Eaton Jumps Most Since 2009 as U.S. Housing, Trucks Drive Profit

Eaton Corp., a maker of circuit breakers and large truck transmissions, rose the most since 2009 after reporting earnings that beat analysts’ estimates on strong U.S. housing demand and truck sales.

Profit excluding some acquisition-related costs rose 18 percent in the fourth quarter driven by a 5 percent increase in sales from existing businesses, Chief Executive Officer Sandy Cutler said on a conference call Tuesday with analysts. Profit on that basis of $1.27 a share exceeded analysts’ average estimate of $1.20 in a Bloomberg survey.

“We had a really strong fourth quarter,” Cutler said. “That really sets the basis for another record year in 2015.”

The results pushed Eaton’s shares up 8.4 percent to $69.80 at 12:03 p.m. in New York. The stock rose as high as $69.95, the biggest intraday gain since July 2009. The Dublin-based company, which operates from Cleveland, increased its electrical-products sales to U.S. construction firms after the $13 billion acquisition of Cooper Industries in November 2012, helping it weather a slump in Europe and slowdown in Asia.

Cutler forecast operating earnings, which exclude one-time items, of between $4.75 and $5.05 a share this year. That compared with $4.67 a share last year and with analysts’ average estimate for $4.97 in 2015. Weaker foreign currencies will shave 20 cents off 2015 earnings per share and a slump in mining equipment will hurt hydraulics sales, Cutler said.

Fourth-quarter net income, including costs of 4 cents a share related to acquisitions, was $1.23 a share. Sales rose 0.7 percent to $5.57 billion, shy of the average estimate of $5.59 billion.

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