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Eaton (ETN) Beats Q1 Earnings and Sales Estimates, Ups View
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Eaton Corporation (ETN - Free Report) has reported first-quarter 2023 earnings of $1.88 per share, which surpassed the Zacks Consensus Estimate by 5.6%. Earnings grew 16% year over year. First-quarter earnings surpassed the guidance of $1.72-$1.82 per share.
GAAP earnings for the reported quarter were $1.59 per share compared with $1.33 in the year-ago quarter. The difference between GAAP and operating earnings for the reported quarter was due to charges of 24 cents for intangible amortization, 2 cents for a multi-year restructuring program, and 3 cents for acquisitions and divestitures.
Revenues
Total quarterly revenues were $5,483 million, which surpassed the Zacks Consensus Estimate of $5,233 million by 4.8%. Total revenues improved 13.2% from the year-ago quarter.
First-quarter revenues gained from a 15% increase in organic sales and were partially offset by 2% from negative currency translation.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
Electrical Americas’ total first-quarter sales were $2,294 million, up 21% from the year-ago quarter. The improvement was due to increased organic sales, marginally offset by negative currency translation.
Operating profits were $525 million, up 45% year over year.
Electrical Global’s total sales were $1,500 million, up 4% from the year-ago quarter. Organic sales were up 8% from the year-ago quarter, offset by a negative currency translation of 3% and 1% from a business divestiture.
Operating profits were $274 million, down 2% from the year-ago quarter.
Aerospace’s total sales were $803 million, up 12% from the year-ago quarter. Organic sales were up 13% from the year-ago quarter, offset by a negative currency translation of 1%.
Operating profits were $180 million, up 13% year over year.
Vehicle’s total sales were $739 million, up 10% from the year-ago quarter due to an 11% increase in organic sales, offset by 1% negative currency translation.
Operating profits were $107 million, down 5% year over year.
The eMobility segment’s total sales were $147 million, up 17% year over year due to an improvement in organic sales, offset marginally by a negative currency translation.
The operating loss was $4 million in first-quarter 2023, wider than the $3-million loss registered in the year-ago quarter.
Highlights of the Release
Selling and administrative expenses were $904 million, up 14.4% from the year-ago quarter.
ETN’s first-quarter research and development expenses were $179 million, up 8.5% from the prior-year period. Interest expenses for the quarter were $50 million, up 56.3% from the year-ago quarter.
Eaton’s backlog growth with orders increased by 51% in Electrical Americas, 3% in Electrical Global and 27% in Aerospace on a rolling 12-month basis.
Financial Update
As of Mar 31, 2023, the company’s cash was $235 million, down from $294 million as of Dec 31, 2022.
As of Mar 31, 2023, ETN’s long-term debt was $8,701 million, up 21.8% from $8,321 million as of Dec 31, 2022.
Guidance
Eaton’s second-quarter 2023 earnings are expected to be $2.04-$2.14 per share. The company expects organic growth of 10-12%.
Eaton is increasing its organic growth guidance from 7-9% to 9-11% and raising adjusted earnings per share to between $8.30 and $8.50 from $8.04-$8.44 for 2023. The segmental operating margin for 2022 is expected to be 20.7-21.1%.
Capital expenditure for 2023 is expected to be $700 million, up from the previously mentioned $630 million. Eaton expects to generate a free cash flow of $2.6-$3 billion in 2023 and buy back shares of $300-$600 million in 2023.
Parker Hannifin Corporation (PH - Free Report) is scheduled to report fiscal third-quarter results on May 4, before market open. The Zacks Consensus Estimate for earnings is pegged at $5.03 per share, indicating a year-over-year increase of 4.14%.
Long-term (three- to five-year) earnings growth of Parker Hannifin is pegged at 11.78%. The Zacks Consensus Estimate for fiscal 2023 earnings per share is $19.7, implying a year-over-year increase of 5.24%.
Ingersoll Rand Inc. (IR - Free Report) is scheduled to report first-quarter results on May. The Zacks Consensus Estimate for earnings is pegged at 52 cents per share, suggesting a year-over-year increase of 6.12%.
The Zacks Consensus Estimate for 2023 earnings is $2.54, implying a year-over-year increase of 7.63%.
Johnson Controls International plc (JCI - Free Report) is scheduled to report fiscal second-quarter results on May 5. The Zacks Consensus Estimate for earnings is pegged at 73 cents per share, indicating a year-over-year increase of 15.87%.
Long-term earnings growth of JCI is pegged at 13.6%. The Zacks Consensus Estimate for 2023 EPS is pegged at $3.49, implying a year-over-year increase of 16.33%.
