Eaton Corp. announced net income per share of $1.59 for the fourth quarter of 2006, an increase of 15% over net income per share of $1.38 in the fourth quarter of 2005. Sales in the quarter were $3.1 billion, 10% above the same period in 2005. Net income was $241 million compared to $210 million in 2005, an increase of 15%.
Net income in both periods included charges related to acquisition integration. Before acquisition integration charges, operating earnings per share in the fourth quarter of 2006 were $1.66 compared to $1.43 per share in 2005, an increase of 16%. Operating earnings for the fourth quarter of 2006 were $251 million compared to $219 million in 2005, an increase of 15%. Sales growth in the fourth quarter of 10% consisted of 4% from organic growth, 4% from acquisitions, and 2% from higher exchange rates. End markets in the fourth quarter grew by 4%.
For the full year 2006, sales were $12.4 billion, 12% above 2005. Net income of $950 million increased 18% over 2005, and net income per share of $6.22 rose 19%. Operating earnings per share for 2006 of $6.39 rose 19% above 2005. Operating earnings in 2006 totaled $977 million versus $829 million in 2005, an increase of 18%.
Alexander M. Cutler, Eaton Chairman and Chief Executive Officer, said, "We had a strong fourth quarter, posting our nineteenth quarter in a row with year-over-year operating earnings per share growth of more than 10%. Equally significant is the balance of earnings in the quarter, with our Electrical and Fluid Power businesses representing 70% of our overall segment operating earnings. Looking at 2006 as a whole, we had a very solid year and are off to a good start on the goals we set for Eaton for the 2006 - 2010 time period. Our sales in 2006 grew 12%, operating earnings per share grew 19%, and our return on equity was 23%. In addition, we generated a record amount of cash, with operating cash flow in 2006 rising 25%, to more than $1.4 billion."
