- Fourth quarter earnings per share of $2.45, a fourth quarter
record and up 4% over 2023, and record fourth quarter adjusted
earnings per share of $2.83, up 11% over 2023
- Record segment margins of 24.7%, 190 basis points above the
fourth quarter of 2023
- Strong backlog growth of 27% in Electrical and 16% in
Aerospace
- Order growth of 16% in Electrical Americas with 1.2
book-to-bill ratio on a rolling twelve-month basis
- For full year 2024, record earnings per share of $9.50 with
8% organic growth and record adjusted earnings per share of $10.80,
up 18% over 2023
- For full year 2025, earnings per share expected to be
between $10.60 and $11.00, up 14% at the midpoint over 2024, and
adjusted earnings per share expected to be between $11.80 and
$12.20, up 11% at the midpoint over 2024
Intelligent power management company Eaton Corporation plc
(NYSE:ETN) today announced that fourth quarter 2024 earnings per
share were $2.45, a fourth quarter record and up 4% over the fourth
quarter of 2023. Excluding charges of $0.22 per share related to
intangible amortization, $0.14 per share related to a multi-year
restructuring program, and $0.02 per share related to acquisitions
and divestitures, adjusted earnings per share of $2.83 were a
fourth quarter record and up 11% over the fourth quarter of
2023.
Sales in the quarter were $6.2 billion, a fourth quarter record
and up 5% from the fourth quarter of 2023. Organic sales were up
6%, which was partially offset by 1% from negative currency
translation. Hurricane Helene and labor strikes in the aerospace
industry negatively impacted sales by approximately $80 million, or
130 basis points.
Segment margins were 24.7%, a quarterly record, above the high
end of the latest guidance range and a 190-basis point improvement
over the fourth quarter of 2023.
Operating cash flow was $1.6 billion and free cash flow was $1.3
billion, both quarterly records and up 23% and 27%, respectively,
over the same period in 2023.
Craig Arnold, Eaton chairman and chief executive officer, said,
“Once again, we delivered on our commitments in the quarter,
reporting record segment margins and strong earnings per share. We
continue to see positive market activity with orders at high levels
and ongoing backlog strength."
For the full year 2024, sales were a record $24.9 billion, up 7%
from 2023. Organic sales were up 8%, which was partially offset by
1% from negative currency translation.
Segment margins of 24.0% for 2024 were a record and above the
high end of the latest guidance range. This represents a 200-basis
point improvement over the full year 2023.
Earnings per share for 2024 were a record $9.50. Excluding
charges of $0.84 per share related to intangible amortization,
$0.40 per share related to a multi-year restructuring program, and
$0.06 per share related to acquisitions and divestitures, adjusted
earnings per share were a record $10.80, up 18% over 2023.
Operating cash flow for 2024 was $4.3 billion and free cash flow
was $3.5 billion, both records and up 19% and 23%, respectively,
over the same period in 2023.
On full year results, Arnold continued, “Our strong performance
in 2024 was a result of robust demand and our team's successful
execution. We're confident in that continued momentum into 2025 as
Eaton is in a unique position to deliver differentiated performance
amid powerful megatrends driving higher growth in our markets."
Guidance
For the full year 2025, the company is issuing the following
guidance:
- Organic growth of 7-9%
- Segment margins of 24.4-24.8%
- Earnings per share between $10.60 and $11.00, up 14% at the
midpoint over the prior year
- Adjusted earnings per share between $11.80 and $12.20, up 11%
at the midpoint over the prior year
For the first quarter of 2025, the company anticipates:
- Organic growth of 5.5-7.5%
- Segment margins of 23.7-24.1%
- Earnings per share between $2.30 and $2.40
- Adjusted earnings per share between $2.65 and $2.75
Business Segment Results
Sales for the Electrical Americas segment were a fourth quarter
record $2.9 billion, up 9% from the fourth quarter of 2023, driven
entirely by organic sales growth. Operating profits were a record
$918 million, up 20% over the fourth quarter of 2023. Operating
margins in the quarter were a record 31.6%, up 310 basis points
over the fourth quarter of 2023.
