- Record second quarter earnings per share of $2.48, up 33%
over 2023, and record quarterly adjusted earnings per share of
$2.73, up 24% over 2023
- Record segment margins of 23.7%, 210 basis points above the
second quarter of 2023
- 9% organic sales growth, above the high end of guidance, and
strong backlog growth of 27% in Electrical and 14% in
Aerospace
- Raised full year 2024 organic sales, segment margin,
earnings per share, adjusted earnings per share and cash flow
guidance
Intelligent power management company Eaton Corporation plc
(NYSE:ETN) today announced that earnings per share were $2.48 for
the second quarter of 2024, a second quarter record and up 33% over
the second quarter of 2023. Excluding charges of $0.20 per share
related to intangible amortization, $0.03 per share related to a
multi-year restructuring program, and $0.02 per share related to
acquisitions and divestitures, adjusted earnings per share of $2.73
were a record and up 24% over the second quarter of 2023.
Sales in the quarter were $6.4 billion, a record and up 8% from
the second quarter of 2023. Organic sales were up 9%, which was
partially offset by 1% from negative currency translation.
Segment margins were 23.7%, a quarterly record and a 210-basis
point improvement over the second quarter of 2023.
Operating cash flow was $946 million and free cash flow was $759
million, both second quarter records and up 11% and 10%,
respectively, over the same period in 2023.
Craig Arnold, Eaton chairman and chief executive officer, said,
“We continue to see strong demand across our markets – due to
electrification, energy transition and reindustrialization –
resulting in record earnings and continued backlog growth. We’re
making capacity investments in key product lines to support
structurally higher growth, and we remain confident in our outlook.
As a result, we are increasing our guidance for the year.”
Guidance
For the full year 2024, the company is raising the following
guidance:
- Organic growth from 7-9% to 8-9%
- Segment margins from 22.8-23.2% to 23.3-23.7%
- Earnings per share to between $9.38 and $9.48, up 18% at the
midpoint over the prior year
- Adjusted earnings per share to between $10.65 and $10.75, up
17% at the midpoint over the prior year
- Operating cash flow raised $100 million and narrowed to between
$4.2 billion to $4.4 billion, and free cash flow raised $100
million and narrowed to between $3.4 billion to $3.6 billion.
For the third quarter of 2024, the company anticipates:
- Organic growth of 8-9%
- Segment margins of 23.5-23.9%
- Earnings per share between $2.42 and $2.52
- Adjusted earnings per share between $2.73 and $2.83.
Business Segment Results
Sales for the Electrical Americas segment were a record $2.9
billion, up 13% from the second quarter of 2023, driven entirely by
organic sales growth. Operating profits were a record $859 million,
up 28% over the second quarter of 2023. Operating margins in the
quarter were a record 29.9%, up 350 basis points over the second
quarter of 2023.
The twelve-month rolling average of orders in the second quarter
was up 11% organically. Backlog at the end of June remained at
record levels, up 29% organically over June 2023.
Sales for the Electrical Global segment were a record $1.6
billion, up 2% from the second quarter of 2023. Organic sales were
up 3.5%, which was partially offset by 1.5% from negative currency
translation. Operating profits were $305 million, a second quarter
record and up 5% over the second quarter of 2023. Operating margins
in the quarter were 19.0%, a second quarter record and up 50 basis
points over the second quarter of 2023.
The twelve-month rolling average of orders in the second quarter
was up 7% organically. Backlog at the end of June was up 16%
organically over June 2023.
On a rolling twelve-month basis, the book-to-bill ratio for the
Electrical businesses remained strong at 1.1.
Aerospace segment sales were a record $955 million, up 13% from
the second quarter of 2023, driven entirely by organic sales
growth. Operating profits were $206 million and operating margins
in the quarter were 21.5%.
The twelve-month rolling average of orders in the second quarter
was up 4% organically. The backlog at the end of June was up 14%
over June 2023. On a rolling twelve-month basis, the book-to-bill
ratio for the Aerospace segment remained strong at 1.1.
