More Chinese Orders for Eaton

Eaton Corporation (ETN - Analyst Report) has been selected by the leading Chinese construction machinery producer, XCMG Group, to supply components for its first vibratory compactors with hydraulic transmissions. This is Eaton’s first significant heavy-duty pump and motor win in the China vibratory compactor platform, a milestone for the company.

XCMG said each hydraulic transmission will equip an Eaton hydrostatic heavy-duty variable pump and motor rated at peak pressures of 6,960 psi.

The original equipment manufacturer’s decision to use Shanghai-based Eaton Hydraulics Greater China’s pumps and motors for its next-generation vibratory compactors comes from XCMG’s satisfaction with Eaton pumps, steering units and valves installed on other XCMG equipment.

Eaton won the business based on the power density of its heavy-duty pumps and motors, as well as for its exacting global alignment with XCMG’s parts supply requirements, which included local manufacturing, multiple production sources for key hydraulic components, application expertise and a global service network.

Eaton’s Hydraulics business is a worldwide leader in the design, manufacture and marketing of a comprehensive line of reliable, high-efficiency hydraulic systems and components for use in mobile and stationary applications.

Second quarter 2011 results at Eaton’s Hydraulics business segment impressed with sales rising 28% over the prior year to $728 million. Operating profits came in at $120 million, up 56% from the corresponding quarter last year. Hydraulics markets grew 18%. Segment bookings increased 20% in the second quarter.

Cleveland, Ohio-based diversified power management company Eaton Corporation is a leading supplier of power accessories in the aerospace and automotive industries and has customers in 150 countries. Eaton has 70,000 employees and reported sales of $13.7 billion in 2010.

Eaton Corporation currently retains a Zacks #3 Rank (short-term Hold rating). We maintain our long-term Outperform rating on the stock. The company competes with ITT Corporation (ITT - Analyst Report) and Parker Hannifin Corporation (PH - Analyst Report).

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