[Stay on top of transportation news: Get TTNews in your inbox.]
Power management company Eaton Corp. reported higher net income and modest revenue gains in the fourth quarter, noting that revenue in its vehicle segment dipped but inched up in eMobility — its two smallest segments.
For the quarter ended Dec. 31, Eaton reported net income rose to $551 million, or $1.37 per diluted share, on revenue of $4.7 billion. That compared with net income of $476 million, $1.18, on revenue of $4.6 billion a year earlier.
The vehicle segment — its second-smallest — posted sales of $610 million, down 2% compared with $620 million in Q4 2020, driven by an organic sales decline of 1% and negative currency translation of 1%. Operating profits declined 3% to $100 million compared with $103 million a year ago. Eaton forecasts the vehicle segment in 2022 will grow 7.5% to 9.5% and its operating margin will rise to 18.5% to 18.9%.
“As you’re aware, we had certainly significant supply chain constraints in the segment, including a number of customer shutdowns that impacted our revenue,” Eaton Chairman and CEO Craig Arnold said during a conference call with analysts and investors. “We do, however, think the worst is behind us here, and we’ll see improvement in supply chain-related disruptions this year.”
The Dublin-based company noted today’s diesel engines are more efficient than ever, but significant improvements will be required to achieve 2024 and 2027 emissions regulations.
That will come with improvements in diesel engine efficiency and more widespread use of electric commercial vehicles, according to Eaton, which said it has a portfolio of new technologies that enable vehicle electrification, 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.
Eaton Cummins Automated Transmission Technologies is a 50/50 joint venture between Eaton and Cummins Inc. The global joint venture produces and markets heavy-duty automated transmissions for commercial vehicles.
In the quarter, its eMobility segment sales were $88 million, up 4% over $85 million in Q4 2020, driven entirely by organic sales growth. The segment again, as it did in Q3, recorded an operating loss of $8 million reflecting continued investment in research and development and startup costs associated with new program wins.
“Like our vehicle business, we experienced significant supply chain constraints and customer shutdowns in this segment,” Arnold said.
He forecast the segment would grow 11% to13% in 2022 and operating margin would fall between 0.8% and 1.2%. “We’re well-positioned to realize our long-term objective here, which is building a new $2 billion to $4 billion eMobility business inside of Eaton.”
Want more news? Listen to today's daily briefing above or go here for more info
The eMobility unit is a new business within Eaton that combines elements of its electrical and vehicle businesses to deliver electric vehicle solutions to passenger car, commercial vehicle and off-highway OEMs.
Its largest unit, Electrical Americas, saw Q4 revenue climb to $1.9 billion compared with $1.7 billion a year earlier.
For the full year, Eaton reported net income of $2.1 billion, $5.34, on revenue of $19.6 billion. That compared with net income of $1.4 billion, $3.51, in the 2020 period on revenue of $17.8 billion.
Eaton described its mission as providing sustainable solutions that help customers effectively manage electrical, hydraulic and mechanical power. It sells products in more than 170 countries.