DUBLIN, Ireland — Power management company Eaton Corporation plc today announced that earnings per share were $1.37 for the fourth quarter of 2021. Excluding charges of $0.23 per share related to intangible amortization, $0.09 per share related to acquisitions and divestitures, and $0.03 per share related to a multi-year restructuring program, adjusted earnings per share of $1.72 were a fourth quarter record and up 19% over the fourth quarter of 2020.
Sales in the fourth quarter of 2021 were $4.8 billion, up 2% from the fourth quarter of 2020. The sales increase consisted of 6% growth in organic sales and 7% growth from acquisitions, which was partially offset by 10% from the divestiture of the Hydraulics business and 1% from negative currency translation.
Fourth quarter segment margins were 19.3%, a fourth quarter record and above the high end of the guidance. This represents a 190-basis point improvement over the fourth quarter of 2020.
Operating cash flow in the fourth quarter of 2021 was $795 million. Excluding $61 million of taxes paid on the Hydraulics sale, adjusted operating cash flow of $856 million and adjusted free cash flow of $693 million were in line with the guidance.
Craig Arnold, Eaton chairman and chief executive officer, said, “We delivered a solid fourth quarter with record adjusted earnings per share, and I’m proud of how our teams are performing in a challenging environment. Our businesses are managing well under continued supply and labor constraints, achieving record fourth quarter segment margins with particular strength in Electrical Global and Aerospace.”
On full year results, Arnold continued, “Amid uncertainties, we’re very pleased with our record performance in 2021 including robust organic growth, record segment margins, transformative portfolio management and outstanding growth in earnings per share.”
For full year 2021, sales were $19.6 billion, up 10% from 2020. The sales increase consisted of 10% growth in organic sales, 5% growth from acquisitions, and 1% from positive currency translation, which was partially offset by 6% from the divestitures of the Lighting and Hydraulics businesses.
Segment margins of 18.9% for 2021 were a record and at the high end of the guidance range. This represents a 250-basis point improvement over full year 2020.
Earnings per share for 2021 were $5.34. Excluding charges of $0.90 per share related to intangible amortization, $0.23 per share related to acquisitions and divestitures, and $0.15 per share related to a multi-year restructuring program, adjusted earnings per share were $6.62, up 35% over 2020.
Operating cash flow for 2021 was $2.2 billion. Excluding $200 million of contributions to Eaton’s U.S. qualified pension plan and $340 million of taxes paid on the Hydraulics sale, adjusted operating cash flow was $2.7 billion and adjusted free cash flow was $2.1 billion.
For full year 2022, the company expects organic growth of 7-9% and adjusted earnings per share to be between $7.30 and $7.70, up 13% at the midpoint over 2021. For the first quarter of 2022, the company anticipates organic growth of 7-9% and adjusted earnings per share to be between $1.55 and $1.65.
Business Segment Results
Sales for the Electrical Americas segment were $1.9 billion, up 13% from the fourth quarter of 2020. Organic sales were up 5% and the acquisition of Tripp Lite added 8%. Operating profits were $368 million, up 3% over the fourth quarter of 2020. Operating margins of 19.2% were down 190 basis points from the fourth quarter of 2020, driven by higher commodity and logistics costs.
While quarterly sales were constrained by supply availability, order activity remained robust with the twelve-month rolling average of orders in the fourth quarter up 20% organically, with particular strength in residential and data center markets. Backlog at the end of December continues to remain strong, up 57% organically over December 2020.
Sales for the Electrical Global segment were $1.4 billion, up 14% over the fourth quarter of 2020. Organic sales were up 15%, partially offset by negative currency translation of 1%. Operating profits were $277 million, up 33% over the fourth quarter of 2020. Operating margins in the quarter were 19.5%, up 290 basis points over the fourth quarter of 2020.
The twelve-month rolling average of orders in the fourth quarter was up 22%, driven by data center, residential and utility markets. The December backlog was also strong, up 51% organically over December 2020.
Aerospace segment sales were $759 million, up 40% from the fourth quarter of 2020. Organic sales were up 4% and the acquisition of Cobham Mission Systems added 37%, which was partially offset by 1% negative currency translation. Operating profits were $189 million, up 91% from the fourth quarter of 2020. Operating margins in the quarter were 24.9%, up 660 basis points over the fourth quarter of 2020.
The twelve-month rolling average of orders in the fourth quarter was up 19% on an organic basis, driven by strength in commercial markets. On an organic basis, backlog at the end of December was up 16% versus December 2020.
The Vehicle segment posted sales of $610 million, down 2% from the fourth quarter of 2020, driven by an organic sales decline of 1% and negative currency translation of 1%. Operating profits were $100 million and operating margins in the quarter were 16.4%.
eMobility segment sales were $88 million, up 4% over the fourth quarter of 2020, driven entirely by organic sales growth. The segment recorded an operating loss of $8 million reflecting continued investment in research and development and start up costs associated with new program wins.
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