- Third quarter earnings per share of $2.53, up 14% over 2023,
and record quarterly adjusted earnings per share of $2.84, up 15%
over 2023
- Record segment margins of 24.3%, 70 basis points above the
third quarter of 2023
- 8% organic sales growth, including approximately 50 basis
points of headwinds from Hurricane Helene and labor strikes in the
aerospace industry
- Strong backlog growth of 25% in Electrical and 14% in
Aerospace
- Order acceleration including Electrical Americas to 16% with
1.2 book-to-bill ratio on a rolling twelve-month basis
- Raised full year 2024 segment margin, earnings per share,
and adjusted earnings per share guidance
Intelligent power management company Eaton Corporation plc
(NYSE:ETN) today announced that earnings per share were $2.53 for
the third quarter of 2024, up 14% over the third quarter of 2023.
Excluding charges of $0.21 per share related to intangible
amortization, $0.11 per share related to a multi-year restructuring
program, and income of $0.01 per share related to acquisitions and
divestitures, adjusted earnings per share of $2.84 were a record
and up 15% over the third quarter of 2023.
Sales in the quarter were $6.3 billion, a third quarter record
and up 8% from the third quarter of 2023, driven entirely by
organic sales growth. Hurricane Helene and labor strikes in the
aerospace industry negatively impacted sales by approximately $50
million, or 50 basis points.
Segment margins were 24.3%, a quarterly record and a 70-basis
point improvement over the third quarter of 2023.
Operating cash flow was $1.3 billion and free cash flow was $1.1
billion, both quarterly records and up 15% and 23%, respectively,
over the same period in 2023.
Craig Arnold, Eaton chairman and chief executive officer, said,
“Our business and teams performed well in the quarter. We executed
effectively, resulting in order acceleration and further backlog
growth in an environment of continuing strong demand. As a result,
we’re confident in our ability to close the year strong with raised
earnings guidance and expect this positive momentum to continue
into 2025.”
Guidance
For the full year 2024, the company is raising the following
guidance:
- Segment margins from 23.3-23.7% to 23.5-23.9%
- Earnings per share to between $9.47 and $9.53, up 18% at the
midpoint over the prior year
- Adjusted earnings per share to between $10.75 and $10.81, up
18% at the midpoint over the prior year
For the fourth quarter of 2024, the company anticipates:
- Organic growth of 6-7%
- Segment margins of 23.6-24.0%
- Earnings per share between $2.42 and $2.48
- Adjusted earnings per share between $2.78 and $2.84
Business Segment Results
Sales for the Electrical Americas segment were a record $3.0
billion, up 14% from the third quarter of 2023, driven entirely by
organic sales growth. Operating profits were a record $892 million,
up 24% over the third quarter of 2023. Operating margins in the
quarter were a record 30.1%, up 240 basis points over the third
quarter of 2023.
The twelve-month rolling average of orders in the third quarter
was up 16% organically. Backlog at the end of September remained at
record levels, up 26% organically over September 2023.
Sales for the Electrical Global segment were a third quarter
record $1.6 billion, up 5% from the third quarter of 2023. Organic
sales were up 4%, and positive currency translation added 1%.
Operating profits were $294 million and operating margins in the
quarter were 18.7%.
The twelve-month rolling average of orders in the third quarter
was up 6% organically. Backlog at the end of September was up 19%
organically over September 2023.
On a rolling twelve-month basis, the book-to-bill ratio for the
Electrical businesses remained strong at 1.1.
Aerospace segment sales were a third quarter record $946
million, up 9% from the third quarter of 2023. Organic sales were
up 8%, and positive currency translation added 1%. Operating
profits were a record $230 million, up 10% over the third quarter
of 2023, and operating margins in the quarter were 24.4%, up 30
basis points over the third quarter of 2023.
The twelve-month rolling average of orders in the third quarter
was up 6% organically. The backlog at the end of September was up
14% organically over September 2023. On a rolling twelve-month
basis, the book-to-bill ratio for the Aerospace segment remained
strong at 1.1.
