Eaton Warns; Doesn’t See Quick Turnaround

June 26, 2001 8:44 AM, EDT

Eaton Corp., the largest U.S. maker of truck transmissions, said it expects its second-quarter earnings to fall short of estimates and does not expect a rebound in North American markets this year.

Chairman Alexander Cutler said Eaton’s truck business is struggling to break even during “the worst industry conditions in over a decade.”

He also said that the European, Asian and South American markets are also beginning to decline in response to weakness in North America.

The Cleveland-based company said its earnings will be as much as 30% lower than analysts' forecast of $1.21 per share. It earned $1.65 per share in the second quarter of last year.

In addition, it lowered its expectations for the full year to $4.05 to $4.20 per share.

In the third quarter, Eaton said it expects to see gains of about $30 million from the sale of non-core businesses.

Earlier this year, the company said it would cut 600 jobs at its hydraulics operations in order to cut costs.

(Click here for the full press release.)

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