Crane Co, USA

COMPANY WATCH

Crane Co, USA

Eaton Corp, USA

Key Figures (US$ million) Three months ended 30.6 2007

2006

660.9

558.2

281.4

250.0

71.8

66.1

Net Sales Of Which: Fluid Handling Operating Profit Of Which: Fluid Handling

33.4

29.9

Net Income

45.7

44.5

Six months ended 30.6 2007

2006

1289.1

1107.5

544.5

492.2

140.2

123.3

64.5

55.4

89.4

81.9

Net Sales Of Which: Fluid Handling Operating Profit Of Which: Fluid Handling Net Income

COMMENT Crane Co’s Fluid Handling segment increased second quarter 2007 sales by US$31.4 million, or 13%, including US$21.9 million (9%) of core sales and favourable foreign currency translation of US$9.5 million (4%). Operating profit increased US$3.5 million, or 12%. Fluid Handling margins remained at 12% reflecting more price competitive project work and investments in new products and systems to support future growth. The Fluid Handling segment backlog was US$259 million at 30 June 2007, compared with US$199 million at 30 June 2006 and US$211 million at 31 December 2006. The 30% increase in backlog over the second quarter of 2006 reflects increased global demand particularly from the chemical/pharmaceutical and energy industries, and generally higher demand from many commercial applications. 8

Filtration Industry Analyst

Overall Crane Co reported second quarter 2007 net income of US$45.7 million. Second quarter 2007 sales increased US$102.7 million, or 18%, including core business growth of US$42.3 million (8%), sales from acquired businesses (net of divestitures) of US$48.1 million (8%) and favourable foreign currency translation of US$12.3 million (2%). Group order backlog at 30 June 2007 totaled US$739 million, 16% higher than the backlog at the same point last year and 9% up on the backlog at 31 December 2006. “Strong year-over-year improvement in operating profits and margins in our Engineered Materials business and the positive impact of the 2006 acquisitions on our Merchandising Systems businesses were key drivers of our results,” said Crane president and CEO Eric Fast. ■ www.craneco.com

Key Figures (US$ million) Second quarter ended 30.6 2007

2006

Net Sales Of Which: Fluid Power

3248

3125

1150

1026

Cost of Products Sold

2346

2262

88

80

R&D Expenses Operating Profit Of Which: Fluid Power

406

395

130

110

Net Income

246

253

Six months ended 30.6 2007

2006

Net Sales Of Which: Fluid Power

6361

6081

2191

2000

Cost of Products Sold

4573

4386

R&D Expenses

170

159

Operating Profit Of Which: Fluid Power

807

769

247

214

Net Income

480

461

COMMENT Eaton Corp has posted sales of US$3.25 billion for the second quarter of fiscal 2007, 4% above its 2006 performance. Net income was down 3% on a year earlier at US$246 million. In the Fluid Power segment, home to Eaton’s filtration operations, second quarter sales were a record US$1.15 billion, 12% above the second quarter of 2006. Excluding the impact of acquisitions, filtration second quarter sales were up 5% compared to a year earlier. Filtration markets grew 2% on 2006, with global hydraulics shipments flat, the commercial and business jet aerospace market up 7%, the defence aerospace market up 6%, and European automotive production up 1%.

Operating profits in the second quarter for the Fluid Power division were a record US$130 million. Excluding acquisition integration charges of US$12 million, operating profits were US$142 million, an increase of 26% on a year earlier. Alexander Cutler, Eaton’s chair and CEO, said the company was pleased with the performance for the quarter, which had exceeded expectations. “We have been very successful on the acquisition front in 2007,” Cutler added. “So far this year, we have announced or closed seven acquisitions. The majority of the acquisition spending has been in two of our highest priority markets, aerospace and electrical power quality.” ■ www.eaton.com

September 2007