Eaton Corporation (ETN - Free Report) reported first-quarter 2024 earnings of $2.40 per share, which surpassed the Zacks Consensus Estimate by 5.3%. The bottom line increased 27.7% year over year and beat the earnings guidance of $2.21-$2.31 per share. The improvement was due to increased project activity tied to megatrends, reindustrialization and infrastructure spending.
GAAP earnings for the reported quarter were $2.04, up 28.3% from $1.59 reported in the year-ago quarter. The difference between GAAP and operating earnings for the reported quarter was due to charges of 21 cents for intangible assets amortization, 12 cents for a multi-year restructuring program and 3 cents for acquisitions and divestitures.
Revenues
Total quarterly revenues were $5.94 billion, which surpassed the Zacks Consensus Estimate of $5.9 billion by 0.7%. The first-quarter revenue growth was entirely driven by organic sales growth. Total revenues improved 8.4% year over year.
Segmental Details
Electrical Americas’ total first-quarter sales were $2.69 billion, up 17.3% year over year due to increased organic sales. Operating profit was $785 million, up 50% year over year.
Electrical Global’s total sales were $1.5 billion, on par with the year-ago quarter. Operating profit of $284 million flat year over year.
Aerospace’s total sales were $0.87 billion, up 9% year over year, driven by organic sales growth. Operating profit was $201 million, up 12% year over year.
Vehicle’s total sales were $0.72 billion, down 2% year over year due to a decline in organic sales, partially offset by positive currency translation. Operating profit was $116 million, up 8% year over year.
The eMobility segment’s total sales were $158 million, up 7% year over year, driven by organic sales growth. Operating loss in the quarter was $4 million, on par with the year-ago quarter’s loss.
Highlights of the Release
Selling and administrative expenses were $1.02 billion, up 13.4% year over year.
Research and development expenses were $189 million, up 5.6% year over year. Interest expenses were $30 million, down 40% year over year.
Eaton’s backlog growth, with orders, increased 31%, 11% and 12% in Electrical Americas, Aerospace and Electric Global, respectively, on a rolling 12-month basis.
Financial Update
As of Mar 31, 2024, the company’s cash was $473 million, down from $488 million as of Dec 31, 2023.
As of Mar 31, 2024, ETN’s long-term debt was $8.2 billion, down 0.6% from $8.24 billion as of Dec 31, 2023.
Guidance
Eaton’s second-quarter 2024 earnings are expected in the range of $2.52-$2.62 per share. The Zacks Consensus Estimate is pegged at $2.55, lower than the mid-point of the company’s guidance. The company expects organic growth in the range of 6.5-8.5%.
Eaton now projects adjusted earnings per share in the range of $10.20-$10.60 for 2024, indicating an increase of 14% at the midpoint from the prior-year levels. The company raised its organic sales guidance for 2024 from 6.5-8.5% to 7-9%. Eaton also raised its segment margin guidance from 22.4-22.8% to 22.8-23.2%.
The company estimates its 2024 operating cash flow in the range of $4-$4.4 billion. Free cash flow is forecast in the range of $3.2-$3.6 billion.
Zacks Rank
Currently, Eaton has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Chart Industries, Inc (GTLS - Free Report) is scheduled to report first-quarter 2024 results on May 3. The Zacks Consensus Estimate for earnings is pegged at $1.88 per share, indicating an increase of 33.39% from the year-ago levels.
The long-term (three-to-five years) earnings growth rate is pinned at 30.4%. GTLS reported average earnings surprise of 75.8% in the last four reported quarter.
Ingersoll Rand Inc. (IR - Free Report) is scheduled to report first-quarter results on May 2. The Zacks Consensus Estimate for earnings is pegged at 69 cents per share, suggesting an increase of 6.2% from the prior-year levels.
The long-term earnings growth rate is pinned at 9.25%. IR reported average earnings surprise of 15.85% in the last four reported quarter.
The Manitowoc Company (MTW - Free Report) is scheduled to report first-quarter results on May 7, 2024. The Zacks Consensus Estimate for first-quarter earnings is pegged at 19 cents per share, indicating a decline of 58.7% from the year-ago actuals.
The Zacks Consensus Estimate for 2024 EPS is pegged at $1.31, implying a decline of 13.8% from the year-earlier levels. MTW reported average earnings surprise of 15.85% in the last four reported quarter.
