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Eaton Corp. reported second-quarter net income rose and revenue was flat while segment margins were 20.1%, a quarterly record and above the high end of the guidance.
For the quarter ended June 30, Eaton reported net income of $601 million, or $1.50 per diluted share, compared with $506 million, $1.26, a year earlier.
Revenue was flat at $5.2 billion compared with the 2021 period.
“We had another record quarter amid the external challenges of today’s environment. Robust order growth in electrical and aerospace demonstrates continuing strong demand,” Craig Arnold, Eaton chairman and CEO, said in a release. “This performance validates our active portfolio management strategy aimed at capitalizing on secular growth drivers and maintaining resilience amid potential economic weakness. I want to thank our dedicated teams for their strong execution.”
Eaton’s vehicle segment posted sales of $708 million, up 5% compared with a year earlier. Organic sales were up 7%, partially offset by 2% from negative currency translation.
Operating profits were $108 million and operating margins in the quarter were 15.3%.
The eMobility segment sales were $136 million, up 55% compared with the second quarter of 2021. Organic sales were up 11% and the acquisition of Royal Power Solutions added 46%, which was partially offset by 2% negative currency translation.
The segment recorded an operating loss of $2 million, reflecting continued investment in research and development and startup costs associated with new program wins. Operating margins improved 530 basis points, driven by higher volumes and the impact of the Royal Power Solutions acquisition.
In January, Eaton bought Royal Power Solutions, a U.S.-based manufacturer of high-precision electrical connectivity components used in electric vehicle, energy management, industrial and mobility markets. Eaton paid $600 million for the company.
For the full year 2022, the company has raised its organic growth guidance to 11% to 13% from 9% to 11% and raised adjusted earnings per share to between $7.36 and $7.76.
For the third quarter of 2022, the company anticipates organic growth of 13% to 15% and adjusted earnings per share of between $1.95 and $2.05.
Eaton’s 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.
Eaton noted its vision is to improve the quality of life and the environment through the use of power management technologies and services. As a participant in the U.N. Global Compact, it made a commitment with other companies around the world to continue adopt sustainable and socially responsible practices.
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