CLEVELAND - Eaton Corp., the industrial equipment maker, said Monday its third quarter profit fell 39 percent, but it sees improvement in key markets that should help it beat its earlier earnings projections for the full year.

Shares rose more than 7 percent in morning trading and briefly touched a 52-week high.

Alexander M. Cutler, chairman and CEO, said the company benefited from substantial cost-cutting in the past year. He also said sequential revenue trends show "the very early stages of recovery" in key Eaton markets as well as a benefit from stronger currencies against the dollar.

"As we look at our end markets, we expect the economic recovery we are beginning to experience in our early cycle markets will continue," Cutler said.

Cleveland-based Eaton said it earned $193 million, or $1.14 per share, down from $315 million, or $1.87 per share a year ago.

Excluding charges related to acquisitions, operating earnings per share amounted to $205 million, or $1.21 a share, down from $329 million, or $1.95 in the year-ago period.

Revenue fell 26 percent to $3.03 billion from $4.11 billion in the same quarter last year.

But Cutler said revenue actually rose 4 percent compared with the second quarter.

Analysts surveyed by Thomson Reuters expected, on average, earnings of 92 cents per share on revenue of $3.13 billion. Analysts typically exclude one-time items from their estimates.

The company expects net income in the fourth quarter will be between $1 per share and $1.10 per share and operating earnings excluding charges to integrate recent acquisitions of $1.15 to $1.25 a share.

For the full year, Eaton increased its forecast, saying it now expects net income per share will be between $2.05 and $2.15 with operating earnings of $2.40 to $2.50 a share.

In July, Eaton said it expected net income for the year to be between $1.65 per share and $1.85.

Analysts expect earnings of $1.06 per share for the fourth quarter and $1.99 per share for the full year. Those estimates typically exclude one-time items.

Shares jumped $4.35, or 7.2 percent, to $64.77 in morning trading Monday after rising to a 52-week high of $65 earlier in the session.

Eaton has about 70,000 employees and sells in more than 150 countries. It provides electrical components and systems for power distribution and makes hydraulic, aerospace and vehicle parts and systems.

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AP Business Writer Stephen Singer in Hartford contributed to this report.

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On the Net: http://www.eaton.com

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