The twelve-month rolling average of orders in the fourth quarter
was up 16% organically. Backlog at the end of December remained at
record levels, up 29% organically over December 2023.
Sales for the Electrical Global segment were a fourth quarter
record $1.6 billion, up 4% from the fourth quarter of 2023. Organic
sales were up 5.5%, which was partially offset by 1.5% from
negative currency translation. Operating profits were $277 million
and operating margins in the quarter were 17.7%.
The twelve-month rolling average of orders in the fourth quarter
was up 4% organically. Backlog at the end of December was up 16%
organically over December 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 $971 million, up 9% from
the fourth quarter of 2023, driven entirely by organic sales
growth. Operating profits were a fourth quarter record $222
million, up 11% over the fourth quarter of 2023, and operating
margins in the quarter were 22.9%, up 50 basis points over the
fourth quarter of 2023.
The twelve-month rolling average of orders in the fourth quarter
was up 10% organically. The backlog at the end of December was up
16% organically over December 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 $647 million, down 10% from
the fourth quarter of 2023, driven by organic sales decline of 7%
and negative currency translation of 3%. Operating profits were
$122 million and operating margins were a fourth quarter record
18.8%, up 90 basis points over the fourth quarter of 2023.
eMobility segment sales were $147 million, down 11% over the
fourth quarter of 2023, driven by organic sales decline of 10% and
negative currency translation of 1%. The segment recorded an
operating profit of $3 million and operating margins in the quarter
were 1.8%.
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.
Founded in 1911, Eaton has continuously evolved to meet the
changing and expanding needs of our stakeholders. With revenues of
nearly $25 billion in 2024, the company serves 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 fourth 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 fourth quarter results,
which will be covered during the call.
This news release contains forward-looking statements concerning
first quarter and full year 2025 earnings per share, adjusted
earnings per share, organic growth and segment margins; 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; 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 December 31, 2024, are available on the company’s website,
www.eaton.com.
EATON CORPORATION plc
CONSOLIDATED STATEMENTS OF
INCOME
Three months ended December
31
Year ended December 31
(In millions except for per share
data)
2024
2023
2024
2023
Net sales
$
6,240
$
5,967
$
24,878
$
23,196
Cost of products sold
3,811
3,732
15,375
14,762
Selling and administrative expense
1,003
956
4,077
3,795
Research and development expense
201
201
794
754
Interest expense - net
42
27
130
151
Other expense (income) - net
16
(37
)
(64
)
(93
)
Income before income taxes
1,167
1,088
4,566
3,827
Income tax expense
195
141
768
604
Net income
972
947
3,798
3,223
Less net income for noncontrolling
interests
(1
)
(1
)
(4
)
(5
)
Net income attributable to Eaton
ordinary shareholders
$
971
$
946
$
3,794
$
3,218
Net income per share attributable to
Eaton ordinary shareholders
Diluted
$
2.45
$
2.35
$
9.50
$
8.02
Basic
2.46
2.37
9.54
8.06
Weighted-average number of ordinary
shares outstanding
Diluted
396.0
401.8
399.4
401.1
Basic
394.1
399.6
397.6
399.1
Reconciliation of net income
attributable to Eaton ordinary shareholders to adjusted
earnings
Net income attributable to Eaton ordinary
shareholders
$
971
$
946
$
3,794
$
3,218
Excluding acquisition and divestiture
charges (income), after-tax
9
(15
)
26
39
Excluding restructuring program charges,
after-tax
56
9
160
46
Excluding intangible asset amortization
expense, after-tax
84
83
335
353
Adjusted earnings
$
1,120
$
1,024
$
4,314
$
3,657
Net income per share attributable to Eaton
ordinary shareholders - diluted
$
2.45
$
2.35
$
9.50
$
8.02
Excluding per share impact of acquisition
and divestiture charges (income), after-tax
0.02
(0.04
)
0.06
0.10
Excluding per share impact of
restructuring program charges, after-tax
0.14
0.02
0.40
0.11
Excluding per share impact of intangible
asset amortization expense, after-tax
0.22
0.22
0.84
0.89
Adjusted earnings per ordinary
share
$
2.83
$
2.55
$
10.80
$
9.12
See accompanying notes.