The Vehicle segment posted sales of $696 million, down 7% from
the third quarter of 2023, driven by organic sales decline of 6%
and negative currency translation of 1%. Operating profits were
$135 million, up 3% over the third quarter of 2023. Operating
margins in the quarter were a record 19.4%, up 200 basis points
over the third quarter of 2023.
eMobility segment sales were $167 million, a third quarter
record and up 2% over the third quarter of 2023. Organic sales were
up 1%, and positive currency translation added 1%. The segment
recorded an operating loss of $7 million as we continue to incur
launch costs related to new programs expected to ramp up over the
upcoming quarters.
Eaton is an intelligent power management company dedicated to
protecting the environment and improving the quality of life for
people everywhere. We make products for the data center, utility,
industrial, commercial, machine building, residential, aerospace
and mobility markets. We are guided by our commitment to do
business right, to operate sustainably and to help our customers
manage power ─ today and well into the future. By capitalizing on
the global growth trends of electrification and digitalization,
we’re accelerating the planet’s transition to renewable energy
sources, helping to solve the world’s most urgent power management
challenges, and building a more sustainable society for people
today and generations to come.
Eaton was founded in 1911 and has been listed on the New York
Stock Exchange for more than a century. We reported revenues of
$23.2 billion in 2023 and serve customers in more than 160
countries. For more information, visit www.eaton.com. Follow us on
LinkedIn.
Notice of conference call: Eaton’s conference call to discuss
its third quarter results is available to all interested parties
today as a live audio webcast at 11 a.m. United States Eastern time
via a link on Eaton’s home page. This news release can be accessed
under its headline on the home page. Also available on the website
before the call will be a presentation on third quarter results,
which will be covered during the call.
This news release contains forward-looking statements concerning
fourth quarter and full year 2024 earnings per share, adjusted
earnings per share and segment margins; fourth quarter 2024 organic
growth; 2025 earnings momentum; as well as anticipated multi-year
restructuring program charges and savings. These statements should
be used with caution and are subject to various risks and
uncertainties, many of which are outside the company’s control. The
following factors could cause actual results to differ materially
from those in the forward-looking statements: a global pandemic
such as COVID-19; geopolitical tensions or war, unanticipated
changes in the markets for the company’s business segments;
unanticipated downturns in business relationships with customers or
their purchases from us; competitive pressures on sales and
pricing; supply chain disruptions, unanticipated changes in the
cost of material, labor, and other production costs, or unexpected
costs that cannot be recouped in product pricing; the introduction
of competing technologies; unexpected technical or marketing
difficulties; unexpected claims, charges, litigation or dispute
resolutions; strikes or other labor unrest at Eaton or at our
customers or suppliers; natural disasters; the performance of
recent acquisitions; unanticipated difficulties completing or
integrating acquisitions; new laws and governmental regulations;
interest rate changes; changes in tax laws or tax regulations;
stock market and currency fluctuations; and unanticipated
deterioration of economic and financial conditions in the United
States and around the world. We do not assume any obligation to
update these forward-looking statements.
Financial Results
The company’s comparative financial results for the three months
ended September 30, 2024, are available on the company’s website,
www.eaton.com.
EATON CORPORATION plc
CONSOLIDATED STATEMENTS OF
INCOME
Three months ended September
30
Nine months ended September
30
(In millions except for per share
data)
2024
2023
2024
2023
Net sales
$
6,345
$
5,880
$
18,638
$
17,229
Cost of products sold
3,899
3,684
11,564
11,030
Selling and administrative expense
1,028
949
3,074
2,839
Research and development expense
207
187
593
553
Interest expense - net
29
33
88
124
Other income - net
(22
)
(52
)
(80
)
(56
)
Income before income taxes
1,204
1,079
3,399
2,739
Income tax expense
193
187
573
463
Net income
1,011
892
2,827
2,277
Less net income for noncontrolling
interests
(1
)
(1
)
(4
)
(4
)
Net income attributable to Eaton
ordinary shareholders
$
1,009
$
891
$
2,823
$
2,273
Net income per share attributable to
Eaton ordinary shareholders
Diluted
$
2.53
$
2.22
$
7.05
$
5.67
Basic
2.54
2.23
7.08
5.70
Weighted-average number of ordinary
shares outstanding
Diluted
398.9
401.6
400.6
400.9
Basic
397.1
399.4
398.7
399.0
Reconciliation of net income
attributable to Eaton ordinary shareholders to adjusted
earnings
Net income attributable to Eaton ordinary
shareholders
$
1,009
$
891
$
2,823
$
2,273
Excluding acquisition and divestiture
charges (income), after-tax
(4
)
14
17
54
Excluding restructuring program charges,
after-tax
43
5
104
37
Excluding intangible asset amortization
expense, after-tax
84
84
251
269
Adjusted earnings
$
1,132
$
994
$
3,194
$
2,633
Net income per share attributable to Eaton
ordinary shareholders - diluted
$
2.53
$
2.22
$
7.05
$
5.67
Excluding per share impact of acquisition
and divestiture charges (income), after-tax
(0.01
)
0.03
0.04
0.14
Excluding per share impact of
restructuring program charges, after-tax
0.11
0.01
0.26
0.09
Excluding per share impact of intangible
asset amortization expense, after-tax
0.21
0.21
0.62
0.67
Adjusted earnings per ordinary
share
$
2.84
$
2.47
$
7.97
$
6.57
See accompanying notes.
