ETN Eaton Corp New

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)

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