We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Eaton (ETN) Q2 Earnings Beat Estimates, 2018 Guidance Up
Read MoreHide Full Article
Eaton Corporation’s (ETN - Free Report) earnings per share of $1.39 in second-quarter 2018 topped the Zacks Consensus Estimate of $1.32 by 5.3%. The reported earnings exceeded the high end of management’s guided range of $1.25-$1.35. Also, earnings were 20.9% higher than the year-ago figure.
Revenues
In the quarter, Eaton’s total revenues came in at $5,487 million, surpassing the Zacks Consensus Estimate of $5,466 million by 0.4%. The figure was also 6.9% higher than the year-ago quarter.
The year-over-year sales increase includes 7% growth in organic sales and 1% rise in positive currency translations, which were partially offset by a negative 1% impact of the divestiture of its share in a small electrical JV in 2017 and the formation of the Eaton Cummins JV.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
In the second quarter, Electrical Products’ total sales were $1,806 million, up 4.3% from the year-ago quarter. Organic sales were up 3% and currency translation was a positive 1%. The quarter’s operating income was $334 million, up 11.7% year over year.
Electrical Systems and Services’ total sales were $1,513 million, up 7.0% from the year-ago quarter. Organic sales were up 7% and currency translation was a positive 1%. Operating income in the quarter was $227 million, up 17.0% year over year.
Hydraulics total sales were $723 million, up 14.2% from the year-ago quarter. Organic sales were up 13% and currency translation was a positive 1%. The quarter’s operating income was $101 million, up 36.5% year over year.
Aerospace total sales were $463 million, up 5.9% from the year-ago quarter. Organic sales were up 6%. Operating income in the quarter was $90 million, up 11.1% year over year.
Vehicle total sales were $899 million, up 6.4% from the year-ago quarter. Organic sales were up 11%, partially offset by a negative 5% impact as a result of the formation of the Eaton Cummins joint venture in 2017. The quarter’s operating income was $166 million, up 17.7% year over year.
eMobility segment’s total sales were $83 million, up 15.2% from the year-ago quarter. Organic sales were up 14% and currency translation was a positive 1%. Operating income in the quarter was $14 million, up 7.7% year over year.
Quarterly Highlights
Cost of products sold in the reported quarter was $3,671 million, up 6.5% from the prior-year quarter.
Selling and administrative expenses were $901 million, up 1.2% from the year-ago quarter.
In the second quarter, the company’s research and development expenses were $145 million, down 3.3% from $150 million in the prior-year quarter.
Interest expenses of $68 million were up 13.3% from the prior-year quarter.
Order in Electrical Products, Electrical Systems and Services and Aerospace was up 4%, 15% and 18% year over year, respectively.
In the first six months of 2018, the company repurchased shares worth $600 million.
Financial Update
Eaton’s cash and short-term investments were $256 million as of Jun 30, 2018 compared with $561 million on Dec 31, 2017.
As of Jun 30, 2018, long-term debt was $6,753 million, down from $7,167 million on Dec 31, 2017.
Guidance
Third-quarter 2018 earnings per share are expected between $1.35 and $1.45.
The company raised its 2018 earnings expectation by 10 cents at both ends and is now expected in the range of $5.20-$5.40 per share for the year.
Eaton’s earnings and total revenues in the second quarter were better than expectations, courtesy of strong performance by every segment. Better-than-expected organic sales and positive currency translation boosted the performance of the company.
We believe improvement in end-market conditions is resulting in better-than-expected organic sales volumes, leading to overall strong performance of the company. The lower number of outstanding shares due to repurchase of $600 million in the first half of 2018 also positively impacted its earnings.
Upcoming Releases
SPX FLOW Inc. (FLOW - Free Report) is slated to report second-quarter 2018 earnings on Aug 1. The Zacks Consensus Estimate is pegged at 45 cents.
CUI Global Inc. is slated to announce second-quarter 2018 earnings on Aug 8. The Zacks Consensus Estimate is pegged at a loss of 5 cents.