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Eaton Corporation (ETN - Free Report) reported first-quarter 2024 earnings of $2.40 per share, which surpassed the Zacks Consensus Estimate by 5.3%. The bottom line increased 27.7% year over year and beat the earnings guidance of $2.21-$2.31 per share. The improvement was due to increased project activity tied to megatrends, reindustrialization and infrastructure spending.
GAAP earnings for the reported quarter were $2.04, up 28.3% from $1.59 reported in the year-ago quarter. The difference between GAAP and operating earnings for the reported quarter was due to charges of 21 cents for intangible assets amortization, 12 cents for a multi-year restructuring program and 3 cents for acquisitions and divestitures.
Revenues
Total quarterly revenues were $5.94 billion, which surpassed the Zacks Consensus Estimate of $5.9 billion by 0.7%. The first-quarter revenue growth was entirely driven by organic sales growth. Total revenues improved 8.4% year over year.
Segmental Details
Electrical Americas’ total first-quarter sales were $2.69 billion, up 17.3% year over year due to increased organic sales. Operating profit was $785 million, up 50% year over year.
Electrical Global’s total sales were $1.5 billion, on par with the year-ago quarter. Operating profit of $284 million flat year over year.
Aerospace’s total sales were $0.87 billion, up 9% year over year, driven by organic sales growth. Operating profit was $201 million, up 12% year over year.
Vehicle’s total sales were $0.72 billion, down 2% year over year due to a decline in organic sales, partially offset by positive currency translation. Operating profit was $116 million, up 8% year over year.
The eMobility segment’s total sales were $158 million, up 7% year over year, driven by organic sales growth. Operating loss in the quarter was $4 million, on par with the year-ago quarter’s loss.
Highlights of the Release
Selling and administrative expenses were $1.02 billion, up 13.4% year over year.
Research and development expenses were $189 million, up 5.6% year over year. Interest expenses were $30 million, down 40% year over year.
Eaton’s backlog growth, with orders, increased 31%, 11% and 12% in Electrical Americas, Aerospace and Electric Global, respectively, on a rolling 12-month basis.
Financial Update
As of Mar 31, 2024, the company’s cash was $473 million, down from $488 million as of Dec 31, 2023.
As of Mar 31, 2024, ETN’s long-term debt was $8.2 billion, down 0.6% from $8.24 billion as of Dec 31, 2023.
Guidance
Eaton’s second-quarter 2024 earnings are expected in the range of $2.52-$2.62 per share. The Zacks Consensus Estimate is pegged at $2.55, lower than the mid-point of the company’s guidance. The company expects organic growth in the range of 6.5-8.5%.
Eaton now projects adjusted earnings per share in the range of $10.20-$10.60 for 2024, indicating an increase of 14% at the midpoint from the prior-year levels. The company raised its organic sales guidance for 2024 from 6.5-8.5% to 7-9%. Eaton also raised its segment margin guidance from 22.4-22.8% to 22.8-23.2%.
The company estimates its 2024 operating cash flow in the range of $4-$4.4 billion. Free cash flow is forecast in the range of $3.2-$3.6 billion.
Zacks Rank
Currently, Eaton has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Chart Industries, Inc (GTLS - Free Report) is scheduled to report first-quarter 2024 results on May 3. The Zacks Consensus Estimate for earnings is pegged at $1.88 per share, indicating an increase of 33.39% from the year-ago levels.
The long-term (three-to-five years) earnings growth rate is pinned at 30.4%. GTLS reported average earnings surprise of 75.8% in the last four reported quarter.
Ingersoll Rand Inc. (IR - Free Report) is scheduled to report first-quarter results on May 2. The Zacks Consensus Estimate for earnings is pegged at 69 cents per share, suggesting an increase of 6.2% from the prior-year levels.
The long-term earnings growth rate is pinned at 9.25%. IR reported average earnings surprise of 15.85% in the last four reported quarter.
The Manitowoc Company (MTW - Free Report) is scheduled to report first-quarter results on May 7, 2024. The Zacks Consensus Estimate for first-quarter earnings is pegged at 19 cents per share, indicating a decline of 58.7% from the year-ago actuals.
The Zacks Consensus Estimate for 2024 EPS is pegged at $1.31, implying a decline of 13.8% from the year-earlier levels. MTW reported average earnings surprise of 15.85% in the last four reported quarter.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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