Eaton Notches Record Quarterly Segment Margins of 21.2%

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Diversified supplier Eaton Corp. reported lower net income and higher revenue in the third quarter as it notched record quarterly segment margins of 21.2% — above the high end of guidance and 1.3% above the same quarter in 2021.

The Dublin-based company reported for the quarter ending Sept. 30 net income of $608 million, or $1.52 per diluted share, compared with $630 million, $1.57, a year earlier.

Eaton noted the cost of products sold rose to $3.5 billion compared with $3.3 billion in the 2021 period, while research and development expenses increased to $165 million compared with $152 million a year earlier.



Revenue climbed to $5.3 billion compared with $4.9 billion a year earlier.

“I’m proud of how we continue to deliver record results across our businesses, driven by strong demand and accelerating organic growth,” Craig Arnold, Eaton chairman and CEO, said in a release. “I want to thank our teams for their efforts in successfully navigating both the challenges and the tailwinds of the current environment. I’m confident in our ability to continue executing our strategy and delivering for our stakeholders.”

Craig Arnold

Arnold

On July 1, Eaton acquired a 50% stake in Jiangsu Huineng Electric Co. Ltd’s circuit breaker business, which manufactures and markets low-voltage circuit breakers in China. It is reported within the Electrical Global business segment.

Other business segment results included:

The vehicle segment’s revenue was $744 million, up 16% from the third quarter of 2021. Operating profits were $125 million, and operating margins in the quarter were 16.8%.

Eaton reported new vehicle applications include:

  • An expanding number of commercial vehicle engine brake opportunities
  • A large number of electric vehicle gearing opportunities
  • And advanced variable valve actuation wins with clean technology solutions to lower emissions.

In the commercial vehicle sector already, it noted its technologies enable vehicle electrification and engine braking, improve engine breathing, bring more control to valve management, make exhaust gas recirculation more efficient, and create other opportunities to reduce fuel consumption and related tailpipe emissions. It provides transmissions through Eaton Cummins Automated Transmission Technologies.

The eMobility segment’s sales were $137 million, up 63% over the third quarter of 2021. The segment recorded an operating loss of $2 million, reflecting continued investment in research and development and startup costs associated with new program wins.

The electrical Americas segment’s revenue was $2.2 billion, up 18% from the third quarter of 2021. Operating profits were $511 million, up 27% over the third quarter of 2021. Operating margins in the quarter were 23.5%, up 180 basis points over the third quarter of 2021.

The 12-month rolling average of orders accelerated in the third quarter and was up 36% organically, with particular strength in data center, utility and industrial end markets.

Backlog at the end of September continued to grow to new record levels, it reported, up 97% organically over September 2021.

The electrical global segment’s revenue was $1.5 billion, up 5% over the third quarter of 2021. Operating profits were $305 million, up 7% over the third quarter of 2021. Operating margins were 20.6%, up 50 basis points over the third quarter of 2021.

The aerospace segment’s revenue was $768 million, up 3% from the third quarter of 2021. Operating profits were a record $185 million, up 13% from the third quarter of 2021. Operating margins in the quarter were 24%, up 200 basis points over the third quarter of 2021.

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The 12-month rolling average of orders also accelerated in the third quarter and was up 22% organically, driven by strength in both commercial and military markets.

Eaton is an intelligent power management company dedicated to improving the quality of life and protecting the environment for people everywhere, it noted, and by capitalizing on the global growth trends of electrification and digitalization, it’s accelerating the planet’s transition to renewable energy, helping to solve the world’s most urgent power management challenges, and doing what’s best for its stakeholders and all of society.

Founded in 1911, Eaton reported revenue of $19.6 billion in 2021 and serves customers in about 170 countries.

 

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