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Power management company Eaton Corp. reported first-quarter net income and revenue rose, and it reached record Q1 segment margins, or the amount of profit or loss produced by one component of a business.
Net income for the period ended March 31 was $533 million, or $1.33 per diluted share, compared with $459 million, $1.14, a year earlier.
Revenue increased to $4.84 billion compared with $4.69 billion in the 2021 period. The increase consisted of 10% growth in organic sales and 6% growth from acquisitions, which partially was offset by 12% from the divestiture of its hydraulics business and 1% from negative currency translation.
First-quarter segment margins were 18.8%, a first-quarter record and at the high end of the guidance. This represents a 110-basis point improvement over the first quarter of 2021.
“We had a record first quarter, the fifth quarter in a row of record performance,” Chairman and CEO Craig Arnold said in a release. First-quarter sales grew 10% organically, above the high end of our guidance. In addition, we continue to see robust demand in our end markets leading to record backlog and accelerating orders up 30% in electrical and up 35% in aerospace on a rolling 12-month basis.”
Total backlog at the end of Q1 was $9.3 billion, with 87% of this backlog targeted for delivery to customers in the next 12 months and the rest thereafter, the company noted.
The vehicle segment posted revenue of $671 million, up 3% from the first quarter of 2021 driven entirely by organic sales growth. Operating profits were $113 million, flat with the first quarter of 2021. Operating margins in the quarter were 16.8%.
Revenue from the commercial vehicles portion increased to $402 million compared with $342 million a year earlier.
“We’re also pursuing a pipeline worth $500 million in annual revenue for our powertrain solutions for leading EV vehicle makers, once again, all incremental,” Arnold said during the earnings call. “So I’d say that we’re well on our way to transforming our legacy vehicle business by selling into EV and other new markets.”
Emobility segment revenue was $126 million, up 52% from $83 million in the first quarter of 2021. The segment recorded an operating loss of $3 million, reflecting continued investment in research and development and startup costs associated with new program wins.
Revenue for the electrical Americas segment was $1.9 billion, up 17% from the first quarter of 2021. Operating profits were $361 million, up 9% over the first quarter of 2021. Operating margins in the quarter were 19.1%, down 140 basis points from the first quarter of 2021 driven by higher commodity and logistics costs, increased growth-related investments and supply chain disruptions.
Revenue for the electrical global segment was $1.4 billion, up 15% compared with the first quarter of 2021. Operating profits were $279 million, up 31% compared with a year earlier. Operating margins in the quarter were 19.4%, up 240 basis points over the first quarter of 2021.
Aerospace segment revenue was $718 million, up 38% compared with the first quarter of 2021. Operating profits were $159 million, up 66%. Operating margins in the quarter were 22.1%, up 360 basis points over the first quarter of 2021.
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Among the company’s quarterly highlights:
• The Vehicle Group in February formed a new ePowertrain business unit, which will focus on products from Eaton’s electrified vehicle transmission, reduction gearing and differential portfolios.
• Combining the product lines into a new ePowertrain business unit creates synergy among Eaton’s powertrain and electric vehicle experts, and allows the Vehicle Group to offer its global customers solutions for commercial and light-duty EVs, according to the company whose U.S. presence is in Galesburg, Mich.
Eaton describes its mission as providing sustainable solutions that help customers effectively manage electrical, hydraulic and mechanical power. It sells products in more than 170 countries.