EATON CORPORATION plc
BUSINESS SEGMENT INFORMATION
Three months ended December
31
Year ended December 31
(In millions)
2024
2023
2024
2023
Net sales
Electrical Americas
$
2,905
$
2,672
$
11,436
$
10,098
Electrical Global
1,569
1,512
6,248
6,084
Aerospace
971
895
3,744
3,413
Vehicle
647
723
2,790
2,965
eMobility
147
165
662
636
Total net sales
$
6,240
$
5,967
$
24,878
$
23,196
Segment operating profit (loss)
Electrical Americas
$
918
$
763
$
3,455
$
2,675
Electrical Global
277
284
1,149
1,176
Aerospace
222
200
859
780
Vehicle
122
129
502
482
eMobility
3
(16
)
(7
)
(21
)
Total segment operating profit
1,542
1,360
5,959
5,093
Corporate
Intangible asset amortization expense
(107
)
(107
)
(425
)
(450
)
Interest expense - net
(42
)
(27
)
(130
)
(151
)
Pension and other postretirement benefits
income
10
13
40
46
Restructuring program charges
(70
)
(11
)
(202
)
(57
)
Other expense - net
(166
)
(141
)
(675
)
(654
)
Income before income taxes
1,167
1,088
4,566
3,827
Income tax expense
195
141
768
604
Net income
972
947
3,798
3,223
Less net income for noncontrolling
interests
(1
)
(1
)
(4
)
(5
)
Net income attributable to Eaton
ordinary shareholders
$
971
$
946
$
3,794
$
3,218
See accompanying notes.
EATON CORPORATION plc
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions)
December 31, 2024
December 31, 2023
Assets
Current assets
Cash
$
555
$
488
Short-term investments
1,525
2,121
Accounts receivable - net
4,619
4,475
Inventory
4,227
3,739
Prepaid expenses and other current
assets
874
851
Total current assets
11,801
11,675
Property, plant and equipment - net
3,729
3,530
Other noncurrent assets
Goodwill
14,713
14,977
Other intangible assets
4,658
5,091
Operating lease assets
806
648
Deferred income taxes
609
458
Other assets
2,066
2,052
Total assets
$
38,381
$
38,432
Liabilities and shareholders’
equity
Current liabilities
Short-term debt
$
—
$
8
Current portion of long-term debt
674
1,017
Accounts payable
3,678
3,365
Accrued compensation
670
676
Other current liabilities
2,835
2,680
Total current liabilities
7,857
7,747
Noncurrent liabilities
Long-term debt
8,478
8,244
Pension liabilities
741
768
Other postretirement benefits
liabilities
164
180
Operating lease liabilities
669
533
Deferred income taxes
275
402
Other noncurrent liabilities
1,667
1,489
Total noncurrent liabilities
11,994
11,616
Shareholders’ equity
Eaton shareholders’ equity
18,488
19,036
Noncontrolling interests
43
33
Total equity
18,531
19,069
Total liabilities and equity
$
38,381
$
38,432
See accompanying notes.
EATON CORPORATION plc NOTES TO THE FOURTH 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 first quarter and full year net income per
ordinary share and adjusted earnings per ordinary share guidance
for 2025 is as follows:
Three months ended
March 31, 2025
Year ended
December 31, 2025
Net income per share attributable to Eaton
ordinary shareholders - diluted
$2.30 - $2.40
$10.60 - $11.00
Excluding per share impact of acquisition
and divestiture charges, after tax
0.01
0.04
Excluding per share impact of
restructuring program charges, after tax
0.13
0.32
Excluding per share impact of intangible
asset amortization expense, after tax
0.21
0.84
Adjusted earnings per ordinary share
$2.65 - $2.75
$11.80 - $12.20
Reconciliations of operating cash flow to free cash flow are as
follows:
Three months ended December
31
(In millions)
2024
2023
Operating cash flow
$
1,597
$
1,298
Capital expenditures for property, plant
and equipment
(255
)
(243
)
Free cash flow
$
1,342
$
1,055
Year ended December 31
(In millions)
2024
2023
Operating cash flow
$
4,327
$
3,624
Capital expenditures for property, plant
and equipment
(808
)
(757
)
Free cash flow
$
3,518
$
2,867
Note 2. ACQUISITIONS AND DIVESTITURE OF BUSINESSES
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.
