I just returned from a short holiday to the East coast, and came back to more good news for the industry. Last week, Eaton Corp. reported that its second quarter earnings per share increased 47 percent, with net income per share of $0.97 for the second quarter of 2011. Earnings were $0.66 earned in the second quarter of 2010. Sales in the second quarter were $4.09 billion, 21 percent above the second quarter of 2010. Net income in the second quarter was $336 million compared to $226 million in 2010.
And this morning, Parker Hannifin reported that it finished its fiscal 2011 strong as well, with fourth quarter sales up 22 percent and profits up 31 percent. For the year, the company had a record sales of $12.3 billion and more than $1 billion in profits.
And finally, The NFPA shared news from the U.S. Census Bureau that 2010 total hydraulic shipments, both aerospace and non-aerospace, were $10.8 billion. I'm sure we'll see an jump in this number when 2011 numbers are reported.
The following statements come from press releases from the companies themselves but to summarize, both Eaton and Parker expect higher growth rates than they predicted at the start of the year. Let's hope that means not only record profits for big corporations, but a return to job growth for engineers, support staff and others in the industry.
And still I wonder what the economists say about these record numbers. They all predicted it would be 2014 before the fluid power markets rebounded back to its 2008 numbers but most companies, countries and individuals are reporting that 2011 has far exceeded previous records.
Eaton says its sales in the second quarter were 8 percent higher than in the first quarter of 2011.
According to Alexander M. Cutler, Eaton chairman and chief executive officer, “The year is shaping up to be better than we forecasted in April,” said Cutler. “We now anticipate our overall end markets will grow by 11 percent versus our earlier forecast of 10 percent.
“We anticipate net income per share for the third quarter of 2011 to be between $1.01 and $1.11,” said Cutler. “We expect 2011 to be a year of record sales and record profits. Our sales are projected to be 19 percent above 2010 and 6 percent above our previous annual sales record, which we achieved in 2008. Our operating earnings per share at the midpoint of our guidance is 42 percent above 2010 and 16 percent above our previous operating earnings per share record. We are particularly encouraged by the outlook for our 2011 results, given that many of our significant businesses are just beginning to recover from the economic downturn of 2008 and 2009.”
Hydraulics segment sales were $728 million, up 28 percent compared to the second quarter of 2010. Global hydraulics markets were up 18 percent in the quarter, with U.S. markets up 21 percent and non-U.S. markets up 16 percent. Operating profits in the second quarter were $120 million, up 56 percent compared to the second quarter of 2010.
“The global hydraulics markets in the second quarter continued the strong rebound we saw in the first quarter,” said Cutler. “Our bookings, adjusted for foreign exchange, increased 20 percent in the second quarter. For all of 2011, we continue to believe global hydraulics markets will grow 18 percent."
Cutler added, “We made further progress during the quarter in our strategy of building a significant filtration business, completing the acquisition of Internormen Technology Group and announcing an agreement to acquire E. Begerow GmbH. These acquisitions double the size of our filtration business and add important new products and end markets to our business.”
According to the Cleveland Plain Dealer, this morning's report from Parker was attributed to increases in industrial sales in North America and international markets. While sales growth was higher outside North America, the increase in sales here generated more profits.
Parker's full-year profits nearly doubled to $1.05 billion in fiscal 2011 from $554 million a year ago. Sales for the full year were up about 24 percent to $12.3 billion from $9.9 billion a year ago.
The company said it expects its sales growth to continue as orders for new products are up for all of its divisions going into fiscal 2012.