The Vehicle segment posted sales of $723 million, down 4% from
the second quarter of 2023, driven by organic sales decline of 3%
and negative currency translation of 1%. Operating profits were
$130 million, up 13% over the second quarter of 2023. Operating
margins in the quarter were 18.0%, up 270 basis points over the
second quarter of 2023.
eMobility segment sales were a record $189 million, up 18% over
the second quarter of 2023, driven entirely by organic sales
growth. The segment recorded an operating profit of $2 million and
operating margins in the quarter were 1.3%.
Eaton is an intelligent power management company dedicated to
protecting the environment and improving the quality of life for
people everywhere. We make products for the data center, utility,
industrial, commercial, machine building, residential, aerospace
and mobility markets. We are guided by our commitment to do
business right, to operate sustainably and to help our customers
manage power ─ today and well into the future. By capitalizing on
the global growth trends of electrification and digitalization,
we’re accelerating the planet’s transition to renewable energy
sources, helping to solve the world’s most urgent power management
challenges, and building a more sustainable society for people
today and generations to come.
Eaton was founded in 1911 and has been listed on the New York
Stock Exchange for more than a century. We reported revenues of
$23.2 billion in 2023 and serve customers in more than 160
countries. For more information, visit www.eaton.com. Follow us on
LinkedIn.
Notice of conference call: Eaton’s conference call to discuss
its second quarter results is available to all interested parties
today as a live audio webcast at 11 a.m. United States Eastern time
via a link on Eaton’s home page. This news release can be accessed
under its headline on the home page. Also available on the website
before the call will be a presentation on second quarter results,
which will be covered during the call.
This news release contains forward-looking statements concerning
third quarter and full year 2024 earnings per share, adjusted
earnings per share, segment margins, organic sales growth and cash
flow, as well as anticipated multi-year restructuring program
charges and savings. These statements should be used with caution
and are subject to various risks and uncertainties, many of which
are outside the company’s control. The following factors could
cause actual results to differ materially from those in the
forward-looking statements: a global pandemic such as COVID-19;
geopolitical tensions or war, unanticipated changes in the markets
for the company’s business segments; unanticipated downturns in
business relationships with customers or their purchases from us;
competitive pressures on sales and pricing; supply chain
disruptions, unanticipated changes in the cost of material, labor,
and other production costs, or unexpected costs that cannot be
recouped in product pricing; the introduction of competing
technologies; unexpected technical or marketing difficulties;
unexpected claims, charges, litigation or dispute resolutions;
strikes or other labor unrest at Eaton or at our customers or
suppliers; natural disasters; the performance of recent
acquisitions; unanticipated difficulties completing or integrating
acquisitions; new laws and governmental regulations; interest rate
changes; changes in tax laws or tax regulations; stock market and
currency fluctuations; and unanticipated deterioration of economic
and financial conditions in the United States and around the world.
We do not assume any obligation to update these forward-looking
statements.
Financial Results
The company’s comparative financial results for the three months
ended June 30, 2024, are available on the company’s website,
www.eaton.com.
