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Eaton Corporation (ETN - Free Report) has reported second-quarter 2023 earnings of $2.21 per share, which surpassed the Zacks Consensus Estimate by 4.5%. Earnings grew 18.2% year over year. Second-quarter earnings surpassed the guidance of $2.04-$2.14 per share.
GAAP earnings for the reported quarter were $1.86 per share compared with $1.50 in the year-ago quarter. The difference between GAAP and operating earnings for the reported quarter was due to charges of 241 cents for intangible amortization, 6 cents for a multi-year restructuring program and 8 cents for acquisitions and divestitures.
Revenues
Total quarterly revenues were $5,866 million, which surpassed the Zacks Consensus Estimate of $5,739 million by 2.2%. Total revenues improved 12.5% from the year-ago quarter. Second-quarter revenues gained from a 13% increase in organic sales.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
Electrical Americas’ total second-quarter sales were $2,538 million, up 19.1% from the year-ago quarter. The improvement was due to increased organic sales.
Operating profits were $669 million, up 35.2% year over year.
Electrical Global’s total sales were $1,569 million, up 4.9% from the year-ago quarter. Organic sales were up 6% from the year-ago quarter, offset by a negative impact from a small divestiture. Operating profits were $290 million, up 2.8% from the year-ago quarter.
Aerospace’s total sales were $848 million, up 14.3% from the year-ago quarter, driven by organic sales. Operating profits were $191 million, up 17.2% year over year.
Vehicle’s total sales were $751 million, up 6.1% from the year-ago quarter, driven by organic sales. Operating profits were $115 million, up 6.5% year over year.
The eMobility segment’s total sales were $161 million, up 18.4% year over year, driven by organic sales. The operating loss was $1 million in second-quarter 2023, narrower than the $2 million loss registered in the year-ago quarter.
Highlights of the Release
In second-quarter, Eaton acquired a 49% stake in Jiangsu Ryan Electrical Co. Ltd., a manufacturer of power distribution and sub-transmission transformers in China. This deal further expanded ETN’s Electrical Global business.
Selling and administrative expenses were $986 million, up 19.1% from the year-ago quarter.
ETN’s second-quarter research and development expenses were $187 million, up 11.3% from the prior-year period. Interest expenses for the quarter were $42 million, up 35.5% from the year-ago quarter.
Eaton’s backlog growth, with orders, increased by 30% in Electrical Americas and 26% in Aerospace on a rolling 12-month basis.
During the quarter, in light of the ongoing war with Ukraine, Eaton decided to exit its business operations in Russia and recorded charges of $29 million.
Financial Update
As of Jun 30, 2023, the company’s cash was $353 million, up from $294 million as of Dec 31, 2022.
As of Jun 30, 2023, ETN’s long-term debt was $8,804 million, up 5.8% from $8,321 million as of Dec 31, 2022.
Guidance
Eaton’s third-quarter 2023 earnings are expected to be $2.27-$2.37 per share. The Zacks Consensus Estimate is $2.24 per share, much lower than $2.32, the midpoint of company guidance. driven by organic sales. Eaton expects its organic sales growth guidance in the band of 9-11%. Eaton raised its adjusted earnings per share in the range of $8.65-$8.85 from $8.30-$8.50 for 2023.
Parker Hannifin Corporation (PH - Free Report) is scheduled to report fiscal fourth-quarter results on Aug 3, before market open. The Zacks Consensus Estimate for earnings is pegged at $5.50 per share, indicating a year-over-year increase of 6.59%.
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 $20.91, implying year-over-year growth of 5.24%.
Ingersoll Rand Inc. (IR - Free Report) is scheduled to report second-quarter results on Aug 2. The Zacks Consensus Estimate for earnings is pegged at 59 cents per share, suggesting a year-over-year increase of 9.26%.
The Zacks Consensus Estimate for 2023 earnings is $2.7, implying year-over-year growth of 14.41%.
Johnson Controls International plc (JCI - Free Report) is scheduled to report fiscal third-quarter results on Aug 2. The Zacks Consensus Estimate for earnings is pegged at $1.03 per share, indicating a year-over-year increase of 21.18%.
Long-term earnings growth of JCI is pegged at 13.6%. The Zacks Consensus Estimate for fiscal 2023 EPS is pegged at $3.57, implying year-over-year growth of 19%.
