We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Eaton Corporation’s (ETN - Free Report) earnings per share of $1.10 in first-quarter 2018 topped the Zacks Consensus Estimate of $1.06 by 3.8%. Reported earnings were at the high end of management’s guided range of $1.00-$1.10. Also, earnings were 14.6% higher than the year-ago figure.
Revenues
In the quarter, Eaton’s total revenues came in at $5,251 million, surpassing the Zacks Consensus Estimate of $1,199 million by 3.2%. The figure was 8.3% higher than the year-ago quarter.
The year-over-year sales increase includes 6% growth in organic sales and 3% rise in positive currency translations, which was better than the expected growth of 4% from organic sales and 1.0% from positive currency translations.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
In the first quarter, Electrical Products’ total sales were $1,732 million, up 4.9% from the year-ago quarter. Organic sales were up 1% and currency translation was a positive 4%. The quarter’s operating income was $307 million, up 7.3% year over year.
Electrical Systems and Services’ total sales were $1,381 million, up 3.6% from the year-ago quarter. Organic sales were up 2% and currency translation was a positive 2%. Operating income in the quarter was $167 million, up 7.8% year over year.
Hydraulics total sales were $710 million, up 20.9% from the year-ago quarter. Organic sales were up 16% and currency translation was a positive 5%. The quarter’s operating income was $90 million, up 50% year over year.
Aerospace total sales were $458 million, up 7% from the year-ago quarter. Organic sales were up 6% and currency translation was a positive 1%. Operating income in the quarter was $89 million, up 12.6% year over year.
Vehicle total sales were $893 million, up 13.6% from the year-ago quarter. Organic sales were up 13% and currency translation was a positive 3%. The quarter’s operating income was $132 million, up 22.2% year over year.
eMobility segment’s total sales were $77 million, up 22.2% from the year-ago quarter. Organic sales were up 19% and currency translation was a positive 3%. Operating income in the quarter was $11 million, flat year over year.
Quarterly Highlights
Cost of products sold in the reported quarter was $3.5 million, up 8.0% from the prior-year quarter.
Selling and administrative expenses were $889 million, up 1.5% from the year-ago quarter.
In the first quarter, the company’s research and development expenses were $156 million, up 9% from $143 million in the prior-year quarter.
Interest expenses of $70 million were up 14.7% from the prior-year quarter.
Order in Electrical Systems and Services, Hydraulics and Aerospace was up 8%, 4% and 1% year over year, respectively.
During the quarter, the company repurchased shares worth $300 million.
Financial Update
Eaton’s cash and short-term investments were $317 million as of Mar 31, 2018, compared with $561 million as of Dec 31, 2017.
As of Mar 31, 2017, long-term debt was $6,845 million compared with $7,167 million as of Dec 31, 2017.
Guidance
Second-quarter 2018 earnings per share are expected to be between $1.25 and $1.35.
The company raised its 2018 earnings expectation by 10 cents at both ends and is now expected in the range of $5.10-$5.30 per share for the year.
Eaton now expects its organic revenues to increase 5% in 2018, up 100 basis points. It now expects segment margins in 2018 to be between 16.4% and 17.0%, up from the previous expectation between 16.3% and 16.9%.
Eaton’s earnings and total revenues in the first quarter were better than expectations, thanks to the strong performance by every segment. Better-than-expected organic sales and positive currency translation also boosted the performance of the company.
We believe that improvement in end-market conditions is boosting the order book of the company. Its new eMobility segment is well placed to gain new contracts in the fast growing $33 billion market.
Upcoming Releases
Rexnord Corp. is scheduled to report fiscal fourth-quarter 2018 earnings on May 14, 2018. The Zacks Consensus Estimate for the quarter is pegged at 39 cents.
SPX FLOW Inc. (FLOW - Free Report) is slated to report first-quarter 2018 earnings on May 2. The Zacks Consensus Estimate is pegged at 37 cents.
CUI Global Inc. is slated to report first-quarter 2018 earnings on May 7. The Zacks Consensus Estimate is pegged at a loss of 9 cents.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Eaton (ETN) Tops Q1 Earnings Estimates, Lifts 2018 Guidance
Eaton Corporation’s (ETN - Free Report) earnings per share of $1.10 in first-quarter 2018 topped the Zacks Consensus Estimate of $1.06 by 3.8%. Reported earnings were at the high end of management’s guided range of $1.00-$1.10. Also, earnings were 14.6% higher than the year-ago figure.