EATON CORPORATION plc
CONSOLIDATED STATEMENTS OF
INCOME
Three months ended June 30
Six months ended June 30
(In millions except for per share
data)
2024
2023
2024
2023
Net sales
$
6,350
$
5,866
$
12,293
$
11,349
Cost of products sold
3,940
3,747
7,665
7,346
Selling and administrative expense
1,021
986
2,046
1,890
Research and development expense
196
187
385
366
Interest expense - net
29
42
59
91
Other expense (income) - net
(32
)
7
(58
)
(4
)
Income before income taxes
1,195
898
2,195
1,660
Income tax expense
201
153
379
276
Net income
994
745
1,816
1,384
Less net income for noncontrolling
interests
(1
)
(1
)
(2
)
(3
)
Net income attributable to Eaton
ordinary shareholders
$
993
$
744
$
1,814
$
1,382
Net income per share attributable to
Eaton ordinary shareholders
Diluted
$
2.48
$
1.86
$
4.52
$
3.45
Basic
2.49
1.86
4.54
3.47
Weighted-average number of ordinary
shares outstanding
Diluted
401.0
400.7
401.5
400.6
Basic
399.2
398.9
399.6
398.7
Reconciliation of net income
attributable to Eaton ordinary shareholders to adjusted
earnings
Net income attributable to Eaton ordinary
shareholders
$
993
$
744
$
1,814
$
1,382
Excluding acquisition and divestiture
charges, after-tax
8
30
20
41
Excluding restructuring program charges,
after-tax
12
24
61
31
Excluding intangible asset amortization
expense, after-tax
83
88
167
186
Adjusted earnings
$
1,096
$
886
$
2,062
$
1,639
Net income per share attributable to Eaton
ordinary shareholders - diluted
$
2.48
$
1.86
$
4.52
$
3.45
Excluding per share impact of acquisition
and divestiture charges, after-tax
0.02
0.08
0.05
0.10
Excluding per share impact of
restructuring program charges, after-tax
0.03
0.06
0.15
0.08
Excluding per share impact of intangible
asset amortization expense, after-tax
0.20
0.21
0.42
0.46
Adjusted earnings per ordinary
share
$
2.73
$
2.21
$
5.14
$
4.09
See accompanying notes.
EATON CORPORATION plc
BUSINESS SEGMENT INFORMATION
Three months ended June 30
Six months ended June 30
(In millions)
2024
2023
2024
2023
Net sales
Electrical Americas
$
2,877
$
2,538
$
5,567
$
4,832
Electrical Global
1,606
1,569
3,105
3,069
Aerospace
955
848
1,826
1,650
Vehicle
723
751
1,447
1,490
eMobility
189
161
348
308
Total net sales
$
6,350
$
5,866
$
12,293
$
11,349
Segment operating profit (loss)
Electrical Americas
$
859
$
669
$
1,644
$
1,194
Electrical Global
305
290
578
564
Aerospace
206
191
407
371
Vehicle
130
115
246
222
eMobility
2
(1
)
(2
)
(5
)
Total segment operating profit
1,502
1,264
2,873
2,346
Corporate
Intangible asset amortization expense
(106
)
(113
)
(212
)
(237
)
Interest expense - net
(29
)
(42
)
(59
)
(91
)
Pension and other postretirement benefits
income
9
11
20
22
Restructuring program charges
(15
)
(29
)
(78
)
(39
)
Other expense - net
(166
)
(192
)
(349
)
(340
)
Income before income taxes
1,195
898
2,195
1,660
Income tax expense
201
153
379
276
Net income
994
745
1,816
1,384
Less net income for noncontrolling
interests
(1
)
(1
)
(2
)
(3
)
Net income attributable to Eaton
ordinary shareholders
$
993
$
744
$
1,814
$
1,382
See accompanying notes.
EATON CORPORATION plc
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions)
June 30, 2024
December 31, 2023
Assets
Current assets
Cash
$
540
$
488
Short-term investments
2,241
2,121
Accounts receivable - net
4,861
4,475
Inventory
3,963
3,739
Prepaid expenses and other current
assets
1,046
851
Total current assets
12,652
11,675
Property, plant and equipment - net
3,604
3,530
Other noncurrent assets
Goodwill
14,849
14,977
Other intangible assets
4,883
5,091
Operating lease assets
785
648
Deferred income taxes
499
458
Other assets
2,110
2,052
Total assets
$
39,381
$
38,432
Liabilities and shareholders’
equity
Current liabilities
Short-term debt
$
4
$
8
Current portion of long-term debt
1,278
1,017
Accounts payable
3,497
3,365
Accrued compensation
529
676
Other current liabilities
2,812
2,680
Total current liabilities
8,120
7,747
Noncurrent liabilities
Long-term debt
8,555
8,244
Pension liabilities
709
768
Other postretirement benefits
liabilities
175
180
Operating lease liabilities
656
533
Deferred income taxes
429
402
Other noncurrent liabilities
1,484
1,489
Total noncurrent liabilities
12,008
11,616
Shareholders’ equity
Eaton shareholders’ equity
19,219
19,036
Noncontrolling interests
35
33
Total equity
19,254
19,069
Total liabilities and equity
$
39,381
$
38,432
See accompanying notes.
