Eaton Earnings Dip, Led by Vehicle Unit
Eaton Corp. reported its net income and revenue slipped for the fourth quarter and the full year as performance at its vehicle segment declined the sharpest.
Total net income for the quarter ended Dec. 31 dipped 5% to $508 million, or $1.12 in diluted earnings per share, compared with $532 million, or $1.15, year over year.
Revenue was $4.8 billion, down 4% compared with $5 billion a year earlier.
The vehicle segment posted sales of $741 million, down $100 million, or 12%, from the fourth quarter of 2015, entirely due to a decline in organic sales, the Dublin, Ireland-based company said Feb. 2.
The vehicle unit had the largest drop in revenue among the company’s five segments.
Operating profits in the fourth quarter were $97 million, down 37% from $155 million in the fourth quarter of 2015, the company said.
It noted restructuring costs of $13 million in the fourth quarter of 2016 versus $1 million in the fourth quarter of 2015 affected the operating profits in the most recent quarter.
The unit’s operating margins in the quarter were 13.1%, and excluding restructuring costs, 14.8%, Eaton said.
“North American Class 8 truck production was 228,000 units in 2016, slightly above our last forecast. Automotive markets around the world were generally strong in 2016, with record volumes in the U.S. and China,” Craig Arnold, Eaton chairman and CEO, said in a statement.
Looking ahead, Arnold said, “We expect Nafta Class 8 production in 2017 to be flat and global light vehicle markets to show modest growth.”
Year-to-date, Eaton saw net income fall to $1.92 billion, or $4.21, compared with $1.98 billion, or $4.23, in the 2015 period.
Revenue slid to $19.7 billion, down from $20.8 billion in the 2015 period.
Eaton supplies transmissions, clutches and lubricants, among other products, to the commercial vehicle industry, including the aftermarket.
