ETN Eaton Corp New

A trio of U.S. manufacturers raised their full-year profit estimates Tuesday, providing another signal of a recovery in the country's manufacturing base.

Firmer demand from auto, aerospace and diversified industrial end users added to the positive momentum seen already in the first-quarter U.S. reporting season, though some companies remain hesitant about hiring.

Eaton Corp. (ETN), Parker Hannifin Corp. (PH) and Illinois Tool Works Inc. (ITW) all said cost cuts imposed last year in response to crumbling end-market demand are now magnifying profit margins as order rates improve.

The three also reported double-digit percentage increases in quarterly revenue, much of it tied to capital equipment and materials used by businesses and other manufacturers.

Illinois Tool Works' shares reached their highest level in almost two years, leading the industrial sector. They recently traded up 5% at $51.24. Parker and Eaton shares were both lower.

"What a difference a year makes," Eaton Chairman and Chief Executive Alexander Cutler said.

"We've been through two-and-a-half years of perfectly terrible markets," he said. "We're starting to see [capital spending] from customers driving these orders."

Eaton supplies electrical and hydraulic systems and components to several industrial sectors hit hard by the economic recession, including auto and commercial truck manufacturing and farm and construction equipment.

Order bookings in Eaton's hydraulics unit surged 88% in the first quarter. Cutler said the hydraulics unit typically recovers more slowly from cyclical business slumps because demand is closely tied to investments in factory equipment and construction and farm machinery.

Cutler said he expects Eaton will be able to accommodate the 10% to 11% increase in revenue expected in 2010 without hiring additional workers.

"We think we'll have plenty production capacity," he said in an interview. "That's why we don't think we'll have to add employment this year."

Eaton 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 share on $3.06 billion in revenue.

The Cleveland company raised its full-year profit forecast by 45 cents a share from January to $4.15 to $4.45 a share.

Cutler's optimism on demand trends was shared by Illinois Tool Works Chairman and Chief Executive David Speer.

"We have a growing sense of optimism that the business environment will improve as the year progresses," Speer said.

Illinois Tool Works supplies components to the automotive industry and makes commercial kitchen equipment, welding gear and building materials. It forecast earnings of $2.72 to $3.08 a share for 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.

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 trends across a broad range of products and geographies," Parker Chairman and Chief Executive Don Washkewicz said.

Parker Hannifin raised its per-share earnings target for 2010 to a range of $2.95 to $3.15 from its January forecast of $2.40 to $2.80. 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.

-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com

Grafico Azioni Eaton (NYSE:ETN)
Storico
Da Giu 2024 a Lug 2024

Grafico Azioni Eaton (NYSE:ETN)
Storico
Da Lug 2023 a Lug 2024