EATON CORPORATION plc NOTES TO THE SECOND QUARTER 2024
EARNINGS RELEASE
Amounts are in millions of dollars unless indicated otherwise
(per share data assume dilution). Columns and rows may not add and
the sum of components may not equal total amounts reported due to
rounding.
Note 1. NON-GAAP FINANCIAL INFORMATION
This earnings release includes certain non-GAAP financial
measures. These financial measures include adjusted earnings,
adjusted earnings per ordinary share, and free cash flow, each of
which differs from the most directly comparable measure calculated
in accordance with generally accepted accounting principles (GAAP).
A reconciliation of each of these financial measures to the most
directly comparable GAAP measure is included in this earnings
release. Management believes that these financial measures are
useful to investors because they provide additional meaningful
financial information that should be considered when assessing our
business performance and trends, and they allow investors to more
easily compare Eaton Corporation plc's (Eaton or the Company)
financial performance period to period. Management uses this
information in monitoring and evaluating the on-going performance
of Eaton and each business segment.
The Company's third quarter and full year net income per
ordinary share and adjusted earnings per ordinary share guidance
for 2024 is as follows:
Three months ended
September 30, 2024
Year ended
December 31, 2024
Net income per share attributable to Eaton
ordinary shareholders - diluted
$2.42 - $2.52
$9.38 - $9.48
Excluding per share impact of acquisition
and divestiture charges, after tax
0.03
0.10
Excluding per share impact of
restructuring program charges, after tax
0.07
0.33
Excluding per share impact of intangible
asset amortization expense, after tax
0.21
0.84
Adjusted earnings per ordinary share
$2.73 - $2.83
$10.65 - $10.75
A reconciliation of net income attributable to Eaton ordinary
shareholders per share to adjusted earnings per ordinary share is
as follows:
Year ended
December 31, 2023
Net income per share attributable to Eaton
ordinary shareholders - diluted
$
8.02
Excluding per share impact of acquisition
and divestiture charges, after tax
0.10
Excluding per share impact of
restructuring program charges, after tax
0.11
Excluding per share impact of intangible
asset amortization expense, after tax
0.89
Adjusted earnings per ordinary share
$
9.12
A reconciliation of operating cash flow to free cash flow is as
follows:
Three months ended June 30
(In millions)
2024
2023
Operating cash flow
$
946
$
851
Capital expenditures for property, plant
and equipment
(187
)
(160
)
Free cash flow
$
759
$
691
The Company's full year operating cash flow and free cash flow
guidance for 2024 is as follows:
Year ended
December 31, 2024
(In billions)
Low
High
Operating cash flow
$
4.2
$
4.4
Capital expenditures for property, plant
and equipment
(0.8
)
(0.8
)
Free cash flow
$
3.4
$
3.6
Note 2. ACQUISITIONS OF BUSINESSES
Acquisition of a 49% stake in Jiangsu Ryan Electrical Co.
Ltd.
On April 23, 2023, Eaton acquired a 49 percent stake in Jiangsu
Ryan Electrical Co. Ltd., a manufacturer of power distribution and
sub-transmission transformers in China. Eaton accounts for this
investment on the equity method of accounting and it is reported
within the Electrical Global business segment.
Acquisition of Exertherm
On May 20, 2024, Eaton acquired Exertherm, a U.K.-based provider
of thermal monitoring solutions for electrical equipment. Exertherm
is reported within the Electrical Americas business segment.
Acquisition of a 49% stake in NordicEPOD AS
On May 31, 2024, Eaton acquired a 49 percent stake in NordicEPOD
AS, which designs and assembles standardized power modules for data
centers in the Nordic region. Eaton accounts for this investment on
the equity method of accounting and it is reported within the
Electrical Global business segment.
