DUBLIN – Intelligent power management company Eaton Corporation plc today announced that earnings per share were $2.48 for the second quarter of 2024, a second quarter record and up 33% over the second quarter of 2023. Excluding charges of $0.20 per share related to intangible amortization, $0.03 per share related to a multi-year restructuring program, and $0.02 per share related to acquisitions and divestitures, adjusted earnings per share of $2.73 were a record and up 24% over the second quarter of 2023.
Sales in the quarter were $6.4 billion, a record and up 8% from the second quarter of 2023. Organic sales were up 9%, which was partially offset by 1% from negative currency translation.
Segment margins were 23.7%, a quarterly record and a 210-basis point improvement over the second quarter of 2023.
Operating cash flow was $946 million and free cash flow was $759 million, both second quarter records and up 11% and 10%, respectively, over the same period in 2023.
Craig Arnold, Eaton chairman and chief executive officer, said, “We continue to see strong demand across our markets – due to electrification, energy transition and reindustrialization – resulting in record earnings and continued backlog growth. We’re making capacity investments in key product lines to support structurally higher growth, and we remain confident in our outlook. As a result, we are increasing our guidance for the year.”
Guidance
For the full year 2024, the company is raising the following guidance:
- Organic growth from 7-9% to 8-9%
- Segment margins from 22.8-23.2% to 23.3-23.7%
- Earnings per share to between $9.38 and $9.48, up 18% at the midpoint over the prior year
- Adjusted earnings per share to between $10.65 and $10.75, up 17% at the midpoint over the prior year
- Operating cash flow raised $100 million and narrowed to between $4.2 billion to $4.4 billion, and free cash flow raised $100 million and narrowed to between $3.4 billion to $3.6 billion.
For the third quarter of 2024, the company anticipates:
- Organic growth of 8-9%
- Segment margins of 23.5-23.9%
- Earnings per share between $2.42 and $2.52
- Adjusted earnings per share between $2.73 and $2.83.
Business Segment Results
Sales for the Electrical Americas segment were a record $2.9 billion, up 13% from the second quarter of 2023, driven entirely by organic sales growth. Operating profits were a record $859 million, up 28% over the second quarter of 2023. Operating margins in the quarter were a record 29.9%, up 350 basis points over the second quarter of 2023.
The twelve-month rolling average of orders in the second quarter was up 11% organically. Backlog at the end of June remained at record levels, up 29% organically over June 2023.
Sales for the Electrical Global segment were a record $1.6 billion, up 2% from the second quarter of 2023. Organic sales were up 3.5%, which was partially offset by 1.5% from negative currency translation. Operating profits were $305 million, a second quarter record and up 5% over the second quarter of 2023. Operating margins in the quarter were 19.0%, a second quarter record and up 50 basis points over the second quarter of 2023.
The twelve-month rolling average of orders in the second quarter was up 7% organically. Backlog at the end of June was up 16% organically over June 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 $955 million, up 13% from the second quarter of 2023, driven entirely by organic sales growth. Operating profits were $206 million and operating margins in the quarter were 21.5%.
The twelve-month rolling average of orders in the second quarter was up 4% organically. The backlog at the end of June was up 14% over June 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 $723 million, down 4% from the second quarter of 2023, driven by organic sales decline of 3% and negative currency translation of 1%. Operating profits were $130 million, up 13% over the second quarter of 2023. Operating margins in the quarter were 18.0%, up 270 basis points over the second quarter of 2023.
eMobility segment sales were a record $189 million, up 18% over the second quarter of 2023, driven entirely by organic sales growth. The segment recorded an operating profit of $2 million and operating margins in the quarter were 1.3%.