $1.29, in the third quarter last year.
The sales decline consisted of 6 percent from negative currency translation and 3 percent from a decline in organic sales.
“Our sales in the third quarter were approximately $300 million lower than we had expected at the start of the quarter, with organic sales lower by $240 million and negative currency translation reducing sales by $60 million. The majority of our markets experienced weaker conditions in the quarter, which makes us cautious about the sales outlook looking forward,” said Alexander M. Cutler, Eaton chairman and chief executive officer.
Hydraulics segment sales were $599 million, down 18 percent from the third quarter of 2014. Organic sales declined 10 percent and negative currency translation contributed 8 percent. Operating profits in the third quarter were $44 million, a decrease of 49 percent.
Sales for the Electrical Products segment were $1.8 billion, down 6 percent from 2014.
Sales for the Electrical Systems and Services segment were $1.5 billion, down 10 percent from the third quarter of 2014.
Aerospace segment sales were $449 million, down 1 percent from the third quarter of 2014.
The Vehicle segment posted sales of $897 million, down 11 percent from the third quarter of 2014.
“As we begin to plan for 2016, it is apparent that markets are likely to remain soft,” said Cutler. “To deal with such weak markets, we will be expanding our 2016 restructuring program. We had been planning on this second restructuring program, in addition to the $145 million program we announced in the second quarter of 2015, to be on the order of $50 million to $60 million, but in light of current market weakness we are expanding the program to between $90 million and $100 million.”
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