Illinois Tool, Eaton, Parker Hannifin Offer Better Outlooks
20 Aprile 2010 - 5:50PM
Dow Jones News
A trio of U.S. diversified industrial companies whose product
lines and markets cover a wide swath of global manufacturing
activity raised their 2010 profit outlooks Tuesday, providing
further evidence of improving economic activity.
Eaton Corp. (ETN), Parker Hannifin Corp. (PH) and Illinois Tool
Works Inc. (ITW) reported quarterly results that topped Wall Street
analysts' expectations. Cost reductions imposed last year in
response to crumbling end-market demand are now magnifying profit
margins as order rates improve, the companies said.
Cleveland-based Parker Hannifin, whose business lines include
hydraulic and pneumatic gear and aerospace components, had a 23%
increase in overall orders during its fiscal third quarter ended
March 31.
"We are seeing positive tends across a broad range of products
and geographies," Parker Chairman and Chief Executive Don
Washkewicz said Tuesday during a conference call with analysts.
Parker Hannifin raised its earnings target for 2010 to a range
of $2.95 to $3.15 a share from its January forecast of $2.40 to
$2.80 a share. For the quarter, Parker reported a profit of $153.9
million, or 94 cents a share, up from $53.4 million, or 33 cents a
share, a year earlier. Revenue rose 12% to $2.61 billion.
Analysts polled by Thomson Reuters expected earnings of 77 cents
a share on $2.51 billion in revenue.
Eaton, meanwhile, swung to a first-quarter profit of $156
million, or 91 cents a share, from a year-earlier loss of $52
million, or 30 cents a share. Revenue jumped 10% from a year ago to
$3.1 billion. Analysts expected a profit of 83 cents a shares on
$3.06 billion in revenue.
"What a difference a year makes," said Eaton Chairman and Chief
Executive Alexander Cutler. "We had a very strong first quarter and
certainly a very different quarter than a year ago at this time.
We're really seeing strength in every quarter of the world."
Eaton supplies electrical and hydraulic systems and components
to several industrial sectors that were hit hard by the economic
recession, including auto and commercial truck manufacturing and
construction equipment. The Cleveland company raised its full-year
profit forecast by 45 cents a share from January to $4.15 to $4.45
a share.
Illinois Tool Works, which also supplies components to the
automotive industry, as well as manufacturing commercial kitchen
equipment, welding gear and building materials, predicted that it
will earn $2.72 to $3.08 a share in this year, up from the outlook
it gave in January of $2.43 to $2.93 a share.
The Glenview, Ill., company earned $294.3 million, or 58 cents a
share, in the first quarter, compared with a loss of $39.4 million,
or 8 cents a share, a year earlier. Revenue jumped 14% to $3.61
billion. Analysts expected Illinois Tool to earn 57 cents a share
on revenue of $3.64 billion.
"Our strong first quarter financial performance highlights our
business units' ability to achieve significant leverage on
increased revenues thanks to lower overhead and manufacturing costs
as a result of our restructuring programs," Chairman and Chief
Executive Officer David Speer said.
Illinois Tool's stock was recently up 4.4% at $51. Eaton was
trading down 0.8% $78.50. Parker Hannifin was up 0.3% at
$69.60.
-By Bob Tita, Dow Jones Newswires; 312-750-4129;
robert.tita@dowjones.com
(Matt Jarzemsky and Jodi Xu contributed to this report.)
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