EATON CORPORATION plc
BUSINESS SEGMENT INFORMATION
Three months ended September
30
Nine months ended September
30
(In millions)
2024
2023
2024
2023
Net sales
Electrical Americas
$
2,963
$
2,594
$
8,530
$
7,426
Electrical Global
1,573
1,503
4,678
4,572
Aerospace
946
867
2,772
2,517
Vehicle
696
753
2,143
2,242
eMobility
167
163
514
471
Total net sales
$
6,345
$
5,880
$
18,638
$
17,229
Segment operating profit (loss)
Electrical Americas
$
892
$
719
$
2,537
$
1,913
Electrical Global
294
328
872
892
Aerospace
230
209
637
580
Vehicle
135
131
381
353
eMobility
(7
)
—
(9
)
(5
)
Total segment operating profit
1,544
1,386
4,417
3,732
Corporate
Intangible asset amortization expense
(106
)
(107
)
(319
)
(344
)
Interest expense - net
(29
)
(33
)
(88
)
(124
)
Pension and other postretirement benefits
income
9
11
29
33
Restructuring program charges
(54
)
(7
)
(132
)
(46
)
Other expense - net
(160
)
(171
)
(508
)
(512
)
Income before income taxes
1,204
1,079
3,399
2,739
Income tax expense
193
187
573
463
Net income
1,011
892
2,827
2,277
Less net income for noncontrolling
interests
(1
)
(1
)
(4
)
(4
)
Net income attributable to Eaton
ordinary shareholders
$
1,009
$
891
$
2,823
$
2,273
See accompanying notes.
EATON CORPORATION plc
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions)
September 30, 2024
December 31, 2023
Assets
Current assets
Cash
$
473
$
488
Short-term investments
1,521
2,121
Accounts receivable - net
4,886
4,475
Inventory
4,178
3,739
Prepaid expenses and other current
assets
1,094
851
Total current assets
12,152
11,675
Property, plant and equipment - net
3,711
3,530
Other noncurrent assets
Goodwill
15,044
14,977
Other intangible assets
4,809
5,091
Operating lease assets
817
648
Deferred income taxes
549
458
Other assets
2,154
2,052
Total assets
$
39,236
$
38,432
Liabilities and shareholders’
equity
Current liabilities
Short-term debt
$
3
$
8
Current portion of long-term debt
714
1,017
Accounts payable
3,609
3,365
Accrued compensation
687
676
Other current liabilities
2,928
2,680
Total current liabilities
7,941
7,747
Noncurrent liabilities
Long-term debt
8,678
8,244
Pension liabilities
709
768
Other postretirement benefits
liabilities
174
180
Operating lease liabilities
681
533
Deferred income taxes
387
402
Other noncurrent liabilities
1,503
1,489
Total noncurrent liabilities
12,132
11,616
Shareholders’ equity
Eaton shareholders’ equity
19,117
19,036
Noncontrolling interests
45
33
Total equity
19,162
19,069
Total liabilities and equity
$
39,236
$
38,432
See accompanying notes.
EATON CORPORATION plc NOTES TO THE THIRD QUARTER 2024
EARNINGS RELEASE
Amounts are in millions of dollars unless indicated otherwise
(per share data assume dilution). Columns and rows may not add and
the sum of components may not equal total amounts reported due to
rounding.
