CORRECT: =Eaton Cuts Forecasts As Markets Weaken
27 Février 2009 - 5:40PM
Dow Jones News
Diversified manufacturer Eaton Corp. (ETN) said Friday its
markets have deteriorated more than anticipated a month ago,
causing the company to slash its 2009 earnings outlook.
The company sees 2009 operating earnings per share at $4 to
$4.60 a share. In January, the company forecast 2009 operating
earnings, which excludes special charges, at $4.20 to $5.20 a
share.
The company expects 2009 diluted earnings per share at $3.60 to
$4.20.
Eaton also lowered its first quarter guidance to a loss of 25
cents to 35 cents from a break-even level previously.
The revisions were prompted by downward revisions in the sales
outlooks for the Cleveland-based company's end markets, which
include electrical, aerospace and truck and auto manufacturing.
The company now expects sales to decline by 10% to 11% this year
from 2008, compared with a decrease of 7% to 8% previously.
During an investor conference in New York, Eaton executives said
the steep declines in order volume and spending seen in the fourth
quarter have persisted.
"We're going to see a first quarter that is pretty much a mirror
image of what went on in the fourth quarter," said James Meil,
Eaton's chief economist.
Eaton has initiated several cost-reduction strategies to align
its operations with diminished customer demand.
The company has already announced plans to trim its workforce by
8,600 employees, saving Eaton an estimated $165 million.
For those employees still on the job, Sandy Cutler, chairman and
chief executive, said wages will be frozen for the year. He said
all Eaton employees also will take one-week furloughs during the
first quarter to further reduce payroll costs.
The company revised its 2009 sales outlooks for all its end
markets, with the biggest declines seen in automotive, down 16%
from 2008; and trucking, down 20%. The company also now expects the
aerospace sales to slip 1%, from its previous estimate of a 2%
increase.
"It is very difficult to call where markets are going," Cutler
said.
Eaton's stock was last up 0.09% at $36.30.
-By Bob Tita, Dow Jones Newswires; 312-750-4129;
robert.tita@dowjones.com