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Eaton (ETN) Q2 Earnings & Revenues Beat, 2023 View Raised
Eaton Corporation (ETN - Free Report) has reported second-quarter 2023 earnings of $2.21 per share, which surpassed the Zacks Consensus Estimate by 4.5%. Earnings grew 18.2% year over year. Second-quarter earnings surpassed the guidance of $2.04-$2.14 per share.
GAAP earnings for the reported quarter were $1.86 per share compared with $1.50 in the year-ago quarter. The difference between GAAP and operating earnings for the reported quarter was due to charges of 241 cents for intangible amortization, 6 cents for a multi-year restructuring program and 8 cents for acquisitions and divestitures.
Revenues
Total quarterly revenues were $5,866 million, which surpassed the Zacks Consensus Estimate of $5,739 million by 2.2%. Total revenues improved 12.5% from the year-ago quarter. Second-quarter revenues gained from a 13% increase in organic sales.
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 second-quarter sales were $2,538 million, up 19.1% from the year-ago quarter. The improvement was due to increased organic sales.
Operating profits were $669 million, up 35.2% year over year.
Electrical Global’s total sales were $1,569 million, up 4.9% from the year-ago quarter. Organic sales were up 6% from the year-ago quarter, offset by a negative impact from a small divestiture. Operating profits were $290 million, up 2.8% from the year-ago quarter.
Aerospace’s total sales were $848 million, up 14.3% from the year-ago quarter, driven by organic sales. Operating profits were $191 million, up 17.2% year over year.
Vehicle’s total sales were $751 million, up 6.1% from the year-ago quarter, driven by organic sales. Operating profits were $115 million, up 6.5% year over year.
The eMobility segment’s total sales were $161 million, up 18.4% year over year, driven by organic sales. The operating loss was $1 million in second-quarter 2023, narrower than the $2 million loss registered in the year-ago quarter.
Highlights of the Release
In second-quarter, Eaton acquired a 49% stake in Jiangsu Ryan Electrical Co. Ltd., a manufacturer of power distribution and sub-transmission transformers in China. This deal further expanded ETN’s Electrical Global business.
Selling and administrative expenses were $986 million, up 19.1% from the year-ago quarter.
ETN’s second-quarter research and development expenses were $187 million, up 11.3% from the prior-year period. Interest expenses for the quarter were $42 million, up 35.5% from the year-ago quarter.
Eaton’s backlog growth, with orders, increased by 30% in Electrical Americas and 26% in Aerospace on a rolling 12-month basis.
During the quarter, in light of the ongoing war with Ukraine, Eaton decided to exit its business operations in Russia and recorded charges of $29 million.
Financial Update
As of Jun 30, 2023, the company’s cash was $353 million, up from $294 million as of Dec 31, 2022.
As of Jun 30, 2023, ETN’s long-term debt was $8,804 million, up 5.8% from $8,321 million as of Dec 31, 2022.
Guidance
Eaton’s third-quarter 2023 earnings are expected to be $2.27-$2.37 per share. The Zacks Consensus Estimate is $2.24 per share, much lower than $2.32, the midpoint of company guidance. driven by organic sales. Eaton expects its organic sales growth guidance in the band of 9-11%. Eaton raised its adjusted earnings per share in the range of $8.65-$8.85 from $8.30-$8.50 for 2023.
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
Parker Hannifin Corporation (PH - Free Report) is scheduled to report fiscal fourth-quarter results on Aug 3, before market open. The Zacks Consensus Estimate for earnings is pegged at $5.50 per share, indicating a year-over-year increase of 6.59%.
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 $20.91, implying year-over-year growth of 5.24%.
Ingersoll Rand Inc. (IR - Free Report) is scheduled to report second-quarter results on Aug 2. The Zacks Consensus Estimate for earnings is pegged at 59 cents per share, suggesting a year-over-year increase of 9.26%.
The Zacks Consensus Estimate for 2023 earnings is $2.7, implying year-over-year growth of 14.41%.
Johnson Controls International plc (JCI - Free Report) is scheduled to report fiscal third-quarter results on Aug 2. The Zacks Consensus Estimate for earnings is pegged at $1.03 per share, indicating a year-over-year increase of 21.18%.
Long-term earnings growth of JCI is pegged at 13.6%. The Zacks Consensus Estimate for fiscal 2023 EPS is pegged at $3.57, implying year-over-year growth of 19%.