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CLEVELAND, OHIO. . . Eaton Corporation today announced that sales, earnings and earnings per share for the second quarter and the first six months of 1995 were the best in the company's history. Net income for the second quarter rose 28 percent to $110 million, or $1.41 per share, on sales of $1.8 billion. This compares with 1994 second quarter net income of $86 million, or $1.13 per share, on sales of $1.6 billion.
Net income for the first six months of 1995 rose 36 percent to $218 million, or $2.79 per share, on sales of $3.5 billion. Comparable first-half earnings in 1994 were $160 million, or $2.15 per share, on sales of $2.9 billion.
Eaton Chairman and Chief Executive Officer William E. Butler said, "We're pleased to report record financial results despite the flattening growth rate of the U. S. economy in the second quarter. We're encouraged that progress is continuing in our plan to achieve sustained profitable growth.
"Although orders for Class 8 trucks in North America declined compared to the superheated first quarter, backlogs remain very high, and we continue to believe that production levels this year will equal or exceed the record 225,000 units in 1994. Sales of Eaton's passenger car components rose 10 percent from the year-ago quarter," he said, "notwithstanding the 4 percent reduction in North American production of passenger cars."
In the Electrical and Electronic Controls Segment, Butler noted that Cutler-Hammer sales rose 6 percent during the quarter. "Sales gains in our Cutler-Hammer products were moderated by the slowdown in residential construction, which also affected the sales of appliance controls. Sales in the industrial control and non-residential construction markets remain strong, however, and we expect this trend to continue. We are also anticipating increased residential construction as the effect of lower long-term interest rates takes hold," he said.
Butler said the worldwide market for Eaton's semiconductor equipment is exceedingly strong, nearly doubling on a year-to-year basis. "The market for our ion implanters has surged as semiconductor manufacturers have geared up to meet increased demand," he said. "Our new high-energy product line, introduced last year, has already captured more than half of the available market." Eaton's worldwide semiconductor equipment sales, including those of the company's joint venture in Japan, now exceed half a billion dollars annually.
"In Europe, we've seen a significant turnaround in the economic environment, though profits still do not meet expectations. We expect our European businesses will benefit substantially from our restructuring programs in 1994 and 1995," Butler said.
During the quarter, Eaton acquired the electrical switchgear and controls business of Email Ltd. of Australia as well as a Dutch automotive controls company, the IKU Group of The Netherlands. The Email acquisition, which includes facilities in Australia, New Zealand, Singapore and the Philippines, manufactures a wide range of electrical equipment, including circuit breakers, panelboards, contactors and switchgear. IKU, which had sales exceeding $80 million in 1994 and has facilities in The Netherlands, Three Rivers, Michigan, and Poland, is a leading supplier of electric mirror actuators for automotive manufacturers. This acquisition strengthened Eaton's automotive and appliance controls business, which will have annual sales of about $1 billion in 1995.
On May 25, 1995, Eaton paid to shareholders a dividend of 40 cents per common share. This was the first dividend payment since the dividend was raised from 30 cents a share on April 26, 1995, which was the second increase in less than two years. The annualized dividend is now $1.60 per common share.
In the second quarter, Eaton also sold $150 million of 6 1/2 percent debentures due June 1, 2025. The debentures, priced at 99.716 percent, include a provision that gives the holder an option to "put" the debentures back to Eaton at par at the end of 10 years, on a one-time basis. The company used the proceeds to refinance outstanding commercial paper. Eaton Corporation is a global manufacturer of highly engineered products which serve vehicle, industrial, construction, commercial, aerospace and marine 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.