Capstone Turbine Corporation is scheduled to report fiscal first-quarter 2019 earnings on Aug 27, 2018. The Zacks Consensus Estimate is pegged at loss of 3 cents.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Eaton (ETN) Q2 Earnings Beat Estimates, 2018 Guidance Up
Eaton Corporation’s (ETN - Free Report) earnings per share of $1.39 in second-quarter 2018 topped the Zacks Consensus Estimate of $1.32 by 5.3%. The reported earnings exceeded the high end of management’s guided range of $1.25-$1.35. Also, earnings were 20.9% higher than the year-ago figure.
Revenues
In the quarter, Eaton’s total revenues came in at $5,487 million, surpassing the Zacks Consensus Estimate of $5,466 million by 0.4%. The figure was also 6.9% higher than the year-ago quarter.
The year-over-year sales increase includes 7% growth in organic sales and 1% rise in positive currency translations, which were partially offset by a negative 1% impact of the divestiture of its share in a small electrical JV in 2017 and the formation of the Eaton Cummins JV.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
Eaton Corporation, PLC Price, Consensus and EPS Surprise | Eaton Corporation, PLC Quote
Segment Details
In the second quarter, Electrical Products’ total sales were $1,806 million, up 4.3% from the year-ago quarter. Organic sales were up 3% and currency translation was a positive 1%. The quarter’s operating income was $334 million, up 11.7% year over year.
Electrical Systems and Services’ total sales were $1,513 million, up 7.0% from the year-ago quarter. Organic sales were up 7% and currency translation was a positive 1%. Operating income in the quarter was $227 million, up 17.0% year over year.
Hydraulics total sales were $723 million, up 14.2% from the year-ago quarter. Organic sales were up 13% and currency translation was a positive 1%. The quarter’s operating income was $101 million, up 36.5% year over year.
Aerospace total sales were $463 million, up 5.9% from the year-ago quarter. Organic sales were up 6%. Operating income in the quarter was $90 million, up 11.1% year over year.
Vehicle total sales were $899 million, up 6.4% from the year-ago quarter. Organic sales were up 11%, partially offset by a negative 5% impact as a result of the formation of the Eaton Cummins joint venture in 2017. The quarter’s operating income was $166 million, up 17.7% year over year.
eMobility segment’s total sales were $83 million, up 15.2% from the year-ago quarter. Organic sales were up 14% and currency translation was a positive 1%. Operating income in the quarter was $14 million, up 7.7% year over year.
Quarterly Highlights
Cost of products sold in the reported quarter was $3,671 million, up 6.5% from the prior-year quarter.
Selling and administrative expenses were $901 million, up 1.2% from the year-ago quarter.
In the second quarter, the company’s research and development expenses were $145 million, down 3.3% from $150 million in the prior-year quarter.
Interest expenses of $68 million were up 13.3% from the prior-year quarter.
Order in Electrical Products, Electrical Systems and Services and Aerospace was up 4%, 15% and 18% year over year, respectively.
In the first six months of 2018, the company repurchased shares worth $600 million.
Financial Update
Eaton’s cash and short-term investments were $256 million as of Jun 30, 2018 compared with $561 million on Dec 31, 2017.
As of Jun 30, 2018, long-term debt was $6,753 million, down from $7,167 million on Dec 31, 2017.
Guidance
Third-quarter 2018 earnings per share are expected between $1.35 and $1.45.
The company raised its 2018 earnings expectation by 10 cents at both ends and is now expected in the range of $5.20-$5.40 per share for the year.
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.
Our View
Eaton’s earnings and total revenues in the second quarter were better than expectations, courtesy of strong performance by every segment. Better-than-expected organic sales and positive currency translation boosted the performance of the company.
We believe improvement in end-market conditions is resulting in better-than-expected organic sales volumes, leading to overall strong performance of the company. The lower number of outstanding shares due to repurchase of $600 million in the first half of 2018 also positively impacted its earnings.
Upcoming Releases
SPX FLOW Inc. (FLOW - Free Report) is slated to report second-quarter 2018 earnings on Aug 1. The Zacks Consensus Estimate is pegged at 45 cents.
CUI Global Inc. is slated to announce second-quarter 2018 earnings on Aug 8. The Zacks Consensus Estimate is pegged at a loss of 5 cents.
Capstone Turbine Corporation is scheduled to report fiscal first-quarter 2019 earnings on Aug 27, 2018. The Zacks Consensus Estimate is pegged at loss of 3 cents.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>