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Eaton's (ETN) Q4 Earnings and Revenues Surpass Estimates
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Eaton Corporation (ETN - Free Report) reported fourth-quarter 2020 earnings of $1.28 per share, which surpassed the Zacks Consensus Estimate of $1.22 by 4.9%. However, earnings were down 6.6% year over year.
GAAP earnings for the reported quarter were $1.18 per share compared with $1.09 in the year-ago period. The difference between GAAP and operating earnings for the reported quarter was due to a one-time charge of 6 cents associated with acquisitions and divestitures, as well as 4 cents related to a multi-year restructuring program.
Revenues
Total quarterly revenues came in at $4,687 million, which beat the Zacks Consensus Estimate of $4,623 million by 1.4%. However, total revenues decreased 10.5% from the year-ago quarter.
For the reported quarter, organic sales were down 5% from the prior-year period. Divestiture of Lighting and Automotive Fluid Conveyance businesses resulted in an 8% decline in revenues. Nonetheless, acquired assets added 2% to fourth-quarter sales.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
Electrical Americas’ total fourth-quarter sales were $1,703 million, down 18.5% from the year-ago level. The decline was due to the impact of the Lighting business divestiture and fall in organic sales.
Electrical Global’s total sales were $1,252 million, down 5% from the year-ago quarter. Organic sales were down 7% from the year-ago quarter, primarily due to deterioration in oil and gas and industrial markets. Positive currency translation offset the negatives by 2%.
Hydraulics’ total sales were $485 million, up 2% from the year-ago quarter. The revenue growth was due to an improvement in organic sales.
Aerospace total sales were $542 million, down 13% from the year-ago quarter. Organic sales were down 25% year over year, partially offset by an 11% sales increase from the acquisition of Souriau-Sunbank and 1% growth from the impact of positive currency translation.
Vehicle total sales were $620 million, down 7% from the year-ago quarter. Decline in organic sales, divestiture of the automotive fluid conveyance business and negative currency translation affected the results.
eMobility segment’s total sales were $85 million, up 13% year over year. The improvement in organic sales and positive currency translation boosted the top line of this segment.
Highlights of the Release
Selling and administrative expenses were $765 million, down 12.5% from the year-ago quarter.
The company’s fourth-quarter research and development expenses were $140 million, down 7.9% from the prior-year period. Interest expenses for the quarter were $36 million, down 14.3% from the year-ago period.
Orders in Hydraulics were up 25% year over year, while the same in Electrical Americas, Electrical Global, and Aerospace was down 1%, 6%, and 33%, respectively.
In 2020, the company returned $2.8 billion to shareholders, $1.6 billion through share repurchases and $1.2 billion through dividend.
Financial Update
Eaton’s cash was $438 million as of Dec 31, 2020 compared with $370 million in the comparable period of 2019.
As of Dec 31, 2020, the company’s long-term debt was $7,010 million, down from $7,819 million in the corresponding period of 2019.
Guidance
Eaton’s first-quarter 2021 earnings are expected in the range of $1.17-$1.27 per share. Acquisitions and divestitures are expected to negatively impact earnings by 5%, while favorable foreign currency translation is likely to boost the same by 2-3% in the first quarter.
Eaton expects organic revenue growth in the range of 4-6% in 2021. Segment operating margin for 2021 is expected in the range of 17-18%.
Earnings for 2021 are expected in the range of $5.40-$5.80 per share. It is targeting share buyback in the range of $500-$700 million in 2021. The company is aiming for 8-10% earnings growth over the next five years.
A.O. Smith Corporation (AOS - Free Report) came out with fourth-quarter 2020 quarterly earnings of 74 cents per share, which beat the Zacks Consensus Estimate of 59 cents by 25.4%.
AZZ Inc. (AZZ - Free Report) came out with third-quarter fiscal 2021 quarterly earnings of 80 cents per share, which beat the Zacks Consensus Estimate of 58 cents by 37.9%.
Emerson Electric (EMR - Free Report) came out with first-quarter fiscal 2021 quarterly earnings of 83 cents per share, which beat the Zacks Consensus Estimate of 68 cents by 22%.
