CLEVELAND (AP) -- Diversified manufacturer Eaton Corp. reported a surge in second-quarter profits Wednesday as global sales increased 16 percent over the same period last year when the entire industry was hammered by the recession.
"As we survey our end markets, the year is shaping up to be better than we had forecast in April," said Alexander M. Cutler, chairman and CEO.
Shares jumped 6 percent in early trading.
The Cleveland company, which makes hydraulics and electrical equipment used by manufacturers in numerous industries, reported earnings of $226 million, or $1.33 per share, on revenue of $3.4 billion in the April-June period.
Last year Eaton earned $29 million, or 17 cents per share, in the second quarter, on revenue of $2.9 billion.
Excluding acquisition charges, earnings of $1.36 per share beat the Wall Street forecast $1.17.
Reflecting the rosier outlook, the company improved its guidance and increased its dividend.
Eaton now expects third-quarter income per share of $1.25 to $1.35, with the Wall Street forecast $1.19. For the year, Eaton expects earnings of $4.75 to $4.95 per share, above the recent Wall Street forecast of $4.57.
The quarterly dividend was increased from 50 cents per share to 58 cents.
While debt problems in Europe are likely to slow the rate of growth in some European markets and the rate of economic growth in China has moderated slightly, "We anticipate solid global growth continuing during the second half of the year," Cutler said.
Cutler told analysts that Eaton's markets are well-positioned to benefit from the economic recovery. "The markets are actually playing right into some of our strengths," he said.
Cutler cited in particular federal stimulus grants spent in the U.S. on infrastructure and energy projects that rely on heavy equipment which tap into company product lines.
For the first six months of the year, Eaton earned $381 million, or $2.24 per share, on sales of $6.5 billion, compared with a six-month 2009 loss of $21 million, or 13 cents a share, on sales of $5.7 billion.
Company shares rose $3.96 to $73.02 Wednesday.
