Eaton Corp. (ETN) anticipates about $1 billion in additional revenue over the next two years from U.S. government-sponsored economic stimulus spending on energy modernization and efficiency projects, Chairman and Chief Executive Alexander Cutler said Tuesday.

Cutler expects about half of the revenue will come in 2010 with the rest coming in 2011. The Cleveland-based company provides a variety of products and services for the control and distribution of electricity. The electrical sector accounted for 45% of Eaton's $15.4 billion in revenue last year.

"There is a very big push to get government buildings energy efficient," said Cutler during a J.P. Morgan investor conference in New York City broadcast over the Internet.

Cutler said the government installations targeted for energy usage upgrades include waste water treatment plants, public schools, office buildings and housing on U.S. military bases.

The nearly $800 billion U.S. economic stimulus program approved earlier this year has been criticized for not allocating enough money to infrastructure construction and repairs to benefit slumping U.S. manufacturers of capital equipment.

Eaton also makes hydraulic systems, transmissions and other components used in automobiles, commercial trucks, construction equipment and farm machinery. Eaton expects its overall end-market sales to decline by 21% to 22% this year from 2008.

Cutler said he expects gradual improvement in demand in 2010 as the global economy recovers.

"We think we'll see [Gross Domestic Product] go positive around the world next year," he said. "That's a big change from what we've seen in the last 18 months."

Eaton's stock was recently up 2.1% at $59.09 a share.

-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com