Zacks 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.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Eaton's (ETN) Q4 Earnings and Revenues Surpass Estimates
Eaton Corporation (ETN - Free Report) reported fourth-quarter 2020 earnings of $1.28 per share, which surpassed the Zacks Consensus Estimate of $1.22 by 4.9%. However, earnings were down 6.6% year over year.
GAAP earnings for the reported quarter were $1.18 per share compared with $1.09 in the year-ago period. The difference between GAAP and operating earnings for the reported quarter was due to a one-time charge of 6 cents associated with acquisitions and divestitures, as well as 4 cents related to a multi-year restructuring program.
Revenues
Total quarterly revenues came in at $4,687 million, which beat the Zacks Consensus Estimate of $4,623 million by 1.4%. However, total revenues decreased 10.5% from the year-ago quarter.
For the reported quarter, organic sales were down 5% from the prior-year period. Divestiture of Lighting and Automotive Fluid Conveyance businesses resulted in an 8% decline in revenues. Nonetheless, acquired assets added 2% to fourth-quarter sales.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
Eaton Corporation, PLC price-consensus-eps-surprise-chart | Eaton Corporation, PLC Quote
Segment Details
Electrical Americas’ total fourth-quarter sales were $1,703 million, down 18.5% from the year-ago level. The decline was due to the impact of the Lighting business divestiture and fall in organic sales.
Electrical Global’s total sales were $1,252 million, down 5% from the year-ago quarter. Organic sales were down 7% from the year-ago quarter, primarily due to deterioration in oil and gas and industrial markets. Positive currency translation offset the negatives by 2%.
Hydraulics’ total sales were $485 million, up 2% from the year-ago quarter. The revenue growth was due to an improvement in organic sales.
Aerospace total sales were $542 million, down 13% from the year-ago quarter. Organic sales were down 25% year over year, partially offset by an 11% sales increase from the acquisition of Souriau-Sunbank and 1% growth from the impact of positive currency translation.
Vehicle total sales were $620 million, down 7% from the year-ago quarter. Decline in organic sales, divestiture of the automotive fluid conveyance business and negative currency translation affected the results.
eMobility segment’s total sales were $85 million, up 13% year over year. The improvement in organic sales and positive currency translation boosted the top line of this segment.
Highlights of the Release
Selling and administrative expenses were $765 million, down 12.5% from the year-ago quarter.
The company’s fourth-quarter research and development expenses were $140 million, down 7.9% from the prior-year period. Interest expenses for the quarter were $36 million, down 14.3% from the year-ago period.
Orders in Hydraulics were up 25% year over year, while the same in Electrical Americas, Electrical Global, and Aerospace was down 1%, 6%, and 33%, respectively.
In 2020, the company returned $2.8 billion to shareholders, $1.6 billion through share repurchases and $1.2 billion through dividend.
Financial Update
Eaton’s cash was $438 million as of Dec 31, 2020 compared with $370 million in the comparable period of 2019.
As of Dec 31, 2020, the company’s long-term debt was $7,010 million, down from $7,819 million in the corresponding period of 2019.
Guidance
Eaton’s first-quarter 2021 earnings are expected in the range of $1.17-$1.27 per share. Acquisitions and divestitures are expected to negatively impact earnings by 5%, while favorable foreign currency translation is likely to boost the same by 2-3% in the first quarter.
Eaton expects organic revenue growth in the range of 4-6% in 2021. Segment operating margin for 2021 is expected in the range of 17-18%.
Earnings for 2021 are expected in the range of $5.40-$5.80 per share. It is targeting share buyback in the range of $500-$700 million in 2021. The company is aiming for 8-10% earnings growth over the next five years.
Zacks Rank
Currently, Eaton has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Releases
A.O. Smith Corporation (AOS - Free Report) came out with fourth-quarter 2020 quarterly earnings of 74 cents per share, which beat the Zacks Consensus Estimate of 59 cents by 25.4%.
AZZ Inc. (AZZ - Free Report) came out with third-quarter fiscal 2021 quarterly earnings of 80 cents per share, which beat the Zacks Consensus Estimate of 58 cents by 37.9%.
Emerson Electric (EMR - Free Report) came out with first-quarter fiscal 2021 quarterly earnings of 83 cents per share, which beat the Zacks Consensus Estimate of 68 cents by 22%.
Zacks 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.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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