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Eaton (ETN) Beats Q1 Earnings and Sales Estimates, Ups View
Eaton Corporation (ETN - Free Report) has reported first-quarter 2023 earnings of $1.88 per share, which surpassed the Zacks Consensus Estimate by 5.6%. Earnings grew 16% year over year. First-quarter earnings surpassed the guidance of $1.72-$1.82 per share.
GAAP earnings for the reported quarter were $1.59 per share compared with $1.33 in the year-ago quarter. The difference between GAAP and operating earnings for the reported quarter was due to charges of 24 cents for intangible amortization, 2 cents for a multi-year restructuring program, and 3 cents for acquisitions and divestitures.
Revenues
Total quarterly revenues were $5,483 million, which surpassed the Zacks Consensus Estimate of $5,233 million by 4.8%. Total revenues improved 13.2% from the year-ago quarter.
First-quarter revenues gained from a 15% increase in organic sales and were partially offset by 2% from 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 first-quarter sales were $2,294 million, up 21% from the year-ago quarter. The improvement was due to increased organic sales, marginally offset by negative currency translation.
Operating profits were $525 million, up 45% year over year.
Electrical Global’s total sales were $1,500 million, up 4% from the year-ago quarter. Organic sales were up 8% from the year-ago quarter, offset by a negative currency translation of 3% and 1% from a business divestiture.
Operating profits were $274 million, down 2% from the year-ago quarter.
Aerospace’s total sales were $803 million, up 12% from the year-ago quarter. Organic sales were up 13% from the year-ago quarter, offset by a negative currency translation of 1%.
Operating profits were $180 million, up 13% year over year.
Vehicle’s total sales were $739 million, up 10% from the year-ago quarter due to an 11% increase in organic sales, offset by 1% negative currency translation.
Operating profits were $107 million, down 5% year over year.
The eMobility segment’s total sales were $147 million, up 17% year over year due to an improvement in organic sales, offset marginally by a negative currency translation.
The operating loss was $4 million in first-quarter 2023, wider than the $3-million loss registered in the year-ago quarter.
Highlights of the Release
Selling and administrative expenses were $904 million, up 14.4% from the year-ago quarter.
ETN’s first-quarter research and development expenses were $179 million, up 8.5% from the prior-year period. Interest expenses for the quarter were $50 million, up 56.3% from the year-ago quarter.
Eaton’s backlog growth with orders increased by 51% in Electrical Americas, 3% in Electrical Global and 27% in Aerospace on a rolling 12-month basis.
Financial Update
As of Mar 31, 2023, the company’s cash was $235 million, down from $294 million as of Dec 31, 2022.
As of Mar 31, 2023, ETN’s long-term debt was $8,701 million, up 21.8% from $8,321 million as of Dec 31, 2022.
Guidance
Eaton’s second-quarter 2023 earnings are expected to be $2.04-$2.14 per share. The company expects organic growth of 10-12%.
Eaton is increasing its organic growth guidance from 7-9% to 9-11% and raising adjusted earnings per share to between $8.30 and $8.50 from $8.04-$8.44 for 2023. The segmental operating margin for 2022 is expected to be 20.7-21.1%.
Capital expenditure for 2023 is expected to be $700 million, up from the previously mentioned $630 million. Eaton expects to generate a free cash flow of $2.6-$3 billion in 2023 and buy back shares of $300-$600 million in 2023.
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.
Upcoming Releases
Parker Hannifin Corporation (PH - Free Report) is scheduled to report fiscal third-quarter results on May 4, before market open. The Zacks Consensus Estimate for earnings is pegged at $5.03 per share, indicating a year-over-year increase of 4.14%.
Long-term (three- to five-year) earnings growth of Parker Hannifin is pegged at 11.78%. The Zacks Consensus Estimate for fiscal 2023 earnings per share is $19.7, implying a year-over-year increase of 5.24%.
Ingersoll Rand Inc. (IR - Free Report) is scheduled to report first-quarter results on May. The Zacks Consensus Estimate for earnings is pegged at 52 cents per share, suggesting a year-over-year increase of 6.12%.
The Zacks Consensus Estimate for 2023 earnings is $2.54, implying a year-over-year increase of 7.63%.
Johnson Controls International plc (JCI - Free Report) is scheduled to report fiscal second-quarter results on May 5. The Zacks Consensus Estimate for earnings is pegged at 73 cents per share, indicating a year-over-year increase of 15.87%.
Long-term earnings growth of JCI is pegged at 13.6%. The Zacks Consensus Estimate for 2023 EPS is pegged at $3.49, implying a year-over-year increase of 16.33%.