Note 3. ACQUISITION AND DIVESTITURE CHARGES
Eaton incurs integration charges and transaction costs to
acquire and integrate businesses, and transaction, separation and
other costs to divest and exit businesses. Eaton also recognizes
gains and losses on the sale of businesses. A summary of these
Corporate items is as follows:
Three months ended June 30
Six months ended June 30
(In millions except for per share
data)
2024
2023
2024
2023
Acquisition integration, divestiture
charges and transaction costs
$
10
$
38
$
27
$
51
Income tax benefit
3
7
7
10
Total after income taxes
$
8
$
30
$
20
$
41
Per ordinary share - diluted
$
0.02
$
0.08
$
0.05
$
0.10
Acquisition integration, divestiture charges and transaction
costs in 2024 and 2023 are primarily related to acquisitions
completed prior to 2023, including other charges and income to
acquire and exit businesses. These charges were included in Cost of
products sold, Selling and administrative expense, Research and
development expense, or Other expense (income) - net. In Business
Segment Information, the charges were included in Other expense -
net.
Note 4. RESTRUCTURING CHARGES
In the second quarter of 2020, Eaton initiated a multi-year
restructuring program to reduce its cost structure and gain
efficiencies in its business segments and at corporate in order to
initially respond to declining market conditions brought on by the
COVID-19 pandemic. Since the inception of the program, the Company
incurred expenses of $199 million for workforce reductions and $184
million for plant closing and other costs, resulting in total
charges of $382 million through December 31, 2023. This multi-year
restructuring program was substantially complete at the end of
2023, with final payments expected to be made in 2024.
During the first quarter of 2024, Eaton implemented a new
multi-year restructuring program to accelerate opportunities to
optimize its operations and global support structure. These actions
will better align the Company's functions to support anticipated
growth and drive greater effectiveness throughout the Company.
Restructuring charges incurred under this program were $15 million
in the second quarter and $78 million in the first six months of
2024. This restructuring program is expected to be completed in
2026 and is expected to incur additional expenses related to
workforce reductions of $208 million and plant closing and other
costs of $89 million, resulting in total estimated charges of $375
million for the entire program. The Company expects mature year
benefits of $325 million when the multi-year program is fully
implemented.
A summary of restructuring program charges is as follows:
Three months ended June 30
Six months ended June 30
(In millions except for per share
data)
2024
2023
2024
2023
Workforce reductions
$
9
$
15
$
68
$
17
Plant closing and other
7
15
11
22
Total before income taxes
15
29
78
39
Income tax benefit
3
6
18
8
Total after income taxes
$
12
$
24
$
61
$
31
Per ordinary share - diluted
$
0.03
$
0.06
$
0.15
$
0.08
Restructuring program charges related to the following
segments:
Three months ended June 30
Six months ended June 30
(In millions)
2024
2023
2024
2023
Electrical Americas
$
1
$
1
$
8
$
3
Electrical Global
4
14
27
18
Aerospace
—
2
8
3
Vehicle
4
1
27
3
eMobility
—
6
—
7
Corporate
7
5
7
6
Total charges
$
15
$
29
$
78
$
39
These restructuring program charges were included in Cost of
products sold, Selling and administrative expense, Research and
development expense, or Other expense (income) – net, as
appropriate. In Business Segment Information, these restructuring
program charges are treated as Corporate items.
Note 5. INTANGIBLE ASSET AMORTIZATION EXPENSE
Intangible asset amortization expense is as follows:
Three months ended June 30
Six months ended June 30
(In millions except for per share
data)
2024
2023
2024
2023
Intangible asset amortization expense
$
106
$
113
$
212
$
237
Income tax benefit
23
24
45
51
Total after income taxes
$
83
$
88
$
167
$
186
Per ordinary share - diluted
$
0.20
$
0.21
$
0.42
$
0.46
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240731508708/en/
Eaton Corporation plc Jennifer Tolhurst Media Relations +1 (440)
523-4006 jennifertolhurst@eaton.com
Yan Jin Investor Relations +1 (440) 523-7558
Eaton (NYSE:ETN)
過去 株価チャート
から 7 2024 まで 8 2024
Eaton (NYSE:ETN)
過去 株価チャート
から 8 2023 まで 8 2024
