[R]1:00PM New York – Eaton lifted its guidance for the full year and reported sales in the first quarter rose 12% and earnings gained 5%.[/R]

Eaton Corporation a diversified industrial equipments manufacturer today reported first quarter 2008 sales increase of 12% to $3.5 billion from $3.11 billion from a year ago.

Net income in the quarter climbed $247 million or $1.64 per share compared with $234 million or $1.56 per share, in the same quarter a year ago.

Operating earnings for the first quarter of 2008 were $256 million or $1.70 earnings per share an increase of 5% compared with $243 million or $1.62 earnings per share in the same period of 2007.

Record sales were in the electrical equipment segment of $1.3 billion, up 20% over 2007 and with operating profit of $160 million.

Chairman and chief executive Alexander M Cutler said, “End markets for our electrical business grew 7% during the first quarter. Both U.S. and non-U.S. markets grew 7% in the quarter.

For the full year, we are maintaining our prior forecast that our global electrical markets will grow by 5 to 6%.”

Hydraulics segment sales were a record $657 million, up 14% compared to the first quarter of 2007. Operating profits in the first quarter were $78 million, excluding acquisition integration charges of $2 million during the quarter. Operating profits totaled $80 million, an increase of 14% over the first quarter of 2007.

Aerospace sales were a record $430 million, 23% above the first quarter of 2007. The 23% growth in sales includes 11% growth from acquisitions. Operating profits in the first quarter were $63 million.

Truck segment sales declined 2% to $567 million compared to the first quarter of 2007. Truck market in the U.S. declined 24% but the non-U.S. markets were up 17%. Operating profits in the first quarter were $85 million, a decline of 21% from 2007.

The automotive sales were $538 million, 2% higher than the comparable quarter of 2007. Global automotive sales were down 1%, with U.S. markets down 8% and non-U.S. markets were up 5%. Operating profits in the first quarter were $46 million.

The company forecasts net income per share for the second quarter of 2008 between $1.80 and $1.90. Operating earnings per share, which excludes charges to integrate recent acquisitions, are estimated between $1.90 and $2.00.

The company raised full-year guidance, on the back of strong first quarter, by 5 cents to net income per share of $7.30 to $7.80 and operating earnings per share of $7.80 to $8.30.