Eaton Corp announced record quarterly sales, net income, and cash flow for the second quarter of 2006. Net income per share was $1.64 for the second quarter of 2006, an increase of 20% over net income per share of $1.37 in the second quarter of 2005. Sales in the quarter were $3.19 billion, 12% above the same period in 2005. Net income was $253 million compared to $209 million in 2005, an increase of 21%.
Net income in both periods included charges for integration of acquisitions. Before these acquisition integration charges, operating earnings per share in the second quarter of 2006 were $1.68 versus $1.40 per share in 2005, an increase of 20%, and operating earnings for the second quarter of 2006 were $259 million compared to $214 million in 2005, an increase of 21%.
Alexander M. Cutler, Eaton chairman and chief executive officer, said, "As we survey our end markets, the year is shaping up about as we forecasted at the start of the year. We expect the strong growth we experienced in many of our markets in the first half to slow somewhat over the balance of the year as markets respond to the impact of the continuing rise in interest rates in the United States and many other countries. Overall, we anticipate our markets in 2006 to grow between 4 and 5%."
The truck segment posted sales of $646 million in the second quarter, up 8% compared to 2005. NAFTA heavy-duty production was up 7% compared to 2005, NAFTA medium-duty production was down 1%, and both European truck and Brazilian vehicle production were up 2%.
Operating profits in the second quarter were $133 million. Excluding acquisition integration charges of $2 million during the quarter, operating profits were $135 million, an increase of 13% over 2005.
"Second quarter production of NAFTA heavy-duty trucks totaled 97,000 units, about 6% more than in the first quarter of 2006," said Cutler. "Orders during the second quarter averaged 28,000 units per month, higher than we had expected at the start of the quarter. The backlog at the end of June was estimated to be about 205,000 units."