Strong production and order rates for heavy-duty trucks boosted Cleveland, OH-based truck component supplier Eaton Corp’s net income to $208 million on 14% higher revenues of $3.1 billion for the first quarter of 2006. That equals a 21% jump over net income of $187 million in the same quarter in 2005, despite taking charges for acquisition absorption costs.
“We had a strong first quarter, with earnings per share above the top of our guidance,” said Alexander Cutler, Eaton’s chairman & CEO. “Our 14% sales growth consisted of 9% organic growth and 6% from our acquisitions offset by a 1% decline from lower exchange rates.”
Cutler anticipates 4% growth in Eaton’s end markets this year, slightly higher than originally anticipated, in part due to stronger than expected growth in both production and orders in the NAFTA heavy-duty truck market.
He said Eaton’s truck segment posted sales of $607 million in the first quarter, up 12% percent compared to the same period in 2005, with quarterly NAFTA heavy-duty truck production up 13% and medium-duty truck production down 4% compared to the same period last year. Cutler added that quarterly European truck production rose 1% and Brazilian vehicle production increased 8% as well over 2005 rates.
“First-quarter production of NAFTA heavy-duty trucks totaled 91,500 units, compared to 81,000 in the first quarter of 2005,” said Cutler. “Orders for NAFTA heavy-duty trucks during the first quarter averaged 46,000 units per month and the backlog at the end of March is estimated to be more than 220,000 units. We now estimate the NAFTA heavy-duty truck market in 2006 is likely to total 345,000 to 355,000 units.”