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Eaton (ETN) Q3 Earnings Surpass Estimates, Revenues Lag
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Eaton Corporation (ETN - Free Report) reported third-quarter 2021 earnings of $1.75 per share, which surpassed the Zacks Consensus Estimate of $1.73 by 1.2%. Furthermore, earnings were up 30% year over year. The bottom line was within the expected range of $1.72-$1.82 per share.
GAAP earnings for the reported quarter were $1.57 per share compared with $1.11 in the year-ago period. The difference between GAAP and operating earnings for the reported quarter was due to charges of 25 cents associated with intangible amortization and 6 cents related to a multi-year restructuring program, and an income of 13 cents pertaining to acquisitions and divestitures.
Revenues
Total quarterly revenues came in at $4,923 million, which missed the Zacks Consensus Estimate of $5,045 million by 2.4%. Total revenues, however, improved 8.8% from the year-ago quarter.
The year-over-year improvement is due to 8% growth in organic sales, 7% from acquisitions and 1% from positive currency translation, partially offset by a 7% decline from the Hydraulics business divestiture completed during the quarter.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
Electrical Americas’ total third-quarter sales were $1,854 million, up 9.1% from the year-ago level. This improvement was due to improved organic sales and contribution from the acquisition of Tripp Lite.
Electrical Global’s total sales were $1,421 million, up 18.8% from the year-ago quarter. Organic sales were up 18% from the year-ago quarter. Positive currency translation added another 1% to this segment’s sales.
Hydraulics’ total sales were $179 million, down 59.2% from the year-ago quarter.
Aerospace total sales were $745 million, up 37.9% from the year-ago quarter. This was due to improved organic sales, contribution from the acquisition of Cobham Mission Systems and positive currency translation.
Vehicle total sales were $640 million, up 11.7% from the year-ago quarter driven by an improvement in organic sales and positive currency translation.
eMobility segment’s total sales were $84 million, up 6.3% year over year due to improvement in organic sales.
Highlights of the Release
Selling and administrative expenses were $834 million, up 10.6% from the year-ago quarter.
On Aug 2, the company completed the Hydraulics unit’s sale to Danfoss.
Its third-quarter research and development expenses were $152 million, up 15.2% from the prior-year period. Interest expenses for the quarter were $37 million, down 9.8% from the year-ago period.
Orders in Electrical Americas and Electrical Global were up 17% and 17% year over year, respectively. Orders from the Aerospace segment were up 4% from third-quarter 2020 due to strength in the jet markets.
Financial Update
Eaton’s cash was $271 million as of Sep 30, 2021 compared with $438 million on Dec 31, 2020.
As of Sep 30, 2021, the company’s long-term debt was $8,520 million, up from $7,010 million on Dec 31, 2020.
Guidance
Eaton’s fourth-quarter 2021 earnings are expected in the range of $1.68-$1.78 per share. It now expects organic revenue growth in the range of 7-9% for the fourth quarter.
Eaton now expects organic revenue growth within 9-11% for 2021. Segment operating margin for 2021 is now expected in the range of 18.6-19%.
The company expects its 2021 earnings guidance in the range of $6.59-$6.69 per share. It is targeting share buyback in the range of $375-$425 million in 2021. The company’s segment operating margin is expected to be 18.6-19% in 2021.
A.O. Smith Corporation (AOS - Free Report) came up with third-quarter 2021 quarterly earnings of 82 cents per share, which beat the Zacks Consensus Estimate of 67 cents by 22.4%.
AZZ Inc. (AZZ - Free Report) reported second-quarter fiscal 2022 quarterly earnings of 76 cents per share, which beat the Zacks Consensus Estimate of 65 cents by 16.9%.
Franklin Electric (FELE - Free Report) came up with third-quarter 2021 quarterly earnings of 98 cents per share, which lagged the Zacks Consensus Estimate of 92 cents by 6.5%.
