Eaton Reports Record Fourth Quarter 2024 Results, with Strong Orders and Backlog Growth, and Issues Guidance on 2025 Outlook
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Fourth quarter earnings per share of
$2.45 4% over 2023, and record fourth quarter adjusted earnings per share of$2.83 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 and16% 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 8% organic growth and record adjusted earnings per share of$10.80 18% over 2023 -
For full year 2025, earnings per share expected to be between
$10.60 $11.00 14% at the midpoint over 2024, and adjusted earnings per share expected to be between$11.80 $12.20 11% at the midpoint over 2024
Sales in the quarter were
Segment margins were
Operating cash flow was
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
Segment margins of
Earnings per share for 2024 were a record
Operating cash flow for 2024 was
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:
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Organic growth of 7
-9% -
Segment margins of 24.4
-24.8% -
Earnings per share between
$10.60 $11.00 14% at the midpoint over the prior year -
Adjusted earnings per share between
$11.80 $12.20 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 $2.40 -
Adjusted earnings per share between
$2.65 $2.75
Business Segment Results
Sales for the Electrical Americas segment were a fourth quarter record
The twelve-month rolling average of orders in the fourth quarter was up
Sales for the Electrical Global segment were a fourth quarter record
The twelve-month rolling average of orders in the fourth quarter was up
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
The twelve-month rolling average of orders in the fourth quarter was up
The Vehicle segment posted sales of
eMobility segment sales were
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
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
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 |
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CONSOLIDATED STATEMENTS OF INCOME |
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Three months ended
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Year ended
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(In millions except for per share data) |
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2024 |
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2023 |
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2024 |
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2023 |
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Net sales |
$ |
6,240 |
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$ |
5,967 |
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$ |
24,878 |
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$ |
23,196 |
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Cost of products sold |
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3,811 |
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3,732 |
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15,375 |
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14,762 |
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Selling and administrative expense |
|
1,003 |
|
|
|
956 |
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|
4,077 |
|
|
|
3,795 |
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Research and development expense |
|
201 |
|
|
|
201 |
|
|
|
794 |
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|
754 |
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Interest expense - net |
|
42 |
|
|
|
27 |
|
|
|
130 |
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|
|
151 |
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Other expense (income) - net |
|
16 |
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(37 |
) |
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(64 |
) |
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(93 |
) |
Income before income taxes |
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1,167 |
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1,088 |
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4,566 |
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|
|
3,827 |
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Income tax expense |
|
195 |
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|
|
141 |
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|
768 |
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|
|
604 |
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Net income |
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972 |
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|
947 |
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3,798 |
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3,223 |
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Less net income for noncontrolling interests |
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(1 |
) |
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(1 |
) |
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(4 |
) |
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(5 |
) |
Net income attributable to Eaton ordinary shareholders |
$ |
971 |
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$ |
946 |
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$ |
3,794 |
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$ |
3,218 |
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Net income per share attributable to Eaton ordinary shareholders |
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Diluted |
$ |
2.45 |
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$ |
2.35 |
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$ |
9.50 |
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$ |
8.02 |
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Basic |
|
2.46 |
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|
2.37 |
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9.54 |
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8.06 |
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Weighted-average number of ordinary shares outstanding |
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Diluted |
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396.0 |
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401.8 |
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399.4 |
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|
|
401.1 |
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Basic |
|
394.1 |
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|
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399.6 |
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397.6 |
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399.1 |
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Reconciliation of net income attributable to Eaton ordinary shareholders to adjusted earnings |
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Net income attributable to Eaton ordinary shareholders |
$ |
971 |
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$ |
946 |
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$ |
3,794 |
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$ |
3,218 |
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Excluding acquisition and divestiture charges (income), after-tax |
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9 |
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(15 |
) |
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|
26 |
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|
39 |
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Excluding restructuring program charges, after-tax |
|
56 |
|
|
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9 |
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|
|
160 |
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|
|
46 |
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Excluding intangible asset amortization expense, after-tax |
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84 |
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|
83 |
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|
|
335 |
|
|
|
353 |
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Adjusted earnings |
$ |
1,120 |
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$ |
1,024 |
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$ |
4,314 |
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$ |
3,657 |
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Net income per share attributable to Eaton ordinary shareholders - diluted |
$ |
2.45 |
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$ |
2.35 |
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$ |
9.50 |
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$ |
8.02 |
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Excluding per share impact of acquisition and divestiture charges (income), after-tax |
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0.02 |
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(0.04 |
) |
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0.06 |
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0.10 |
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Excluding per share impact of restructuring program charges, after-tax |
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0.14 |
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0.02 |
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0.40 |
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0.11 |
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Excluding per share impact of intangible asset amortization expense, after-tax |
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0.22 |
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0.22 |
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0.84 |
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0.89 |
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Adjusted earnings per ordinary share |
$ |
2.83 |
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$ |
2.55 |
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$ |
10.80 |
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$ |
9.12 |
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See accompanying notes. |
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EATON CORPORATION plc |
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BUSINESS SEGMENT INFORMATION |
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Three months ended
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Year ended
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(In millions) |
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2024 |
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2023 |
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2024 |
