UPDATE: Eaton Q2 Sales Surge 3%, Narrows Earnings Forecast

Eaton Corp plc

reported a drop in its second-quarter profit. The Dublin, Ireland-based company posted quarterly net income attributable to shareholders of $171 million, or $0.36 per share, compared to $494 million, or $1.04 per share, in the year-ago period. The recent quarter results included charges associated with acquisitions and litigation costs. Its operating earnings, excluding charges of $0.05 per share, came in at $0.41 per share. Its earnings, adjusted for the gain on the Aerospace divestitures, legal settlements and associated costs, Eaton's operating earnings came in at $1.11 per share. Eaton in April had expected operating earnings of $1.05 to $1.15 per share. Its sales climbed 3% to $5.77 billion versus $5.60 billion. However, analysts were expecting earnings of $1.14 per share on revenue of $5.79 billion. Sales for the electrical products business rose 4% to $1.8 billion, while hydraulics segment sales gained 2% to $787 million. Aerospace segment sales climbed 9% to $486 million, while vehicle segment sales increased 3% to $1.0 billion. Eaton's bookings in electrical products segment climbed 6%, while bookings in aerospace business rose 9%. Alexander M. Cutler, Eaton chairman and chief executive officer, said, “Our second quarter results, adjusted for unusual items, were above the midpoint of our original guidance for the quarter.” The company narrowed its FY14 operating earnings forecast to $4.50 to $4.70 per share from $4.50 to $4.90 per share. Eaton expects Q3 earnings of $1.20 to $1.30 per share, versus analysts' estimates of $1.33 per share. Eaton shares fell 0.93% to close at $76.75 yesterday.