DUBLIN – Intelligent power management company Eaton Corporation plc today announced that earnings per share were $2.22 for the third quarter of 2023. Excluding charges of $0.21 per share related to intangible amortization, $0.03 per share related to acquisitions and divestitures, and $0.01 per share related to a multi-year restructuring program, adjusted earnings per share of $2.47 were a quarterly record and up 22% over the third quarter of 2022.
Sales in 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.
The company’s backlog was up 18% over the third quarter of 2022, up 4% sequentially.
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.
Craig Arnold, Eaton chairman and chief executive officer, said, “We’re proud to deliver another quarter of record results with continued growth in our backlog. To meet that demand, we are investing more than $1 billion of capital in manufacturing to support the growth driven by electrification, energy transition and digitalization. Given our strong performance and these capacity additions, we continue to look ahead with confidence in our ability to deliver on our growth and margin expansion outlook into 2024 and beyond.”
Business Segment Results
Sales for the Electrical Americas segment were a record $2.6 billion, up 19% from the third quarter of 2022, driven entirely by organic sales growth. 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.
The twelve-month rolling average of orders in the third quarter was down 3% organically from high levels in 2022, with continued growth in the data center, industrial facilities and institutional markets. Backlog at the end of September was up 19% organically over September 2022.
Sales for the Electrical Global segment were a third quarter record $1.5 billion, up 1% from the third quarter of 2022. Organic sales were flat, with positive currency translation adding 2%, partially offset by the impact of a small divestiture. Operating profits were $328 million, a record and up 8% over the third quarter of 2022. Operating margins in the quarter were a record 21.8%, up 120 basis points over the third quarter of 2022.
The twelve-month rolling average of orders in the third quarter was up 1% organically, with strength in the data center and utility markets.
On a rolling twelve-month basis, the book-to-bill ratio for the Electrical businesses remained strong at over 1.1.
Aerospace segment sales were a record $867 million, up 13% from the third quarter of 2022. Organic sales increased 10%, and positive currency translation added 3%. Operating profits were $209 million, a record and up 13% from the third quarter of 2022. Operating margins in the quarter were 24.1%, up 10 basis points over the third quarter of 2022.
The twelve-month rolling average of orders in the third quarter was up 16% organically, with particular strength in the commercial OEM, commercial aftermarket and defense OEM markets. The backlog at the end of September was up 22% over September 2022. On a rolling twelve-month basis, the book-to-bill ratio for the Aerospace segment remained strong at 1.2.
The Vehicle segment posted sales of $753 million, up 1% from the third quarter of 2022. Positive currency translation added 2%, partially offset by organic sales down 1%. Operating profits were $131 million, up 5% over the third quarter of 2022. Operating margins in the quarter were 17.4%, up 60 basis points over the third quarter of 2022.
eMobility segment sales were a record $163 million, up 19% over the third quarter of 2022. Organic sales were up 19% with flat currency translation. The segment broke even in the quarter, with a 150-basis point improvement over the third quarter of 2022, driven by higher volumes from ramping programs and improved net manufacturing productivity.
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