Eaton Corp. earnings up 9% boosted in part by a strong heavy truck market
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Power management company Eaton Corporation improved third-quarter revenue and earnings, boosted in part by the strength of the Class 8 Truck market, for which the firm designs and manufactures transmissions, clutches, and fluid and air conveyance solutions.
Net income for the period ended September 30 totaled US$ 1.4 billion, or US$ 3.14 per share, up from US$ 523 million, or US$ 1.15, in last year’s third quarter.
However, net income was US$ 1.25 per share when excluding a gain of US$ 1.89 per share for the formation of the Eaton Cummins Automated Transmission Technologies joint venture. Eaton received US$ 500 million in cash for a 50% interest in the business. Nonetheless, the US$ 1.25 per share figure represents a 9% increase when compared to the third quarter 2016 result.
Net sales totaled US$ 5.2 billion, an increase of nearly 5% from US$ 4.9 billion a year ago. The electric products unit saw sales of US$ 1.9 billion, up 5% from a year ago, and profits of US$ 346 million, a rise of nearly 5%.
“North American Class 8 truck production grew 34% in the third quarter,” Eaton Chairman Craig Arnold said. “We now expect full-year 2017 production to be 250,000 units.”
“Segment margins in the third quarter were a record 16.4%,” said Arnold. “Excluding restructuring costs in the segments of US$ 11 million in the quarter, segment margins were 16.7%. Segment margins excluding restructuring costs were reduced in the quarter by 0.2% points due to the hurricanes and the Mexico City earthquake.
In Mexico, Eaton has manufacturing presence in Baja California, Chihuahua, Aguascalientes, Queretaro, Nuevo Leon, San Luis Potosi, Jalisco, Tamaulipas and the State of Mexico.