Note 1. NON-GAAP FINANCIAL INFORMATION
This earnings release includes certain non-GAAP financial
measures. These financial measures include adjusted earnings,
adjusted earnings per ordinary share, and free cash flow, each of
which differs from the most directly comparable measure calculated
in accordance with generally accepted accounting principles (GAAP).
A reconciliation of each of these financial measures to the most
directly comparable GAAP measure is included in this earnings
release. Management believes that these financial measures are
useful to investors because they provide additional meaningful
financial information that should be considered when assessing our
business performance and trends, and they allow investors to more
easily compare Eaton Corporation plc's (Eaton or the Company)
financial performance period to period. Management uses this
information in monitoring and evaluating the on-going performance
of Eaton and each business segment.
The Company's fourth quarter and full year net income per
ordinary share and adjusted earnings per ordinary share guidance
for 2024 is as follows:
Three months ended
December 31, 2024
Year ended
December 31, 2024
Net income per share attributable to Eaton
ordinary shareholders - diluted
$2.42 - $2.48
$9.47 - $9.53
Excluding per share impact of acquisition
and divestiture charges, after tax
0.03
0.07
Excluding per share impact of
restructuring program charges, after tax
0.11
0.37
Excluding per share impact of intangible
asset amortization expense, after tax
0.22
0.84
Adjusted earnings per ordinary share
$2.78 - $2.84
$10.75 - $10.81
A reconciliation of net income attributable to Eaton ordinary
shareholders per share to adjusted earnings per ordinary share is
as follows:
Year ended
December 31, 2023
Net income per share attributable to Eaton
ordinary shareholders - diluted
$
8.02
Excluding per share impact of acquisition
and divestiture charges, after tax
0.10
Excluding per share impact of
restructuring program charges, after tax
0.11
Excluding per share impact of intangible
asset amortization expense, after tax
0.89
Adjusted earnings per ordinary share
$
9.12
A reconciliation of operating cash flow to free cash flow is as
follows:
Three months ended September
30
(In millions)
2024
2023
Operating cash flow
$
1,308
$
1,140
Capital expenditures for property, plant
and equipment
(183
)
(227
)
Free cash flow
$
1,126
$
913
Note 2. ACQUISITIONS OF BUSINESSES
Acquisition of a 49% stake in NordicEPOD AS
On May 31, 2024, Eaton acquired a 49 percent stake in NordicEPOD
AS, which designs and assembles standardized power modules for data
centers in the Nordic region. Eaton accounts for this investment on
the equity method of accounting and it is reported within the
Electrical Global business segment.
Acquisition of Exertherm
On May 20, 2024, Eaton acquired Exertherm, a U.K.-based provider
of thermal monitoring solutions for electrical equipment. Exertherm
is reported within the Electrical Americas business segment.
Acquisition of a 49% stake in Jiangsu Ryan Electrical Co.
Ltd.
On April 23, 2023, Eaton acquired a 49 percent stake in Jiangsu
Ryan Electrical Co. Ltd., a manufacturer of power distribution and
sub-transmission transformers in China. Eaton accounts for this
investment on the equity method of accounting and it is reported
within the Electrical Global business segment.
Acquisition of Green Motion SA
On March 22, 2021, Eaton acquired Green Motion SA, a leading
designer and manufacturer of electric vehicle charging hardware and
related software based in Switzerland. Green Motion SA was acquired
for $106 million, including $49 million of cash paid at closing and
an initial estimate of $57 million for the fair value of contingent
future consideration based on 2023 and 2024 revenue performance.
The fair value of contingent consideration liabilities is estimated
by discounting contingent payments expected to be made, and may
increase or decrease based on changes in revenue estimates and
discount rates, with a maximum possible undiscounted value of $122
million. As of September 30, 2024, the fair value of the contingent
future payments has been reduced to $6 million based primarily on
lower revenue in 2023 and lower projected 2024 revenue compared to
the initial estimates at closing. This reduction is presented in
Other income - net on the Consolidated Statements of Income.
