Integration of Cooper Industries Leads to Record Breaking Quarter

Eaton CorporationEaton Corporation, a company which deals with different fields in the production industry has announced a record breaking second quarter this year. They were able to gain up to $519 million during the second quarter which is 32 percent more compared to the same period last year. They have attributed this to the incorporation of Cooper Industries.

In addition, the earning per share has also increased to $1.09. Though this may be a decrease compared to the numbers reflected back in the second quarter of 2012, the increase in sales made it insignificant to its record breaking quarter of this year.

Alexander M. Cutler, the company’s chairman and chief executive officer said that their earnings per share started the second quarter started out just below their standard price. However, they were able to turn things around with the help of their operating margins which was rated at 15.6 percent. It was the driving force behind the record breaking quarter which resulted in record breaking sales in the quarter. Again, he also attributed the performance with the incorporation of Cooper Industries into their company.

The 38 percent that Eaton Corporation was able to gain in the second quarter of this year had a two percent loss when it came to core sales. However, this was relieved by a gain of 40 percent from their several acquisitions. The two percent decline in their core sales has been attributed to the economic instability which plagued the entire world especially during latter half of the last year and during the early part of this year. So, the slight decline in their performance with regards to the core sales is not to be blamed on them, but instead to the economic condition that the world is experiencing.

Cutler also added that when 2013 came, they were expecting only two to three percent increases in their market sales. That prediction was based on the current, unstable economic conditions that the world is experiencing.

“However, with the economic performance performing way under than what we expected, I guess, we will only be experiencing an increase of one percent this year,” Alexander Cutler added.

The second quarter of Eaton Corporation generated good enough cash flow when it gained $609 million with $480 million of free cash flow. This came to be because of the $129 million in capital spending. In order to improve their sales, with free cash flow as the basis, the company is planning to reduce its capital spending. With that being said, they are expecting their cash flow at the end of this year to be between $2.5 billion and $2.6 billion.

However, with the help of the integration of Cooper Industries into the company, they were able to increase savings up to $115 million, which is $25 million than what they first announced. If this pace keeps up, Eaton Corporation will be able to gain up to $210 million by the next year.

Cutler also added that they will be expecting changes in their fortune in the third quarter. They are expecting their share to be sold at a range of $1.05 to $1.15.