“Our operating cash flow in the third quarter was a quarterly record $704 million,” said Cutler. “Over the last 12 months, operating cash flow has totaled $2.1 billion. We expect operating cash flow in the fourth quarter to be even stronger than in the third quarter, reflecting the typical seasonal decline in working capital as we go through year end. We repurchased $31 million of debt during the third quarter and plan to repurchase additional debt as opportunities arise.
“Due to the recent softness in the NAFTA Class 8 truck market and continued weakness in the global hydraulics markets, we now believe our overall markets in 2013 are likely to be flat,” said Cutler. “This compares to our expectations at the end of the second quarter that our markets would grow 1 percent. For the fourth quarter, we anticipate our sales are likely to be slightly lower than the third quarter, reflecting normal seasonality. We expect operating earnings per share in the fourth quarter, after excluding an estimated $40 million to integrate our recent acquisitions, to be between $1.00 and $1.10. Based on this fourth quarter guidance, for all of 2013 we are narrowing our range for operating earnings per share from between $4.05 and $4.25 to between $4.05 and $4.15.”
Business Segment Results
Third quarter sales for the Electrical Products segment were $1.8 billion, up 98 percent over 2012, reflecting the impact of the Cooper Industries acquisition. Operating profits in the third quarter were $301 million. Excluding acquisition integration charges of $9 million during the quarter, operating profits were $310 million, up 79 percent over results in 2012.“Our bookings in the Electrical Products segment increased 7 percent from the combined bookings of Eaton and legacy Cooper in the third quarter a year ago,” said Cutler. “We now believe that our Electrical Products markets in 2013 will grow by 1 percent, 1/2 percent lower than our expectation at the end of the second quarter.