Truck component maker Eaton Corp. said its first-quarter profits fell 34% as sales of heavy trucks decreased. As a result the company will cut 600 positions over the next three months at its hydraulics operations to reduce costs.
Profit from operations fell to $73 million, or $1.05 a share, from continuing operations of $111 million, or $1.52 a share, in the year-earlier quarter. Sales dropped to 9.2% to $1.98 billion from $2.18 billion, the company said today.
Eaton's truck business lost $38 million, including a restructuring charge, compared with an operating profit of $60 million in the year-earlier period. Sales of hydraulic equipment slowed as new heavy-duty truck demand in North America declined.
However, company CEO Alexander M. Cutler remained optimistic, stating that Eaton reached its performance expectations.
“We are very pleased to have met our performance expectations despite very difficult operating conditions in several of our businesses,” Cutler said. “While specific segment results were mixed, we once again realized the benefits of our diversification and stronger business mix.”
Cutler added he expects current market conditions to continue through mid-year, and said Eaton will continue to size the business to these activity levels.
“It is difficult to have confidence in any projections given the current economic environment,” Cutler said. “But we remain comfortable with the consensus projections for our full year results on the assumption that a modest U.S. recovery will begin during this year's second half.”