Eaton Corp PLC (ETN) Reports Record Quarterly Results with 18% Backlog Growth

• Eaton Corp PLC (NYSE:ETN) reported record quarterly earnings per share of $2.22, up 22% from 2022.

• The company achieved record quarterly sales with 9% organic sales growth and record quarterly segment margins of 23.6%.

• Operating cash flow for Q3 2023 was a record $1.1 billion, up 18% from the same period in 2022.

• ETN raised its adjusted earnings per share guidance midpoint to $9.00, reflecting 19% growth over 2022.

Eaton Corp PLC (NYSE:ETN) released its Q3 2023 earnings on October 31, 2023, reporting record quarterly results and an 18% growth in backlog. The company's earnings per share were $2.22 for the third quarter of 2023, up 22% from the same period in 2022. Adjusted earnings per share of $2.47 were a quarterly record.

Financial Performance

Sales for the quarter were $5.9 billion, a quarterly record and up 11% from the third quarter of 2022. Organic sales were up 9%, and positive currency translation added 2%. Segment margins were 23.6%, a quarterly record and a 240-basis point improvement over the third quarter of 2022. Operating cash flow was a third quarter record $1.1 billion, and free cash flow was $913 million, up 18% and 10%, respectively, over the same period in 2022.

Guidance and Future Outlook

The company narrowed full year organic growth guidance to a range of 11% to 12%, up 50 basis points at the midpoint, and raised adjusted earnings per share guidance to between $8.95 and $9.05, up $0.25 at the midpoint. The company is also raising full year operating cash flow guidance to $3.3-$3.7 billion, up $100 million at the midpoint. For the fourth quarter of 2023, the company anticipates organic growth of 8-10% and adjusted earnings per share of between $2.39 and $2.49.

Business Segment Results

Sales for the Electrical Americas segment were a record $2.6 billion, up 19% from the third quarter of 2022. Operating profits were a record $719 million, up 41% over the third quarter of 2022. Operating margins in the quarter were a record 27.7%, up 420 basis points over the third quarter of 2022.

Financial Tables

The company's consolidated statements of income for the three months ended September 30, 2023, show net sales of $5.88 billion, cost of products sold of $3.68 billion, and net income attributable to Eaton ordinary shareholders of $891 million. The business segment information for the same period indicates net sales of $2.59 billion for Electrical Americas, $1.5 billion for Electrical Global, and $867 million for Aerospace.

Company Overview

Eaton Corp PLC (NYSE:ETN) is an intelligent power management company dedicated to improving the quality of life and protecting the environment. The company is capitalizing on the global growth trends of electrification and digitalization, accelerating the planets transition to renewable energy, and helping to solve the worlds most urgent power management challenges.

Explore the complete 8-K earnings release (here) from Eaton Corp PLC for further details.

This article first appeared on GuruFocus.