Eaton Corporation plc (ETN) Bundle
A Brief History of Eaton Corporation plc
Eaton Corporation plc, a diversified industrial company, has made significant strides in the power management sector. As of 2024, the company operates across various segments, including Electrical Americas, Electrical Global, Aerospace, Vehicle, and eMobility.
Company Overview
Founded in 1911, Eaton has evolved from a manufacturer of truck axles to a global leader in power management solutions. The company's headquarters is located in Dublin, Ireland, with operational facilities and a strong market presence worldwide.
Recent Financial Performance
In the first nine months of 2024, Eaton reported net sales of $18.638 billion, an increase of 8% compared to $17.229 billion in the same period of 2023. The net income attributable to Eaton ordinary shareholders rose to $2.823 billion, up from $2.273 billion in 2023, representing a growth of 24%.
| Financial Metric | 2024 (9 months) | 2023 (9 months) | Change (%) |
|---|---|---|---|
| Net Sales | $18.638 billion | $17.229 billion | 8% |
| Net Income | $2.823 billion | $2.273 billion | 24% |
| Net Income per Share | $7.05 | $5.67 | 24% |
Operational Highlights
Eaton's operating profit for the nine months ended September 30, 2024, reached $3.399 billion, an increase of 24% from $2.739 billion in 2023. The gross profit margin improved to 38.0% from 36.0% in the previous year, driven by operational efficiencies and cost management initiatives.
Debt and Liquidity Position
As of September 30, 2024, Eaton held total debt of $8.678 billion with a short-term debt of $3 million. The company maintains a robust liquidity position, with cash and short-term investments totaling $1.994 billion.
| Debt and Liquidity Metric | Amount |
|---|---|
| Total Debt | $8.678 billion |
| Short-term Debt | $3 million |
| Cash and Short-term Investments | $1.994 billion |
Strategic Acquisitions
In 2024, Eaton expanded its portfolio through strategic acquisitions, including:
- Acquisition of Exertherm, a provider of thermal monitoring solutions for electrical equipment, for $50 million.
- Acquisition of a 49% stake in NordicEPOD AS, specializing in power modules for data centers.
Restructuring Initiatives
Eaton initiated a multi-year restructuring program aimed at optimizing operations, with charges of $132 million reported in the first nine months of 2024. The total estimated charges for this program are projected to be $375 million, with expected benefits of $325 million upon completion.
Market Outlook
The company anticipates continued growth driven by increasing demand for sustainable energy solutions and power management technologies. Eaton's backlog reached approximately $15.9 billion as of September 30, 2024, with 71% of this backlog expected to be delivered within the next twelve months.
| Backlog Overview | Amount |
|---|---|
| Total Backlog | $15.9 billion |
| Backlog Targeted for Next 12 Months | 71% |
A Who Owns Eaton Corporation plc (ETN)
Shareholder Structure
As of 2024, Eaton Corporation plc (ETN) has a diverse shareholder base, including institutional investors, mutual funds, and individual shareholders. The top shareholders are as follows:
| Shareholder | Ownership Percentage | Shares Owned (in millions) |
|---|---|---|
| The Vanguard Group, Inc. | 8.12% | 32.32 |
| BlackRock, Inc. | 7.58% | 30.08 |
| State Street Corporation | 4.01% | 16.04 |
| Wellington Management Group LLP | 3.57% | 14.28 |
| Invesco Ltd. | 3.21% | 12.84 |
| Other Institutional Investors | 32.50% | 130.00 |
| Individual Shareholders | 37.00% | 148.00 |
Recent Shareholder Changes
In the last year, Eaton Corporation has seen significant transactions involving its shares:
- In 2024, Eaton repurchased approximately 5.3 million shares at a total cost of $1.629 billion.
- The average price paid per share during the repurchase was approximately $298.75.
- As of September 30, 2024, the total number of ordinary shares outstanding was approximately 398.1 million.
Financial Performance Indicators
The financial performance of Eaton Corporation has shown substantial growth in 2024:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $6,345 million | $5,880 million | 7.9% |
| Net Income | $1,011 million | $892 million | 13.4% |
| Net Income per Share (Diluted) | $2.53 | $2.22 | 14.0% |
| Cash Dividends Declared per Share | $0.94 | $0.86 | 9.3% |
Market Capitalization and Stock Performance
As of September 30, 2024, Eaton Corporation's market capitalization stands at approximately $100.7 billion, reflecting robust investor confidence and positive market sentiment.
The stock performance has been strong, with a year-to-date increase of approximately 22% as of Q3 2024.
