ETN 1Q EPS Ahead Of Consensus, Jefferies Estimates

Eaton Corporation ETN reported 1Q EPS of $0.84, excluding charges, “$0.04 ahead of our estimate and consensus of $0.80,” Jefferies reports. “Operating earnings projected for 2011 are $3.70-4.00 (a $0.15 increase from prior) versus consensus of $3.79/share,” Jefferies writes. “The stock should be up modestly as strength in hydraulics and truck margins were offset by weakness in electrical and aerospace. “Bottom Line: Better than expected revenues, higher other income and a slightly lower tax rate resulted in the $0.04 beat versus our estimate. EBIT margins were 63 bps below our expectations, though are seasonally lowest in 1Q. The incremental margin was 22% (before corporate) compared to our 31% estimate, as truck and hydraulics strength was offset by weaker aerospace and electrical. 2Q EPS of guidance of $0.90-0.96 compares to our estimate of $0.90 and consensus of $0.93.” Eaton Corporation closed Tuesday at $52.63.