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2023 |
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Net sales |
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Electrical |
$ |
2,905 |
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$ |
2,672 |
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$ |
11,436 |
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$ |
10,098 |
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Electrical Global |
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1,569 |
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1,512 |
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6,248 |
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6,084 |
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Aerospace |
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971 |
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895 |
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3,744 |
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3,413 |
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Vehicle |
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647 |
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723 |
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2,790 |
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2,965 |
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eMobility |
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147 |
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165 |
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662 |
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636 |
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Total net sales |
$ |
6,240 |
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$ |
5,967 |
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$ |
24,878 |
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$ |
23,196 |
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Segment operating profit (loss) |
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Electrical |
$ |
918 |
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$ |
763 |
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$ |
3,455 |
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$ |
2,675 |
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Electrical Global |
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277 |
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284 |
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1,149 |
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1,176 |
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Aerospace |
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222 |
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200 |
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859 |
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780 |
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Vehicle |
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122 |
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129 |
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502 |
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482 |
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eMobility |
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3 |
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(16 |
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(7 |
) |
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(21 |
) |
Total segment operating profit |
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1,542 |
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1,360 |
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5,959 |
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|
5,093 |
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Corporate |
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Intangible asset amortization expense |
|
(107 |
) |
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|
(107 |
) |
|
|
(425 |
) |
|
|
(450 |
) |
Interest expense - net |
|
(42 |
) |
|
|
(27 |
) |
|
|
(130 |
) |
|
|
(151 |
) |
Pension and other postretirement benefits income |
|
10 |
|
|
|
13 |
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|
|
40 |
|
|
|
46 |
|
Restructuring program charges |
|
(70 |
) |
|
|
(11 |
) |
|
|
(202 |
) |
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|
(57 |
) |
Other expense - net |
|
(166 |
) |
|
|
(141 |
) |
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|
(675 |
) |
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|
(654 |
) |
Income before income taxes |
|
1,167 |
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|
|
1,088 |
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|
|
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 |
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|
$ |
946 |
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|
$ |
3,794 |
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|
$ |
3,218 |
|
See accompanying notes. |
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EATON CORPORATION plc |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(In millions) |
December 31, 2024 |
December 31, 2023 |
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Assets |
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Current assets |
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Cash |
$ |
555 |
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$ |
488 |
Short-term investments |
|
1,525 |
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|
2,121 |
Accounts receivable - net |
|
4,619 |
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|
4,475 |
Inventory |
|
4,227 |
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|
3,739 |
Prepaid expenses and other current assets |
|
874 |
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|
851 |
Total current assets |
|
11,801 |
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|
11,675 |
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Property, plant and equipment - net |
|
3,729 |
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|
3,530 |
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Other noncurrent assets |
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Goodwill |
|
14,713 |
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|
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 |
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Liabilities and shareholders’ equity |
|
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Current liabilities |
|
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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 |
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Noncurrent liabilities |
|
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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 |
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|
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Shareholders’ equity |
|
|
|
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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. |
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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:
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Three months ended March 31, 2025 |
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Year ended December 31, 2025 |
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Net income per share attributable to Eaton ordinary shareholders - diluted |
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Excluding per share impact of acquisition and divestiture charges, after tax |
0.01 |
|
0.04 |
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Excluding per share impact of restructuring program charges, after tax |
0.13 |
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0.32 |
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Excluding per share impact of intangible asset amortization expense, after tax |
0.21 |
|
0.84 |
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Adjusted earnings per ordinary share |
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Reconciliations of operating cash flow to free cash flow are as follows:
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Three months ended
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(In millions) |
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2024 |
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|
2023 |
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Operating cash flow |
$ |
1,597 |
|
|
$ |
1,298 |
|
Capital expenditures for property, plant and equipment |
|
(255 |
) |
|
|
(243 |
) |
Free cash flow |
$ |
1,342 |
|
|
$ |
1,055 |
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Year ended
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(In millions) |
|
2024 |
|
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|
2023 |
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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
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
Acquisition of a
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
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
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:
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Three months ended
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Year ended
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(In millions except for per share data) |
2024 |
|
2023 |
|
2024 |
|
2023 |
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Acquisition integration, divestiture charges and transaction costs (income) |
$ |
13 |
|
$ |
(14 |
) |
|
$ |
36 |
|
$ |
54 |
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Income tax benefit |
|
4 |
|
|
1 |
|
|
|
10 |
|
|
15 |
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Total after income taxes |
$ |
9 |
|
$ |
(15 |
) |
|
$ |
26 |
|
$ |
39 |
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Per ordinary share - diluted |
$ |
0.02 |
|
$ |
(0.04 |
) |
|
$ |
0.06 |
|
$ |
0.10 |
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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
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
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
A summary of restructuring program charges is as follows:
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Three months ended
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Year ended
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(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
|
|
Year ended
|
||||||||||||
(In millions) |
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Electrical |
$ |
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
|
|
Year ended
|
||||||||||||
(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
Source: Eaton Corporation plc