Note 3. ACQUISITION AND DIVESTITURE CHARGES
Eaton incurs integration charges and transaction costs to
acquire and integrate businesses, and transaction, separation and
other costs to divest and exit businesses. Eaton also recognizes
gains and losses on the sale of businesses. A summary of these
Corporate items is as follows:
Three months ended September
30
Nine months ended September
30
(In millions except for per share
data)
2024
2023
2024
2023
Acquisition integration, divestiture
charges and transaction costs (income)
$
(4
)
$
18
$
23
$
69
Income tax benefit
—
4
7
14
Total charges (income) after income
taxes
$
(4
)
$
14
$
17
$
54
Per ordinary share - diluted
$
(0.01
)
$
0.03
$
0.04
$
0.14
Acquisition integration, divestiture charges and transaction
costs (income) in 2024 and 2023 are primarily related to
acquisitions completed prior to 2023, including other charges and
income to acquire and exit businesses. 2024 also included the
reduction in fair value of contingent future consideration from the
Green Motion SA acquisition. These charges were included in Cost of
products sold, Selling and administrative expense, Research and
development expense, or Other income - net. In Business Segment
Information, the charges were included in Other expense - net.
Note 4. RESTRUCTURING CHARGES
In the second quarter of 2020, Eaton initiated a multi-year
restructuring program to reduce its cost structure and gain
efficiencies in its business segments and at corporate in order to
initially respond to declining market conditions brought on by the
COVID-19 pandemic. Since the inception of the program, the Company
incurred expenses of $199 million for workforce reductions and $184
million for plant closing and other costs, resulting in total
charges of $382 million through December 31, 2023. This
restructuring program was substantially complete at the end of 2023
and mature year benefits from the program are estimated to be $265
million and will be largely realized by the end of 2024.
During the first quarter of 2024, Eaton implemented a new
multi-year restructuring program to accelerate opportunities to
optimize its operations and global support structure. These actions
will better align the Company's functions to support anticipated
growth and drive greater effectiveness throughout the Company.
Restructuring charges incurred under this program were $54 million
in the third quarter and $132 million in the first nine months of
2024. This restructuring program is expected to be completed in
2026 and is expected to incur additional expenses related to
workforce reductions of $198 million and plant closing and other
costs of $45 million, resulting in total estimated charges of $375
million for the entire program. The Company expects mature year
benefits of $325 million when the multi-year program is fully
implemented.
A summary of restructuring program charges is as follows:
Three months ended September
30
Nine months ended September
30
(In millions except for per share
data)
2024
2023
2024
2023
Workforce reductions
$
10
$
—
$
78
$
17
Plant closing and other
44
7
55
29
Total before income taxes
54
7
132
46
Income tax benefit
11
1
28
8
Total after income taxes
$
43
$
5
$
104
$
37
Per ordinary share - diluted
$
0.11
$
0.01
$
0.26
$
0.09
Restructuring program charges (income) related to the following
segments:
Three months ended September
30
Nine months ended September
30
(In millions)
2024
2023
2024
2023
Electrical Americas
$
—
$
—
$
9
$
4
Electrical Global
42
5
70
22
Aerospace
(1
)
1
7
4
Vehicle
4
1
32
4
eMobility
2
—
2
6
Corporate
6
—
13
6
Total charges
$
54
$
7
$
132
$
46
These restructuring program charges were included in Cost of
products sold, Selling and administrative expense, Research and
development expense, or Other income – net, as appropriate. In
Business Segment Information, these restructuring program charges
are treated as Corporate items.
Note 5. INTANGIBLE ASSET AMORTIZATION EXPENSE
Intangible asset amortization expense is as follows:
Three months ended September
30
Nine months ended September
30
(In millions except for per share
data)
2024
2023
2024
2023
Intangible asset amortization expense
$
106
$
107
$
319
$
344
Income tax benefit
23
23
68
74
Total after income taxes
$
84
$
84
$
251
$
269
Per ordinary share - diluted
$
0.21
$
0.21
$
0.62
$
0.67
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241030417725/en/
Eaton Corporation plc Jennifer Tolhurst Media Relations +1 (440)
523-4006 jennifertolhurst@eaton.com
Yan Jin Investor Relations +1 (440) 523-7558
Grafico Azioni Eaton (NYSE:ETN)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni Eaton (NYSE:ETN)
Storico
Da Dic 2023 a Dic 2024
