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May 2, 2023
DUBLIN – Intelligent power management company Eaton Corporation plc (NYSE:ETN) today announced that earnings per share were $1.59 for the first quarter of 2023. Excluding charges of $0.24 per share related to intangible amortization, $0.03 per share related to acquisitions and divestitures, and $0.02 per share related to a multi-year restructuring program, adjusted earnings per share of $1.88 were a first quarter record and up 16% over the first quarter of 2022.
Sales in the quarter were $5.5 billion, up 13% from the first quarter of 2022. Organic sales were up 15%, which was partially offset by 2% from negative currency translation.
Segment margins were 19.7%, a first quarter record and a 90-basis point improvement over the first quarter of 2022.
Operating cash flow in the quarter was $335 million and free cash flow was $209 million, up $293 million and $282 million, respectively, over the same period in 2022.
Craig Arnold, Eaton chairman and chief executive officer, said, “We’re encouraged by strong operational performance as we start the year, with record earnings per share and segment margins. Strong backlog growth, particularly in Electrical and Aerospace, points to ongoing demand across our markets. We're confident in our ability to capitalize on growth drivers – including the effects of re-industrialization in North America and the megatrends of electrification, energy transition and digitalization – to deliver on our targets."
For the full year 2023, the company is increasing its organic growth guidance from 7-9% to 9-11% and raising adjusted earnings per share to between $8.30 and $8.50, up $0.16 at the midpoint. For the second quarter of 2023, the company anticipates organic growth of 10-12% and adjusted earnings per share of between $2.04 and $2.14.
Business Segment Results
Sales for the Electrical Americas segment were $2.3 billion, a first quarter record and up 21% from the first quarter of 2022. Organic sales were up 22%, partially offset by negative currency translation. Operating profits were $525 million, a first quarter record and up 45% over the first quarter of 2022. Operating margins in the quarter were 22.9%, a first quarter record and up 380 basis points over the first quarter of 2022.
The twelve-month rolling average of orders in the first quarter was up 18% organically, with particular strength in data center, utility and industrial markets. Backlog at the end of March was up 51% organically over March 2022.
Sales for the Electrical Global segment were a record $1.5 billion, up 4% from the first quarter of 2022. Organic sales were up 8%, partially offset by 3% negative currency translation and 1% from a business divestiture. 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 strength in data center, commercial and institutional, and utility markets. Backlog at the end of March was up 3% organically over March 2022.
Aerospace segment sales were $803 million, a first quarter record and up 12% from the first quarter of 2022. Organic sales were up 13%, partially offset by 1% negative currency translation. Operating profits were $180 million, a first quarter record and up 13% from the first quarter of 2022. Operating margins in the quarter were 22.5%, up 40 basis points over the first quarter of 2022.
The twelve-month rolling average of orders in the first quarter was up 21% organically, driven by strength in all markets. Backlog at the end of March was up 27% over March 2022.
The Vehicle segment posted sales of $739 million, up 10% from the first quarter of 2022. Organic sales were up 11%, partially offset by 1% from negative currency translation. Operating profits were $107 million and operating margins in the quarter were 14.5%.
eMobility segment sales were a record $147 million, up 17% over the first quarter of 2022. Organic sales were up 18%, partially offset by 1% negative currency translation. The segment recorded an operating loss of $4 million, reflecting continued investment in research and development and start-up costs associated with new program wins.
Eaton is an intelligent power management company dedicated to improving the quality of life and protecting the environment for people everywhere. 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, helping to solve the world’s most urgent power management challenges, and doing what’s best for our stakeholders and all of society.
Founded in 1911, Eaton is marking its 100th anniversary of being listed on the New York Stock Exchange. We reported revenues of $20.8 billion in 2022 and serve customers in more than 170 countries. For more information, visit www.eaton.com. Follow us on Twitter and 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 the second quarter and full year 2023 adjusted earnings per share, organic sales growth, and anticipated 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: the course of the COVID-19 pandemic globally and government actions related thereto; geopolitical tensions, 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; 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, 2023, are available here.
Contact:
Jennifer Tolhurst
Media Relations
+1 (440) 523-4006
jennifertolhurst@eaton.com
Yan Jin
Investor Relations
+1 (440) 523-7558
