Summary
Eaton Corp plc (ETN) reported a significant increase in net sales for the third quarter and first nine months of 2013, largely driven by the transformative acquisition of Cooper Industries plc completed in late 2012. Net sales surged 42% in the third quarter and 38% for the nine-month period, reflecting the integration of Cooper's operations. While reported net income attributable to shareholders also saw substantial growth (48% for Q3, 33% for nine months), diluted earnings per share experienced a slight dip for the nine-month period (-5%) due to an increased share count from the Cooper acquisition and purchase price accounting charges. The company benefited from a significantly lower effective income tax rate in both periods, primarily due to tax effects related to the Cooper acquisition. Management anticipates flat end markets for the full year 2013, indicating a shift towards organic growth reliance after the substantial integration efforts.
Financial Highlights
50 data points| Revenue | $5.61B |
| Cost of Revenue | $3.88B |
| Gross Profit | $1.72B |
| R&D Expenses | $166.00M |
| SG&A Expenses | $967.00M |
| Operating Income | $846.00M |
| Net Income | $510.00M |
| EPS (Basic) | $1.08 |
| EPS (Diluted) | $1.07 |
| Shares Outstanding (Basic) | 474.00M |
| Shares Outstanding (Diluted) | 477.20M |
Key Highlights
- 1Significant revenue growth driven by the Cooper Industries acquisition, with Q3 sales up 42% and nine-month sales up 38% year-over-year.
- 2Net income attributable to shareholders increased substantially by 48% in Q3 and 33% in the first nine months, aided by lower effective tax rates.
- 3Diluted EPS for the first nine months declined 5% due to a higher share count post-acquisition and purchase accounting charges.
- 4The company has re-segmented its operations into Electrical Products, Electrical Systems and Services, and Vehicle segments, reflecting the integration of Cooper's businesses.
- 5Acquisition integration and transaction costs amounted to $38 million in Q3 and $108 million for the first nine months, impacting reported results.
- 6Goodwill on the balance sheet increased slightly to $14.3 billion, primarily allocated to the Electrical Products and Electrical Systems and Services segments.
- 7The company continues to benefit from strong operational execution and positive core sales growth in key segments like Electrical, Aerospace, and Vehicle, despite overall subdued global economic conditions impacting some end markets.