Eaton Advances Most in a Year as Earnings Beat Estimatesby
Eaton Corp. rose the most in a year after reporting earnings that beat analyst estimates and announcing further cost cuts and share repurchases.
Earnings, excluding some items, were $1.17 a share in the fourth quarter, down from $1.27 a year earlier, the company said in a statement Wednesday. Analysts had predicted $1.10. Eaton said it will cut $418 million in annual costs -- expanding its restructuring program -- and plans to buy back $3 billion in shares through 2018.
With lower investment in the mining and oil-and-gas industry weighing on Eaton’s hydraulics and electrical-equipment businesses, Chief Executive Officer Sandy Cutler last year began reducing expenses. The decision to increase the effort came as the company forecast revenue from existing businesses will drop as much as 4 percent this year.
The shares rose 7.1 percent to $52.48 at the close in New York, the biggest one-day gain since a year ago. The advance left the stock up less than 1 percent this year, while the Standard & Poor’s 500 Index has declined 6.4 percent.