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Eaton (ETN) Q3 Earnings Surpass Estimates, Revenues Up Y/Y
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Eaton Corporation (ETN - Free Report) has reported third-quarter 2022 earnings of $2.02 per share, which surpassed the Zacks Consensus Estimate by a penny. Earnings were up 15% year over year. The third-quarter earnings were near the higher end of the company’s guidance of $1.95-$2.05.
GAAP earnings for the reported quarter were $1.52 per share compared with $1.58 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, 4 cents related to a multi-year restructuring program, and 21 cents pertaining to acquisitions and divestitures.
Revenues
Total quarterly revenues were $5,313 million, marginally lagging the Zacks Consensus Estimate of $5,324 million by 0.2%. Total revenues improved 7.9% from the year-ago quarter.
Revenues gained from a 15% increase in organic sales and acquisitions added 1%. These positives were offset by a 4% decline from divestitures and a 4% decrease from a negative currency translation.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
Electrical Americas’ total third-quarter sales were $2,179 million, up 18% from the year-ago level. The improvement was due to increased organic sales. Operating profits were $511 million, up 27% year over year.
Electrical Global’s total sales were $1,486 million, up 5% from the year-ago quarter. Organic sales were up 13% from the year-ago quarter, offset by a negative currency translation of 8%. Operating profits were $305 million, up 7% year over year.
Aerospace’s total sales were $768 million, up 3% from the year-ago quarter. This was due to improved organic sales and contributions from the acquisition of Mission Systems, marginally offset by a negative currency translation. Operating profits were $185 million, up 13% year over year.
Vehicle’s total sales were $744 million, up 16% from the year-ago quarter due to an increase in organic sales, partially offset by negative currency translation. Operating profits were $125 million, up 9% year over year.
The eMobility segment’s total sales were $137 million, up 63% year over year due to an improvement in organic sales and the acquisition of Royal Power Solutions, offset marginally by a negative currency translation. The operating loss was $2 million in third-quarter 2022, narrower than the $8 million loss registered in the year-ago quarter.
Highlights of the Release
Selling and administrative expenses were $813 million, down 2.5% from the year-ago quarter.
ETN’s third-quarter research and development expenses were $165 million, up 8.6% from the prior-year period. Interest expenses for the quarter were $37 million, on par with the year-ago period.
Eaton’s Electrical sector backlog was up 75% and rolling 12-month orders increased 27%, while Aerospace backlog was up 17%, with rolling 12-month orders rising 22%, all on an organic basis.
Financial Update
Eaton’s cash was $231 million as of Sep 30, 2022, compared with $297 million as of Dec 31, 2021.
As of Sep 30, 2022, the company’s long-term debt was $8,082 million, down from $6,831 million as of Dec 31, 2021.
Guidance
Eaton’s fourth-quarter 2022 earnings are expected to be $2-$2.10 per share. ETN expects organic revenue growth of 13-15% for the fourth quarter. Segment operating margin is expected to be 20.5%-20.9%.
Eaton expects its 2022 earnings per share in the range of $7.51-$7.61 per share. ETN expects organic revenue growth of 11-13% for 2022. The segmental operating margin for 2022 is expected to be 20-20.4%.
Eaton is targeting a share buyback of $200-$300 million for 2022.
A.O. Smith Corporation (AOS - Free Report) third-quarter 2022 earnings of 69 cents per share are on par with the Zacks Consensus Estimate.
A.O. Smith’s long-term (three to five-year) earnings growth is pegged at 9%. The Zacks Consensus Estimate for AOS’ 2022 earnings per share indicates 4.4% year-over-year growth.
AZZ Inc. (AZZ - Free Report) reported second-quarter fiscal 2023 earnings of $1.24 per share, which lagged the Zacks Consensus Estimate of $1.82 by 31.9%.
AZZ reported an average earnings surprise of 8.6% in the last four quarters. The Zacks Consensus Estimate for AZZ’s fiscal 2023 earnings per share indicates 65.3% year-over-year growth.
Regal Rexnord Corporation (RRX - Free Report) came up with third-quarter 2022 earnings of $2.66 per share, on par with the Zacks Consensus Estimate.
Regal Rexnord’s long-term earnings growth is pegged at 10%. The Zacks Consensus Estimate for RRX’s 2022 earnings per share indicates 13.1% year-over-year growth.
