With a rise in net income, Eaton (ETN) beat Wall Street forecasts in the second quarter.

Earnings and Revenue
The company posted an EPS above analyst expectations, though revenues fell short of predictions. The company reported adjusted net income of $1.15 a share versus the $1.09 a share estimate and revenues of $4.07 billion versus the $4.24 billion estimate. The estimates of 14 analysts ranged from profit of $1.03 to profit of $1.26.

The company's net income for the quarter was $382 million. This is 13.7% higher than the year-ago quarter. Revenue fell 0.5% from $4.09 billion in the same period last year.

Company Fundamental Trends
Last quarter marked the third in a row of rising net income. Slumping revenue in the last quarter ends The company's streak of at least four consecutive quarters of revenue increases.

History Against Expectations
The company has managed to top estimates the last two quarters. In the first quarter, it beat expectations with net income of 92 cents versus a mean estimate of net income of 90 cents per share.

Official Comment: 

Alexander M. Cutler, Eaton chairman and chief executive officer, said, "We are pleased with our record second quarter results. Core sales grew three percent and acquisitions added one percent of growth, which were offset by a negative five percent from foreign exchange, largely from the lower value of the euro and the Brazilian real." 

"End markets grew three percent in the quarter. "Our revenues were impacted in the second quarter by lower than expected end market growth and by lower than expected foreign exchange rates," said Cutler.

"Nonetheless, we had strong incremental margins on our volume growth during the quarter, which allowed us to increase our segment margins to 14.7 percent, setting a new segment operating margin record for the second quarter. "We also had record second quarter cash flow, with our operating cash flow totaling $469 million," said Cutler. 

Estimates provided by Zacks Investment Research and company fundamentals from Xignite Financials.