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Eaton (ETN) Q3 Earnings Surpass Estimates, Revenues Lag
Eaton Corporation (ETN - Free Report) reported third-quarter 2021 earnings of $1.75 per share, which surpassed the Zacks Consensus Estimate of $1.73 by 1.2%. Furthermore, earnings were up 30% year over year. The bottom line was within the expected range of $1.72-$1.82 per share.
GAAP earnings for the reported quarter were $1.57 per share compared with $1.11 in the year-ago period. The difference between GAAP and operating earnings for the reported quarter was due to charges of 25 cents associated with intangible amortization and 6 cents related to a multi-year restructuring program, and an income of 13 cents pertaining to acquisitions and divestitures.
Revenues
Total quarterly revenues came in at $4,923 million, which missed the Zacks Consensus Estimate of $5,045 million by 2.4%. Total revenues, however, improved 8.8% from the year-ago quarter.
The year-over-year improvement is due to 8% growth in organic sales, 7% from acquisitions and 1% from positive currency translation, partially offset by a 7% decline from the Hydraulics business divestiture completed during the quarter.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
Eaton Corporation, PLC price-consensus-eps-surprise-chart | Eaton Corporation, PLC Quote
Segment Details
Electrical Americas’ total third-quarter sales were $1,854 million, up 9.1% from the year-ago level. This improvement was due to improved organic sales and contribution from the acquisition of Tripp Lite.
Electrical Global’s total sales were $1,421 million, up 18.8% from the year-ago quarter. Organic sales were up 18% from the year-ago quarter. Positive currency translation added another 1% to this segment’s sales.
Hydraulics’ total sales were $179 million, down 59.2% from the year-ago quarter.
Aerospace total sales were $745 million, up 37.9% from the year-ago quarter. This was due to improved organic sales, contribution from the acquisition of Cobham Mission Systems and positive currency translation.
Vehicle total sales were $640 million, up 11.7% from the year-ago quarter driven by an improvement in organic sales and positive currency translation.
eMobility segment’s total sales were $84 million, up 6.3% year over year due to improvement in organic sales.
Highlights of the Release
Selling and administrative expenses were $834 million, up 10.6% from the year-ago quarter.
On Aug 2, the company completed the Hydraulics unit’s sale to Danfoss.
Its third-quarter research and development expenses were $152 million, up 15.2% from the prior-year period. Interest expenses for the quarter were $37 million, down 9.8% from the year-ago period.
Orders in Electrical Americas and Electrical Global were up 17% and 17% year over year, respectively. Orders from the Aerospace segment were up 4% from third-quarter 2020 due to strength in the jet markets.
Financial Update
Eaton’s cash was $271 million as of Sep 30, 2021 compared with $438 million on Dec 31, 2020.
As of Sep 30, 2021, the company’s long-term debt was $8,520 million, up from $7,010 million on Dec 31, 2020.
Guidance
Eaton’s fourth-quarter 2021 earnings are expected in the range of $1.68-$1.78 per share. It now expects organic revenue growth in the range of 7-9% for the fourth quarter.
Eaton now expects organic revenue growth within 9-11% for 2021. Segment operating margin for 2021 is now expected in the range of 18.6-19%.
The company expects its 2021 earnings guidance in the range of $6.59-$6.69 per share. It is targeting share buyback in the range of $375-$425 million in 2021. The company’s segment operating margin is expected to be 18.6-19% in 2021.
Zacks Rank
Currently, Eaton has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Releases
A.O. Smith Corporation (AOS - Free Report) came up with third-quarter 2021 quarterly earnings of 82 cents per share, which beat the Zacks Consensus Estimate of 67 cents by 22.4%.
AZZ Inc. (AZZ - Free Report) reported second-quarter fiscal 2022 quarterly earnings of 76 cents per share, which beat the Zacks Consensus Estimate of 65 cents by 16.9%.
Franklin Electric (FELE - Free Report) came up with third-quarter 2021 quarterly earnings of 98 cents per share, which lagged the Zacks Consensus Estimate of 92 cents by 6.5%.