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Eaton (ETN) Q3 Earnings Surpass Estimates, Revenues Up Y/Y
Eaton Corporation (ETN - Free Report) has reported third-quarter 2022 earnings of $2.02 per share, which surpassed the Zacks Consensus Estimate by a penny. Earnings were up 15% year over year. The third-quarter earnings were near the higher end of the company’s guidance of $1.95-$2.05.
GAAP earnings for the reported quarter were $1.52 per share compared with $1.58 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, 4 cents related to a multi-year restructuring program, and 21 cents pertaining to acquisitions and divestitures.
Revenues
Total quarterly revenues were $5,313 million, marginally lagging the Zacks Consensus Estimate of $5,324 million by 0.2%. Total revenues improved 7.9% from the year-ago quarter.
Revenues gained from a 15% increase in organic sales and acquisitions added 1%. These positives were offset by a 4% decline from divestitures and a 4% decrease from a negative currency translation.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
Eaton Corporation, PLC price-consensus-eps-surprise-chart | Eaton Corporation, PLC Quote
Segmental Details
Electrical Americas’ total third-quarter sales were $2,179 million, up 18% from the year-ago level. The improvement was due to increased organic sales. Operating profits were $511 million, up 27% year over year.
Electrical Global’s total sales were $1,486 million, up 5% from the year-ago quarter. Organic sales were up 13% from the year-ago quarter, offset by a negative currency translation of 8%. Operating profits were $305 million, up 7% year over year.
Aerospace’s total sales were $768 million, up 3% from the year-ago quarter. This was due to improved organic sales and contributions from the acquisition of Mission Systems, marginally offset by a negative currency translation. Operating profits were $185 million, up 13% year over year.
Vehicle’s total sales were $744 million, up 16% from the year-ago quarter due to an increase in organic sales, partially offset by negative currency translation. Operating profits were $125 million, up 9% year over year.
The eMobility segment’s total sales were $137 million, up 63% year over year due to an improvement in organic sales and the acquisition of Royal Power Solutions, offset marginally by a negative currency translation. The operating loss was $2 million in third-quarter 2022, narrower than the $8 million loss registered in the year-ago quarter.
Highlights of the Release
Selling and administrative expenses were $813 million, down 2.5% from the year-ago quarter.
ETN’s third-quarter research and development expenses were $165 million, up 8.6% from the prior-year period. Interest expenses for the quarter were $37 million, on par with the year-ago period.
Eaton’s Electrical sector backlog was up 75% and rolling 12-month orders increased 27%, while Aerospace backlog was up 17%, with rolling 12-month orders rising 22%, all on an organic basis.
Financial Update
Eaton’s cash was $231 million as of Sep 30, 2022, compared with $297 million as of Dec 31, 2021.
As of Sep 30, 2022, the company’s long-term debt was $8,082 million, down from $6,831 million as of Dec 31, 2021.
Guidance
Eaton’s fourth-quarter 2022 earnings are expected to be $2-$2.10 per share. ETN expects organic revenue growth of 13-15% for the fourth quarter. Segment operating margin is expected to be 20.5%-20.9%.
Eaton expects its 2022 earnings per share in the range of $7.51-$7.61 per share. ETN expects organic revenue growth of 11-13% for 2022. The segmental operating margin for 2022 is expected to be 20-20.4%.
Eaton is targeting a share buyback of $200-$300 million for 2022.
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) third-quarter 2022 earnings of 69 cents per share are on par with the Zacks Consensus Estimate.
A.O. Smith’s long-term (three to five-year) earnings growth is pegged at 9%. The Zacks Consensus Estimate for AOS’ 2022 earnings per share indicates 4.4% year-over-year growth.
AZZ Inc. (AZZ - Free Report) reported second-quarter fiscal 2023 earnings of $1.24 per share, which lagged the Zacks Consensus Estimate of $1.82 by 31.9%.
AZZ reported an average earnings surprise of 8.6% in the last four quarters. The Zacks Consensus Estimate for AZZ’s fiscal 2023 earnings per share indicates 65.3% year-over-year growth.
Regal Rexnord Corporation (RRX - Free Report) came up with third-quarter 2022 earnings of $2.66 per share, on par with the Zacks Consensus Estimate.
Regal Rexnord’s long-term earnings growth is pegged at 10%. The Zacks Consensus Estimate for RRX’s 2022 earnings per share indicates 13.1% year-over-year growth.