Eaton’s Third-Quarter Profit Rises 25 Percent

Eaton Corp., Cleveland, said its third-quarter profit rose 25 percent due in part to strong sales in its electrical segment. However, the company lowered its forecast for the fourth quarter and the full year.

Eaton reported earnings of $248 million for the quarter ended Sept. 30 compared with profits of $199 million a year ago. Sales rose to $3.12 billion from $2.77 billion.

Alexander Cutler, the company’s chairman and chief executive, said the residential construction market for the company’s electrical products is likely to weaken during the quarter.

Third-quarter sales for the electrical segment were $1.08 billion, up 10 percent over 2005 and a quarterly record. Operating profits in the third quarter were $116 million.

“End markets for our electrical business grew about 6 percent during the third quarter,” said Cutler. “While we expect the non-residential construction markets to remain very strong, the decline in the residential construction market is continuing. As a result, we expect end market growth in the electrical segment over the balance of the year to be slightly lower, at about 5 percent.

Cutler said margins were impacted during the quarter by the high level of copper prices. “The higher prices reduced third quarter operating profit in the electrical segment by $9 million compared to our plan at the start of the year.”