Institutional Ownership Trends
Institutional ownership has grown, with major firms continuing to increase their stakes in Eaton Corporation:
- The Vanguard Group increased their holdings by 1.5% in the past quarter.
- BlackRock reported a 2% increase in their share count.
- State Street Corporation's ownership has remained steady.
Conclusion on Ownership Dynamics
The ownership dynamics of Eaton Corporation plc reflect a stable and diversified shareholder base with significant institutional involvement, indicating confidence in the company's strategic direction and operational performance.
Eaton Corporation plc (ETN) Mission Statement
Mission Statement Overview
Eaton Corporation plc aims to improve the quality of life and the environment through the use of power management technologies and services. The company is committed to innovation, sustainability, and efficiency in its operations and product offerings.
Core Values
- Integrity: Conducting business in a responsible manner.
- Customer Focus: Delivering solutions that meet customer needs.
- Innovation: Driving technological advancements in power management.
- Sustainability: Promoting environmental stewardship and resource efficiency.
Financial Performance Metrics
As of 2024, Eaton has shown significant growth across various financial metrics, reflecting its commitment to operational excellence and market expansion.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $6,345 million | $5,880 million | 8% |
| Gross Profit | $2,446 million | $2,196 million | 11% |
| Net Income | $1,011 million | $892 million | 13% |
| Adjusted Earnings per Share | $2.84 | $2.47 | 15% |
| Operating Margin | 24.4% | 24.1% | 1.2% |
Strategic Goals
Eaton's strategic goals include:
- Enhancing operational efficiency to achieve higher margins.
- Expanding market share in emerging markets.
- Investing in research and development for innovative solutions.
- Achieving sustainability targets by reducing carbon footprint.
Recent Initiatives
In 2024, Eaton has implemented several initiatives aimed at enhancing its operational capabilities:
- Initiated a multi-year restructuring program with expected charges of $375 million, aiming for $325 million in annual benefits upon completion.
- Increased capital expenditures to approximately $800 million to expand production capacity.
- Strengthened cash flow management, with net cash provided by operating activities amounting to $2,730 million in the first nine months of 2024.
Market Position
Eaton maintains a robust market position across multiple segments, including Electrical Americas, Electrical Global, Aerospace, Vehicle, and eMobility. The company reported a total backlog of approximately $15.9 billion as of September 30, 2024, indicating strong future demand.
| Business Segment | Net Sales Q3 2024 | Net Sales Q3 2023 | Change (%) |
|---|---|---|---|
| Electrical Americas | $2,963 million | $2,594 million | 14% |
| Electrical Global | $1,573 million | $1,503 million | 5% |
| Aerospace | $946 million | $867 million | 9% |
| Vehicle | $696 million | $753 million | (7%) |
| eMobility | $167 million | $163 million | 2% |
Conclusion
In 2024, Eaton Corporation plc continues to position itself as a leader in power management solutions, committed to delivering sustainable and innovative products while enhancing financial performance.
How Eaton Corporation plc (ETN) Works
Business Overview
Eaton Corporation plc operates through five primary business segments: Electrical Americas, Electrical Global, Aerospace, Vehicle, and eMobility. The company specializes in power management solutions that help customers manage electrical, hydraulic, and mechanical power more efficiently, safely, and sustainably.
Financial Performance
For the third quarter of 2024, Eaton reported net sales of $6.345 billion, an increase of 8% compared to $5.880 billion in Q3 2023. For the first nine months of 2024, net sales reached $18.638 billion, up from $17.229 billion in the same period of the previous year, also reflecting an 8% increase.
| Metrics | Q3 2024 | Q3 2023 | Change | 9M 2024 | 9M 2023 | Change |
|---|---|---|---|---|---|---|
| Net Sales (in billions) | $6.345 | $5.880 | +8% | $18.638 | $17.229 | +8% |
| Net Income (in millions) | $1,011 | $892 | +13% | $2,827 | $2,277 | +24% |
| Earnings per Share (diluted) | $2.53 | $2.22 | +14% | $7.05 | $5.67 | +24% |
| Operating Profit (in millions) | $1,204 | $1,079 | +12% | $3,399 | $2,739 | +24% |
Segment Performance
Eaton's performance varies significantly across its segments, with Electrical Americas showing substantial growth.
| Segment | Net Sales (Q3 2024, in millions) | Net Sales (Q3 2023, in millions) | Operating Profit (Q3 2024, in millions) | Operating Profit (Q3 2023, in millions) |
|---|---|---|---|---|
| Electrical Americas | $2,963 | $2,594 | $892 | $719 |
| Electrical Global | $1,573 | $1,503 | $294 | $328 |
| Aerospace | $946 | $867 | $230 | $209 |
| Vehicle | $696 | $753 | $135 | $131 |
| eMobility | $167 | $163 | ($7) | $0 |
Cash Flow and Capital Expenditures
Net cash provided by operating activities for the first nine months of 2024 amounted to $2.730 billion, compared to $2.326 billion in 2023, showing an increase of $404 million. Capital expenditures for the same period were $553 million, with expectations to reach approximately $800 million in 2024.
