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Eaton (ETN) Q1 Earnings & Sales Beat Estimates, 2022 View Up

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Eaton Corporation (ETN - Free Report) reported first-quarter 2022 earnings of $1.62 per share, which surpassed the Zacks Consensus Estimate of $1.6 by 1.3%. Furthermore, earnings were up 12.5% year over year. First-quarter earnings were near the higher end of the guided range of $1.55-$1.65 per share.

GAAP earnings for the reported quarter were $1.33 per share compared with $1.14 in the year-ago period. The difference between GAAP and operating earnings for the reported quarter was due to charges of 25 cents associated with intangible amortization, 3 cents related to a multi-year restructuring program, and a cent pertaining to acquisitions and divestitures.

Revenues

Total quarterly revenues came in at $4,843 million, which surpassed the Zacks Consensus Estimate of $4,813 million by 0.6%. Total revenues improved 3.2% from the year-ago quarter.

The year-over-year improvement was due to 10% growth in organic sales and 6% growth from acquisitions, offset by a 1% negative currency translation and a 12% decline stemming from the Hydraulics business divestiture.

 

Eaton Corporation, PLC Price, Consensus and EPS Surprise

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 first-quarter sales were $1,891 million, up 16.6% from the year-ago level. This improvement was due to improved organic sales and contribution from the acquisition of Tripp Lite. Operating profits were $361 million, up 8.7% year over year.

Electrical Global’s total sales were $1,437 million, up 14.7% from the year-ago quarter. Organic sales were up 18% from the year-ago quarter, offset by a negative currency translation of 3%. Operating profits were $279 million, up 31% year over year.

Aerospace’s total sales were $718 million, up 38.4% from the year-ago quarter. This was due to improved organic sales and contribution from the acquisition of Mission Systems, marginally offset by negative currency translation. Operating profits were $159 million, up 65.6% year over year.

Vehicle total sales were $671 million, up 2.6% from the year-ago quarter due an increase in organic sales. Operating profits were $113 million, on par with the year-ago quarter.

eMobility segment’s total sales were $126 million, up 51.8% year over year due to an improvement in organic sales and acquisition of Royal Power Solutions.

Highlights of the Release

Selling and administrative expenses were $790 million, down 0.6% from the year-ago quarter.

ETN’s first-quarter research and development expenses were $165 million, up 11.5% from the prior-year period. Interest expenses for the quarter were $32 million, down 15.8% from the year-ago period.

Eaton’s Electrical segment backlog was up 76% and rolling 12-month orders up 30%, while Aerospace backlog was up 14% with rolling 12-month orders up 35%, all on an organic basis.

Financial Update

Eaton’s cash was $237 million as of Mar 31, 2022 compared with $297 million on Dec 31, 2021.

As of Mar 31, 2022, the company’s long-term debt was $6,763 million, down from $6,831 million on Dec 31, 2021.

Guidance

Eaton’s second-quarter 2022 earnings are expected in the range of $1.78-$1.88 per share. ETN now expects organic revenue growth in the range of 9-11% for the second quarter.

Eaton revised 2022 earnings per share in the range of $7.32-$7.72 from the previous guidance in the range of $7.30-$7.70. ETN now expects organic revenue growth in the range of 9-11% for 2022. Segment operating margin for 2022 is now expected in the range of 19.9-20.3%.

Eaton is targeting share buyback in the range of $200-$300 million in 2022.

Zacks Rank

Currently, Eaton has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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