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 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 Green Motion SA
On March 22, 2021, Eaton acquired Green Motion SA, a leading
designer and manufacturer of electric vehicle charging hardware and
related software based in Switzerland. Green Motion SA was acquired
for $106 million, including $49 million of cash paid at closing and
an initial estimate of $57 million for the fair value of contingent
future consideration based on 2023 and 2024 revenue performance.
The fair value of contingent consideration liabilities is estimated
by discounting contingent payments expected to be made, and may
increase or decrease based on changes in revenue estimates and
discount rates, with a maximum possible undiscounted value of $113
million. As of December 31, 2024, the fair value of the contingent
future payments has been reduced to $6 million based primarily on
lower revenue in 2023 and 2024 compared to the initial estimates at
closing. This reduction is presented in Other expense (income) -
net on the Consolidated Statements of Income.
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 December
31
Year ended December 31
(In millions except for per share
data)
2024
2023
2024
2023
Acquisition integration, divestiture
charges and transaction costs (income)
$
13
$
(14
)
$
36
$
54
Income tax benefit
4
1
10
15
Total after income taxes
$
9
$
(15
)
$
26
$
39
Per ordinary share - diluted
$
0.02
$
(0.04
)
$
0.06
$
0.10
Acquisition integration, divestiture charges and transaction
costs are primarily related to acquisitions completed prior to
2023, including other charges and income to acquire and exit
businesses, and the reduction in fair value of contingent future
consideration from the Green Motion SA acquisition. Costs in 2023
also included certain indemnity claims associated with the sale of
50% interest in the commercial vehicle automated transmission
business in 2017. 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
restructuring program was substantially complete at the end of 2023
and mature year benefits from the program of approximately $265
million were realized 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 $202 million
in 2024. This restructuring program is expected to be completed in
2026 and is expected to incur additional expenses related to
workforce reductions of $183 million and plant closing and other
costs of $90 million, resulting in total estimated charges of $475
million for the entire program. The Company expects mature year
benefits of $375 million when the multi-year program is fully
implemented.
A summary of restructuring program charges is as follows:
Three months ended December
31
Year ended December 31
(In millions except for per share
data)
2024
2023
2024
2023
Workforce reductions
$
42
$
2
$
120
$
19
Plant closing and other
28
9
83
38
Total before income taxes
70
11
202
57
Income tax benefit
14
2
43
11
Total after income taxes
$
56
$
9
$
160
$
46
Per ordinary share - diluted
$
0.14
$
0.02
$
0.40
$
0.11
Restructuring program charges related to the following
segments:
Three months ended December
31
Year ended December 31
(In millions)
2024
2023
2024
2023
Electrical Americas
$
4
$
2
$
12
$
5
Electrical Global
18
4
88
26
Aerospace
2
2
9
5
Vehicle
8
2
40
6
eMobility
22
—
25
7
Corporate
16
2
29
8
Total charges
$
70
$
11
$
202
$
57
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 December
31
Year ended December 31
(In millions except for per share
data)
2024
2023
2024
2023
Intangible asset amortization expense
$
107
$
107
$
425
$
450
Income tax benefit
23
23
91
98
Total after income taxes
$
84
$
83
$
335
$
353
Per ordinary share - diluted
$
0.22
$
0.22
$
0.84
$
0.89
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250130855827/en/
Eaton Corporation plc Jennifer Tolhurst Media Relations +1 (440)
523-4006 jennifertolhurst@eaton.com
Yan Jin Investor Relations +1 (440) 523-7558
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