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Eaton (ETN) to Report Q4 Earnings: What's in the Cards?

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Eaton Corporation (ETN - Free Report) is scheduled to release fourth-quarter 2021 earnings on Feb 4, before market open. This power management company delivered an earnings surprise of 8.1% in the last four quarters, on average.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors at Play

Eaton’s fourth-quarter earnings are likely to have benefited from lower shares outstanding than the year-ago level. The rollout of vaccines and an improvement in end-market conditions are expected to have increased the demand for its products, and boosted earnings.

Eaton’s fourth-quarter performance is likely to have been impacted by the lingering supply constraints. Acquisitions & divestitures are likely to have had a negative impact on Eaton’s fourth-quarter earnings.

Expectations

Eaton expects fourth-quarter earnings in the range of $1.68-$1.78 per share. ETN now expects organic revenue growth in the range of 7-9%. Segment operating margin is expected in the range of 18.8-19.2% for the quarter.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.72 per share, indicating a 34.4% increase from the prior-year reported figure.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Eaton this time around. The combination of a positive Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here as you will see below.

Eaton Corporation, PLC Price, Consensus and EPS Surprise

Eaton Corporation, PLC Price, Consensus and EPS Surprise

Eaton Corporation, PLC price-consensus-eps-surprise-chart | Eaton Corporation, PLC Quote

Earnings ESP: Eaton has an Earnings ESP of -0.02%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Eaton carries a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Investors can consider the following players from the same sector that have the right combination of elements to beat on earnings in the upcoming releases.

Graco Inc. (GGG - Free Report) is likely to come up with an earnings beat when it reports fourth-quarter 2021 on Jan 31 after the market closes. It has an Earnings ESP of +0.22% and a Zacks Rank of 2, at present.

Graco’s long-term (three to five years) earnings growth is projected at 8%. The Zacks Consensus Estimate for GGG’s 2022 earnings per share indicates year-over-year growth of 12.3%.

Sealed Air Corporation (SEE - Free Report) is likely to come up with an earnings beat when it reports fourth-quarter 2021 results on Feb 17 before the market opens. It has an Earnings ESP of +1.75% and a Zacks Rank of 2, at present.

Sealed Air’s long-term earnings growth is projected at 11.3%. The Zacks Consensus Estimate for SEE’s 2022 earnings per share indicates year-over-year growth of 16.8%.

Illinois Tool Works Inc. (ITW - Free Report) is likely to come up with an earnings beat when it reports fourth-quarter 2021 results on Feb 3 before the market opens. It has an Earnings ESP of +0.22% and a Zacks Rank of 3, at present.

Illinois Tool Works’ long-term earnings growth is projected at 12.3%. The Zacks Consensus Estimate for ITW’s 2022 earnings per share indicates year-over-year growth of 7.5%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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