Debt and Financing
As of September 30, 2024, Eaton's total debt comprised $8.678 billion in long-term debt and $3 million in short-term debt. The company maintains a revolving credit facility totaling $3 billion, with no outstanding borrowings as of the same date.
| Debt Type | Amount (in billions) |
|---|---|
| Long-term Debt | $8.678 |
| Short-term Debt | $0.003 |
| Revolving Credit Facility | $3.000 |
Restructuring and Corporate Expenses
Eaton has initiated a multi-year restructuring program expected to yield benefits of $325 million upon completion. Restructuring charges incurred amounted to $132 million in the first nine months of 2024.
| Expense Type | Amount (in millions) |
|---|---|
| Restructuring Charges (2024) | $132 |
| Total Corporate Expense | $1,018 |
How Eaton Corporation plc (ETN) Makes Money
Overview of Business Segments
Eaton Corporation operates through multiple business segments, primarily focusing on electrical, aerospace, vehicle, and eMobility markets. The financial performance of these segments as of 2024 illustrates their contributions to the overall revenue.
| Business Segment | Net Sales (Q3 2024) | Net Sales (Q3 2023) | Operating Profit (Q3 2024) | Operating Profit (Q3 2023) | Operating Margin (Q3 2024) | Operating Margin (Q3 2023) |
|---|---|---|---|---|---|---|
| Electrical Americas | $2,963 million | $2,594 million | $892 million | $719 million | 30.1% | 27.7% |
| Electrical Global | $1,573 million | $1,503 million | $294 million | $328 million | 18.7% | 21.8% |
| Aerospace | $946 million | $867 million | $230 million | $209 million | 24.4% | 24.1% |
| Vehicle | $696 million | $753 million | $135 million | $131 million | 19.4% | 17.4% |
| eMobility | $167 million | $163 million | ($7 million) | $0 million | (4.4%) | 0% |
| Total | $6,345 million | $5,880 million | $1,544 million | $1,386 million | 24.3% | 23.6% |
Revenue Sources
The majority of Eaton's revenue is derived from its Electrical Americas segment, which reported net sales of $2,963 million in Q3 2024, reflecting a 14% increase from the same period in 2023. The segment's operating profit rose by 24% to $892 million, with an operating margin of 30.1%.
The Electrical Global segment also showed growth, achieving net sales of $1,573 million, up 5% year-over-year, although its operating profit declined by 10% to $294 million due to increased costs.
Aerospace segment revenues increased by 9% to $946 million, with a consistent operating margin of 24.4%. In contrast, the Vehicle segment experienced a decline in net sales to $696 million, down 7%, but improved its operating margin to 19.4%.
The eMobility segment, despite growing sales to $167 million, reported an operating loss of $7 million, indicating challenges in achieving profitability amid OEM delays and market fluctuations.
Financial Performance Metrics
Eaton's overall net income for Q3 2024 was reported at $1,011 million, a 13% increase compared to $892 million in Q3 2023. The net income attributable to Eaton's ordinary shareholders also showed improvement, reaching $1,009 million, with diluted earnings per share increasing to $2.53 from $2.22.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $1,011 million | $892 million |
| Net Income Attributable to Ordinary Shareholders | $1,009 million | $891 million |
| Diluted Earnings per Share | $2.53 | $2.22 |
| Gross Profit Margin | 38.6% | 37.3% |
| Operating Profit Margin | 24.3% | 23.6% |
Market Trends and Strategic Initiatives
Eaton is strategically positioned to capitalize on the megatrends of electrification, energy transition, and digitalization. The company’s investments in clean energy initiatives and infrastructure are anticipated to drive future growth. Additionally, the restructuring program initiated in early 2024 aims to optimize operations and align functions for anticipated growth, expected to incur total charges of approximately $375 million by completion in 2026.
Backlog and Future Outlook
As of September 30, 2024, Eaton reported a total backlog of approximately $15.9 billion, with about 71% targeted for delivery within the next twelve months. This backlog reflects strong demand across its business segments, particularly in Electrical Americas and Aerospace, indicating a positive outlook for future revenue generation.
Eaton Corporation plc (ETN) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- Eaton Corporation plc (ETN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Eaton Corporation plc (ETN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Eaton Corporation plc (ETN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.