Eaton CEO Not Factoring Donald Trump Into Its Outlook
02 Febbraio 2017 - 4:16PM
Dow Jones News
By Joshua Jamerson
Eaton Corp.'s chief executive said the industrial conglomerate
"has not factored" policy proposals from President Donald Trump,
who has threatened to punish companies like Eaton for moving
manufacturing operations to Mexico, into its earnings outlook this
year.
The company said for 2017, it anticipates net income in a range
of $4.30 and $4.60 a share, based on flat organic revenue. Craig
Arnold, Eaton's CEO and chairman, made a point to note that the
company has "not factored any of the proposals of the new U.S.
administration into our guidance for the year, in light of
uncertainty about which policies will finally be enacted and when
the policies will take effect."
Mr. Trump made job creation a central campaign pitch, and he has
blasted firms from technology giants to auto makers for purportedly
sending jobs overseas. In the months after Mr. Trump's victory,
companies have announced a flurry of plans to retain or add U.S.
jobs.
Eaton announced in early 2016 that it will close its Berea,
Ohio, plant and instead buy the parts made at the plant from
outside suppliers and send them to an Eaton plant in Reynosa,
Mexico, for assembly. Eaton's core businesses in hydraulics, truck
transmissions and electric equipment have been hit hard by a
broad-based pullback in industrial spending, commodity prices and
manufacturing activity.
Eaton also moved its headquarters to Ireland as part of its
$11.8 billion acquisition of lighting and electrical equipment
manufacturer Cooper Industries in 2012.
The outlook came Thursday as the company reported profit and
revenue fell in the latest quarter. Mr. Arnold said the
fourth-quarter "shortfall in sales resulted solely" from negative
currency translation due to a stronger U.S. dollar following the
November presidential election. "Our organic sales for the quarter
came in slightly better than expected, and some segments showed
modestly improved order trends," he said.
Over all for the fourth quarter, Eaton reported a profit of $504
million, or $1.12 a share, down from $532 million, or $1.15 a
share, a year prior. Analysts expected $1.10 a share in
earnings.
Revenue declined to 4% to $4.87 billion, as analysts expected
$4.9 billion.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
February 02, 2017 10:01 ET (15:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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