Revenues
In the quarter, Eaton’s total revenues came in at $5,251 million, surpassing the Zacks Consensus Estimate of $1,199 million by 3.2%. The figure was 8.3% higher than the year-ago quarter.
The year-over-year sales increase includes 6% growth in organic sales and 3% rise in positive currency translations, which was better than the expected growth of 4% from organic sales and 1.0% from positive currency translations.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
Eaton Corporation, PLC Price, Consensus and EPS Surprise | Eaton Corporation, PLC Quote
Segment Details
In the first quarter, Electrical Products’ total sales were $1,732 million, up 4.9% from the year-ago quarter. Organic sales were up 1% and currency translation was a positive 4%. The quarter’s operating income was $307 million, up 7.3% year over year.
Electrical Systems and Services’ total sales were $1,381 million, up 3.6% from the year-ago quarter. Organic sales were up 2% and currency translation was a positive 2%. Operating income in the quarter was $167 million, up 7.8% year over year.
Hydraulics total sales were $710 million, up 20.9% from the year-ago quarter. Organic sales were up 16% and currency translation was a positive 5%. The quarter’s operating income was $90 million, up 50% year over year.
Aerospace total sales were $458 million, up 7% from the year-ago quarter. Organic sales were up 6% and currency translation was a positive 1%. Operating income in the quarter was $89 million, up 12.6% year over year.
Vehicle total sales were $893 million, up 13.6% from the year-ago quarter. Organic sales were up 13% and currency translation was a positive 3%. The quarter’s operating income was $132 million, up 22.2% year over year.
eMobility segment’s total sales were $77 million, up 22.2% from the year-ago quarter. Organic sales were up 19% and currency translation was a positive 3%. Operating income in the quarter was $11 million, flat year over year.
Quarterly Highlights
Cost of products sold in the reported quarter was $3.5 million, up 8.0% from the prior-year quarter.
Selling and administrative expenses were $889 million, up 1.5% from the year-ago quarter.
In the first quarter, the company’s research and development expenses were $156 million, up 9% from $143 million in the prior-year quarter.
Interest expenses of $70 million were up 14.7% from the prior-year quarter.
Order in Electrical Systems and Services, Hydraulics and Aerospace was up 8%, 4% and 1% year over year, respectively.
During the quarter, the company repurchased shares worth $300 million.
Financial Update
Eaton’s cash and short-term investments were $317 million as of Mar 31, 2018, compared with $561 million as of Dec 31, 2017.
As of Mar 31, 2017, long-term debt was $6,845 million compared with $7,167 million as of Dec 31, 2017.
Guidance
Second-quarter 2018 earnings per share are expected to be between $1.25 and $1.35.
The company raised its 2018 earnings expectation by 10 cents at both ends and is now expected in the range of $5.10-$5.30 per share for the year.
Eaton now expects its organic revenues to increase 5% in 2018, up 100 basis points. It now expects segment margins in 2018 to be between 16.4% and 17.0%, up from the previous expectation between 16.3% and 16.9%.
Zacks Rank
Eaton has a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our View
Eaton’s earnings and total revenues in the first quarter were better than expectations, thanks to the strong performance by every segment. Better-than-expected organic sales and positive currency translation also boosted the performance of the company.
We believe that improvement in end-market conditions is boosting the order book of the company. Its new eMobility segment is well placed to gain new contracts in the fast growing $33 billion market.
Upcoming Releases
Rexnord Corp. is scheduled to report fiscal fourth-quarter 2018 earnings on May 14, 2018. The Zacks Consensus Estimate for the quarter is pegged at 39 cents.
SPX FLOW Inc. (FLOW - Free Report) is slated to report first-quarter 2018 earnings on May 2. The Zacks Consensus Estimate is pegged at 37 cents.
CUI Global Inc. is slated to report first-quarter 2018 earnings on May 7. The Zacks Consensus Estimate is pegged at a loss of 9 cents.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>