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CLEVELAND, OH...Eaton Corporation today announced record sales, earnings and earnings per share for the third quarter and the first nine months of 1995. Net income for the third quarter rose 9 percent to $91 million, or $ 1.18 per share, on sales of $1.7 billion. This compares with 1994 third quarter net income of $84 million, or $1.10 per share, on sales of $1.5 billion.
Net income for the first nine months of 1995 rose 27 percent to $309 million, or $3.97 per share, on sales of $5.2 billion. Comparable first nine months in 1994 were $244 million, or $3.25 per share, on sales of $4.4 billion.
Comparative Financial Summary Condensed Consolidated Balance Sheets Business Segment Information Statements of Consolidated Income Eaton Chairman William E. Butler said, "Despite some difficulties which hurt our performance in the third quarter, we are pleased to report record third quarter and year-to-date results for the company. With the industrial economy showing some signs of revival from its mid-year pause, we are comfortable that we will be able to finish with a record 1995."
Stephen R. Hardis, Eaton Chief Executive Officer, pointed out that sales of Truck Components were 6 percent above one year ago despite declines in North American production of about 2 percent. He said, "Demand in Europe for our new heavy-duty synchronized transmission has exceeded our expectations, but the costs of bringing this new product to market while meeting market demand hurt vehicle component margins somewhat in the third quarter." Hardis noted that Passenger Car Components sales also exceeded market demand, rising 3 percent above 1994 levels despite a 4 percent decline in North American production.
"Performance in the Electrical and Electronic Controls Segment was mixed, and profits were below expectations," observed Hardis. "Sales of Industrial and Commercial Controls in the seasonally strong third quarter were 6 percent above a year ago despite lower residential construction. At Cutler-Hammer, transitional plant integration difficulties and the effects of two September hurricanes on our plants in Puerto Rico reduced profits by about $7 million. Sales of Automotive and Appliance Controls were 26 percent above one year ago, boosted in part by the recent Lectron and IKU acquisitions. Sales also benefited from increased penetration on several new automotive platforms, but unanticipated program launch costs also hurt third quarter profits by about $5 million."
Hardis said that worldwide demand for Eaton's semiconductor capital equipment continues to be extraordinarily strong, with sales up 81 percent on a year-to-year basis. He said, "We are enjoying both surging markets and share gains across our entire line of ion implanters. Based on industry capital spending plans, we expect sales of our half-billion-dollar business to rise significantly in 1996. In the third quarter, Eaton broke ground for a new facility in Austin, Texas which significantly expands our capacity to serve this growing market.
"In Europe, recovery continues, but profits are still below our longer-term expectations. We continued our program to restructure several of these operations in the third quarter at a pretax cost of about $5 million. We expect performance to improve measurably in the years ahead as we realize the benefits of the restructuring programs in 1994-1995. In Latin America, business was off about 15 percent versus a year ago, with weakness in Mexico and Brazil being partially offset by sales of our recently acquired majority interest in Mallory Controles Ltda. Finally, activity in the Pacific Region is up sharply despite continued recession in Japan. Sales are 43 percent ahead of a year ago, due in part to the acquisition of Emwest in April, 1995." Chairman Butler concluded, "I'm encouraged that we have been able to continue our progress toward building an enterprise capable of achieving sustainable, profitable growth through the economic cycle, while continuing to invest in the restructuring of some of our businesses. Our third quarter demonstrates that nothing in life or in business proceeds on a straight line. However, assuming that the global economy holds up, we are comfortable we can continue to demonstrate the earnings potential of Eaton Corporation again in 1996. More importantly, as I pass the reins to Steve Hardis, I'm more confident than ever that we have assembled a team capable of achieving our reaching growth goals and sustained superior profitability."
As announced earlier, Hardis became Chief Executive Officer of Eaton Corporation on September 1, 1995. He will succeed Butler as Chairman on January 1, 1996.
Eaton Corporation is a global manufacturer of highly engineered products which serve vehicle, industrial, construction, commercial and aerospace markets. Principal products include truck transmissions and axles, engine components, hydraulic products, electrical power distribution and control equipment, ion implanters and a wide variety of controls. Headquartered at Eaton Center in Cleveland, the company has 52,000 employees and 150 manufacturing sites in 22 countries around the world. Sales for 1994 were $6.1 billion.