DUBLIN– Intelligent power management company Eaton Corporation plc today announced that earnings per share were $2.35 for the fourth quarter of 2023. Excluding charges of $0.22 per share related to intangible amortization, $0.02 per share related to a multi-year restructuring program, and income of $0.04 per share related to acquisitions and divestitures, adjusted earnings per share of $2.55 were a record and up 24% over the fourth quarter of 2022.
Sales in the quarter were $6.0 billion, a record and up 11% from the fourth quarter of 2022, driven by 10% organic sales growth and 1% foreign exchange.
Segment margins were 22.8%, a fourth quarter record and a 200-basis point improvement over the fourth quarter of 2022.
Operating cash flow was $1.3 billion and free cash flow was $1.1 billion, both records and up 9% and 8%, respectively, over the same period in 2022.
Craig Arnold, Eaton chairman and chief executive officer, said, “We’re pleased with our teams’ strong execution in the fourth quarter, which resulted in record quarterly sales, adjusted earnings and operating cash flow to close the year. Ongoing strength in our backlog shows robust demand and gives us continued confidence in our growth outlook.”
For the full year 2023, sales were a record $23.2 billion, up 12% from 2022, driven entirely by organic sales growth.
Segment margins of 22.0% for 2023 were a record and at the high end of the latest guidance range. This represents a 180-basis point improvement over the full year 2022.
Earnings per share for 2023 were a record $8.02. Excluding charges of $0.89 per share related to intangible amortization, $0.11 per share related to a multi-year restructuring program, and $0.10 per share related to acquisitions and divestitures, adjusted earnings per share were a record $9.12, up 20% over 2022.
Operating cash flow for 2023 was $3.6 billion and free cash flow was $2.9 billion, both records and up 43% and 48%, respectively, over the same period in 2022.
On full year results, Arnold continued, “With our strong performance in 2023, we’ve continued to deliver on our commitments. And we’re not finished yet – we’re investing to position the company for ongoing growth and performance over the long term. That’s why we’re announcing a $375 million multi-year restructuring program, which we expect to deliver $325 million of mature year benefits. We’re confident with these proactive steps – growing the company while also reducing costs – we’ll be able to generate strong shareholder returns for years to come.”
For the full year 2024, the company expects organic growth of 6.5-8.5% and adjusted earnings per share to be between $9.95 and $10.35, up 11% at the midpoint over 2023. For the first quarter of 2024, the company anticipates organic growth of 6-8% and adjusted earnings per share to be between $2.21 and $2.31.
Business Segment Results
Sales for the Electrical Americas segment were a record $2.7 billion, up 16% from the fourth quarter of 2022, driven entirely by organic sales growth. Operating profits were a record $763 million, up 40% over the fourth quarter of 2022. Operating margins in the quarter were a record 28.5%, up 480 basis points over the fourth quarter of 2022.
The twelve-month rolling average of orders in the fourth quarter was down 4% organically from high levels in 2022, with growth in the data center, machinery OEM and institutional markets. Backlog at the end of December remains at record levels, up 18% organically over December 2022.
Sales for the Electrical Global segment were a fourth quarter record $1.5 billion, up 6% from the fourth quarter of 2022, driven by organic sales growth of 4% and foreign exchange of 2%. Operating profits were $284 million, a fourth quarter record, and operating margins in the quarter were 18.8%.
The twelve-month rolling average of orders in the fourth 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 $895 million, up 10% from the fourth quarter of 2022. Organic sales increased 8%, and currency translation added 2%. Operating profits were $200 million, a fourth quarter record and up 1% from the fourth quarter of 2022. Operating margins in the quarter were 22.4%.
The twelve-month rolling average of orders in the fourth quarter was up 7% organically, with particular strength in commercial OEM, commercial aftermarket and defense aftermarket. The backlog at the end of December was up 13% over December 2022. On a rolling twelve-month basis, the book-to-bill ratio for the Aerospace segment remained strong at 1.1.
The Vehicle segment posted sales of $723 million, up 2% from the fourth quarter of 2022, driven entirely by favorable foreign exchange. Operating profits were $129 million, up 21% over the fourth quarter of 2022. Operating margins in the quarter were 17.9%, up 270 basis points over the fourth quarter of 2022.
eMobility segment sales were a record $165 million, up 19% over the fourth quarter of 2022, driven by organic sales growth of 18% and foreign exchange of 1%. The segment recorded an operating loss of $16 million, reflecting the timing of program start-up costs associated with new program wins.