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Eaton Third Quarter Earnings
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Eaton (NYSE:ETN) announced its results for the third quarter on October 31, 2012. Eaton is a power management company offering services in the sectors of electricity, hydraulics, aerospace, truck, and automotive.
Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: How To Decode A Company's Earnings Reports
The Numbers: Eaton fell short of estimates with $1.02 per share and revenues of $3.95 billion. Analysts were expecting $1.09 per share and revenues of $4.24 billion. Revenue fell 4.2% from the same period last year while EPS is down 4.7%. Revenue declined last quarter after shrinking 0.5% to $4.07 billion in the second quarter. The company's net income for the quarter was $345 million. According to the reported number, this is down 5.5% from last year's figures. With last quarter's falling profit, the company ends a run of four consecutive quarters of year-over-year profit increases.
Management Quote: Alexander M. Cutler, Eaton chairman and chief executive officer, said, "Our third quarter results came in very close to our expectations despite the slowdown in economic growth which we discussed in September at several investment conferences. Economic growth in the EU and China remained subdued during the quarter, while industrial activity in the U.S. decelerated during the quarter reflecting uncertainties over fiscal reforms that have led customers to hold back on purchases. As a result, we expect our markets for full year 2012 will show less growth than we had anticipated earlier in the year, with our markets for the year now estimated to grow between one to two percent."
A Look Back: Net income has increased 16.4% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 36.2% from the year-earlier quarter.
Looking Ahead: Over the past 90 days, the average estimate for the fourth quarter has fallen from $1.14 per share to $1.10, indicating that analysts are growing pessisimistic about the company's performance next quarter. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. For the fiscal year, the average estimate has moved down from $4.31 a share to $4.25 over the last 90 days.
Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: How To Decode A Company's Earnings Reports
The Numbers: Eaton fell short of estimates with $1.02 per share and revenues of $3.95 billion. Analysts were expecting $1.09 per share and revenues of $4.24 billion. Revenue fell 4.2% from the same period last year while EPS is down 4.7%. Revenue declined last quarter after shrinking 0.5% to $4.07 billion in the second quarter. The company's net income for the quarter was $345 million. According to the reported number, this is down 5.5% from last year's figures. With last quarter's falling profit, the company ends a run of four consecutive quarters of year-over-year profit increases.
Management Quote: Alexander M. Cutler, Eaton chairman and chief executive officer, said, "Our third quarter results came in very close to our expectations despite the slowdown in economic growth which we discussed in September at several investment conferences. Economic growth in the EU and China remained subdued during the quarter, while industrial activity in the U.S. decelerated during the quarter reflecting uncertainties over fiscal reforms that have led customers to hold back on purchases. As a result, we expect our markets for full year 2012 will show less growth than we had anticipated earlier in the year, with our markets for the year now estimated to grow between one to two percent."
A Look Back: Net income has increased 16.4% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 36.2% from the year-earlier quarter.
Looking Ahead: Over the past 90 days, the average estimate for the fourth quarter has fallen from $1.14 per share to $1.10, indicating that analysts are growing pessisimistic about the company's performance next quarter. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. For the fiscal year, the average estimate has moved down from $4.31 a share to $4.25 over the last 90 days.
by
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