Eaton Reports Record First Quarter 2024 Results, with Strong Orders and Backlog Growth

DUBLIN , April 30 /Businesswire/ - Intelligent power management company Eaton Corporation plc (NYSE:ETN) today announced that earnings per share were $2.04 for the first quarter of 2024, a first quarter record and up 28% over the first quarter of 2023. Excluding charges of $0.21 per share related to intangible amortization, $0.12 per share related to a multi-year restructuring program, and $0.03 per share related to acquisitions and divestitures, adjusted earnings per share of $2.40 were also a first quarter record and up 28% over the first quarter of 2023.

Sales in the quarter were $5.9 billion, a first quarter record and up 8% from the first quarter of 2023, driven entirely by organic sales growth.

Segment margins were 23.1%, a first quarter record and a 340-basis point improvement over the first quarter of 2023.

Operating cash flow was $475 million and free cash flow was $292 million, up 42% and 40%, respectively, over the same period in 2023.

Craig Arnold, Eaton chairman and chief executive officer, said, “Growth drivers like increased project activity tied to megatrends, reindustrialization and infrastructure spending continue to drive demand for Eaton’s solutions across our markets, and we remain very confident in our teams' ability to execute on our increased targets for the year. We capitalized on strong growth in our business to start the year, resulting in strong order growth in Electrical and Aerospace and first quarter record segment margins."

Guidance

For the full year 2024, the company is raising:

• Organic growth guidance from 6.5-8.5% to 7-9%
• Segment margin guidance from 22.4-22.8% to 22.8-23.2%
• Earnings per share guidance to between $8.95 and $9.35, up 14% at the midpoint over the prior year
• Adjusted earnings per share guidance to between $10.20 and $10.60, up 14% at the midpoint over the prior year.

For the second quarter of 2024, the company anticipates:

• Organic growth of 6.5-8.5%
• Segment margins of 22.4-22.8%
• Earnings per share between $2.19 and $2.29
• Adjusted earnings per share between $2.52 and $2.62.

Business Segment Results

Sales for the Electrical Americas segment were a record $2.7 billion, up 17% from the first quarter of 2023, driven entirely by organic sales growth. Operating profits were a record $785 million, up 50% over the first quarter of 2023. Operating margins in the quarter were a record 29.2%, up 630 basis points over the first quarter of 2023.

The twelve-month rolling average of orders in the first quarter was up 8% organically, with particular strength in the data center market. Backlog at the end of March remained at record levels, up 31% organically over March 2023.

Sales for the Electrical Global segment were $1.5 billion, flat to the first quarter of 2023. Organic sales were up 1%, which was offset by 1% from negative currency translation. Operating profits were $274 million and operating margins in the quarter were 18.3%.

The twelve-month rolling average of orders in the first quarter was up 4% organically, with particular strength in the data center and utility markets. Backlog at the end of March was up 12% organically over March 2023.

On a rolling twelve-month basis, the book-to-bill ratio for the Electrical businesses remained strong at 1.2.

Aerospace segment sales were a first quarter record $871 million, up 9% from the first quarter of 2023, driven entirely by organic sales growth. Operating profits were $201 million, a first quarter record and up 12% from the first quarter of 2023. Operating margins in the quarter were 23.1%, a first quarter record and up 60 basis points over the first quarter of 2023.

The twelve-month rolling average of orders in the first quarter was up 2% organically, with particular strength in commercial OEM, commercial aftermarket and defense aftermarket. The backlog at the end of March was up 11% over March 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 $724 million, down 2% from the first quarter of 2023. Organic sales were down 3%, which was partially offset by 1% from favorable foreign exchange. Operating profits were $116 million, up 8% over the first quarter of 2023. Operating margins in the quarter were 16.0%, up 150 basis points over the first quarter of 2023.

eMobility segment sales were a first quarter record $158 million, up 7% over the first quarter of 2023, driven entirely by organic sales growth. The segment recorded an operating loss of $4 million, reflecting the timing of program start-up costs to support future volume growth.

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 first 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 first quarter results, which will be covered during the call.

This news release contains forward-looking statements concerning second quarter and full year 2024 earnings per share, adjusted earnings per share, segment margins and organic sales growth, 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 March 31, 2024, are available on the company’s website, www.eaton.com.