DUBLIN – Intelligent power management company Eaton Corporation plc today announced that earnings per share were $1.80 for the fourth quarter of 2022. Excluding charges of $0.24 per share related to intangible amortization, $0.04 per share related to acquisitions and divestitures, and income of $0.02 per share related to a multi-year restructuring program, adjusted earnings per share of $2.06 were a quarterly record and up 20% over the fourth quarter of 2021.
Sales in the fourth quarter of 2022 were $5.4 billion, up 12% from the fourth quarter of 2021. Organic sales were up 15% and acquisitions added 1%, which was partially offset by 4% from negative currency translation.
Fourth quarter segment margins were 20.8%, a fourth quarter record and above the midpoint of guidance. This represents a 150-basis point improvement over the fourth quarter of 2021.
Operating cash flow in the fourth quarter of 2022 was $1.2 billion, up 39% over adjusted operating cash flow (which excluded taxes paid on the Hydraulics sale) for the fourth quarter of 2021, and free cash flow was $977 million, up 41% over adjusted free cash flow in the fourth quarter of 2021.
Craig Arnold, Eaton chairman and chief executive officer, said, “We closed 2022 by delivering another quarter of record results and positive momentum. Tailwinds for our performance included strong demand across many of our end markets, robust order growth and continued upward trends in organic growth.”
For the full year 2022, sales were $20.8 billion, up 6% from 2021. The sales increase consisted of 13% growth in organic sales and 3% growth from acquisitions, which was partially offset by 7% from the divestiture of the Hydraulics business and 3% from negative currency translation.
Segment margins of 20.2% for 2022 were a record and at the midpoint of the guidance range. This represents a 130-basis point improvement over the full year 2021.
Earnings per share for 2022 were $6.14. Excluding charges of $0.99 per share related to intangible amortization, $0.37 per share related to acquisitions and divestitures, and $0.07 per share related to a multi-year restructuring program, adjusted earnings per share were $7.57, up 14% over 2021.
Operating cash flow for 2022 was $2.5 billion and free cash flow was $1.9 billion.
On full year results, Arnold continued, “I’m proud of our performance in 2022, including record profits, margins and adjusted earnings per share. These positive results highlight our ability to weather economic uncertainties by maintaining focus on our strategy.”
For the full year 2023, the company expects organic growth of 7-9% and adjusted earnings per share to be between $8.04 and $8.44, up 9% at the midpoint over 2022. For the first quarter of 2023, the company anticipates organic growth of 8-10% and adjusted earnings per share to be between $1.72 and $1.82.
Business Segment Results
Sales for the Electrical Americas segment were $2.3 billion, up 20% from the fourth quarter of 2021, driven entirely by organic sales growth. Operating profits were $545 million, up 48% over the fourth quarter of 2021. Operating margins in the quarter were a record 23.7%, up 450 basis points over the fourth quarter of 2021.
The twelve-month rolling average of orders in the fourth quarter was up 34% organically, with particular strength in data center, utility and industrial markets. Backlog at the end of December was up 87% organically over December 2021.
Sales for the Electrical Global segment were $1.4 billion, flat to the fourth quarter of 2021. Organic sales were up 8%, offset by 7% negative currency translation and 1% from a business divestiture. Operating profits were $268 million, and operating margins in the quarter were 18.7%.
The twelve-month rolling average of orders in the fourth quarter was up 11% organically, with strength in data center and commercial and institutional markets. Backlog at the end of December was up 17% organically over December 2021.
Aerospace segment sales were $812 million, up 7% from the fourth quarter of 2021. Organic sales were up 11%, partially offset by 4% negative currency translation. Operating profits were a record $199 million, up 5% from the fourth quarter of 2021, and operating margins in the quarter were 24.5%.
The twelve-month rolling average of orders also accelerated in the fourth quarter and was up 24% organically, driven by strength in all markets. Backlog at the end of December was up 21% organically over December 2021.
The Vehicle segment posted sales of $707 million, up 16% from the fourth quarter of 2021. Organic sales were up 18%, partially offset by 2% from negative currency translation. Operating profits were $107 million, up 7% over the fourth quarter of 2021, and operating margins in the quarter were 15.2%.
eMobility segment sales were $139 million, up 58% over the fourth quarter of 2021. Organic sales were up 17%, and the acquisition of Royal Power Solutions added 44%, which was partially offset by 3% negative currency translation. The segment recorded an operating loss of $2 million, reflecting continued investment in research and development and start-up costs associated with new program wins. Operating margins improved 780 basis points, driven by higher organic volumes and the impact of the Royal Power Solutions acquisition.
Financial Results
The company’s comparative financial results for the three months ended December 31, 2022, are available here.
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