DUBLIN — Intelligent power management company Eaton Corporation plc (NYSE:ETN) today announced that fourth quarter 2024 earnings per share were $2.45, a fourth quarter record and up 4% over the fourth quarter of 2023. Excluding charges of $0.22 per share related to intangible amortization, $0.14 per share related to a multi-year restructuring program, and $0.02 per share related to acquisitions and divestitures, adjusted earnings per share of $2.83 were a fourth quarter record and up 11% over the fourth quarter of 2023.
Sales in the quarter were $6.2 billion, a fourth quarter record and up 5% from the fourth quarter of 2023. Organic sales were up 6%, which was partially offset by 1% from negative currency translation. Hurricane Helene and labor strikes in the aerospace industry negatively impacted sales by approximately $80 million, or 130 basis points.
Segment margins were 24.7%, a quarterly record, above the high end of the latest guidance range and a 190-basis point improvement over the fourth quarter of 2023.
Operating cash flow was $1.6 billion and free cash flow was $1.3 billion, both quarterly records and up 23% and 27%, respectively, over the same period in 2023.
Craig Arnold, Eaton chairman and chief executive officer, said, “Once again, we delivered on our commitments in the quarter, reporting record segment margins and strong earnings per share. We continue to see positive market activity with orders at high levels and ongoing backlog strength.”
For the full year 2024, sales were a record $24.9 billion, up 7% from 2023. Organic sales were up 8%, which was partially offset by 1% from negative currency translation.
Segment margins of 24.0% for 2024 were a record and above the high end of the latest guidance range. This represents a 200-basis point improvement over the full year 2023.
Earnings per share for 2024 were a record $9.50. Excluding charges of $0.84 per share related to intangible amortization, $0.40 per share related to a multi-year restructuring program, and $0.06 per share related to acquisitions and divestitures, adjusted earnings per share were a record $10.80, up 18% over 2023.
Operating cash flow for 2024 was $4.3 billion and free cash flow was $3.5 billion, both records and up 19% and 23%, respectively, over the same period in 2023.
On full year results, Arnold continued, “Our strong performance in 2024 was a result of robust demand and our team’s successful execution. We’re confident in that continued momentum into 2025 as Eaton is in a unique position to deliver differentiated performance amid powerful megatrends driving higher growth in our markets.”
Guidance
For the full year 2025, the company is issuing the following guidance:
- Organic growth of 7-9%
- Segment margins of 24.4-24.8%
- Earnings per share between $10.60 and $11.00, up 14% at the midpoint over the prior year
- Adjusted earnings per share between $11.80 and $12.20, up 11% at the midpoint over the prior year
For the first quarter of 2025, the company anticipates:
- Organic growth of 5.5-7.5%
- Segment margins of 23.7-24.1%
- Earnings per share between $2.30 and $2.40
- Adjusted earnings per share between $2.65 and $2.75
Business Segment Results
Sales for the Electrical Americas segment were a fourth quarter record $2.9 billion, up 9% from the fourth quarter of 2023, driven entirely by organic sales growth. Operating profits were a record $918 million, up 20% over the fourth quarter of 2023. Operating margins in the quarter were a record 31.6%, up 310 basis points over the fourth quarter of 2023.
The twelve-month rolling average of orders in the fourth quarter was up 16% organically. Backlog at the end of December remained at record levels, up 29% organically over December 2023.
Sales for the Electrical Global segment were a fourth quarter record $1.6 billion, up 4% from the fourth quarter of 2023. Organic sales were up 5.5%, which was partially offset by 1.5% from negative currency translation. Operating profits were $277 million and operating margins in the quarter were 17.7%.
The twelve-month rolling average of orders in the fourth quarter was up 4% organically. Backlog at the end of December was up 16% organically over December 2023.
On a rolling twelve-month basis, the book-to-bill ratio for the Electrical businesses remained strong at 1.1.
Aerospace segment sales were a record $971 million, up 9% from the fourth quarter of 2023, driven entirely by organic sales growth. Operating profits were a fourth quarter record $222 million, up 11% over the fourth quarter of 2023, and operating margins in the quarter were 22.9%, up 50 basis points over the fourth quarter of 2023.
The twelve-month rolling average of orders in the fourth quarter was up 10% organically. The backlog at the end of December was up 16% organically over December 2023. 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 $647 million, down 10% from the fourth quarter of 2023, driven by organic sales decline of 7% and negative currency translation of 3%. Operating profits were $122 million and operating margins were a fourth quarter record 18.8%, up 90 basis points over the fourth quarter of 2023.
eMobility segment sales were $147 million, down 11% over the fourth quarter of 2023, driven by organic sales decline of 10% and negative currency translation of 1%. The segment recorded an operating profit of $3 million and operating margins in the quarter were 1.8%.
Eaton is an intelligent power management company dedicated to protecting the environment and improving the quality of life for people everywhere. We make products for the data center, utility, industrial, commercial, machine building, residential, aerospace and mobility markets. We are guided by our commitment to do business right, to operate sustainably and to help our customers manage power ─ today and well into the future. By capitalizing on the global growth trends of electrification and digitalization, we’re accelerating the planet’s transition to renewable energy sources, helping to solve the world’s most urgent power management challenges, and building a more sustainable society for people today and generations to come.
Founded in 1911, Eaton has continuously evolved to meet the changing and expanding needs of our stakeholders. With revenues of nearly $25 billion in 2024, the company serves customers in more than 160 countries. For more information, visit www.eaton.com. Follow us on LinkedIn.
Notice of conference call: Eaton’s conference call to discuss its fourth quarter results is available to all interested parties today as a live audio webcast at 11 a.m. United States Eastern time via a link on Eaton’s home page. This news release can be accessed under its headline on the home page. Also available on the website before the call will be a presentation on fourth quarter results, which will be covered during the call.
This news release contains forward-looking statements concerning first quarter and full year 2025 earnings per share, adjusted earnings per share, organic growth and segment margins; as well as anticipated multi-year restructuring program charges and savings. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside the company’s control. The following factors could cause actual results to differ materially from those in the forward-looking statements: a global pandemic; geopolitical tensions or war, unanticipated changes in the markets for the company’s business segments; unanticipated downturns in business relationships with customers or their purchases from us; competitive pressures on sales and pricing; supply chain disruptions, unanticipated changes in the cost of material, labor, and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; strikes or other labor unrest at Eaton or at our customers or suppliers; natural disasters; the performance of recent acquisitions; unanticipated difficulties completing or integrating acquisitions; new laws and governmental regulations; interest rate changes; changes in tax laws or tax regulations; stock market and currency fluctuations; and unanticipated deterioration of economic and financial conditions in the United States and around the world. We do not assume any obligation to update these forward-looking statements.
Financial Results
The company’s comparative financial results for the three months ended December 31, 2024, are available here.
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