Eaton Tops Q2 Consensus, Raises FY23 EPS Outlook

Eaton Corp PLC ETN Q2 FY23 net sales jumped 13% Y/Y to $5.87 billion, beating the consensus of $5.74 billion.

Adjusted EPS improved 18% Y/Y to $2.21, beating the consensus of $2.11.

Sales by segments: Electrical Americas $2.5 billion (+19% Y/Y), Electrical Global $1.6 billion (+5% Y/Y), Aerospace $848 million (+14% Y/Y), Vehicle $751 million (+6% Y/Y) and eMobility $161 million (+18% Y/Y).

Eaton's operating cash flow in the second quarter was $851 million, and free cash flow was $691 million.

Total segment operating profit increased to $1.26 billion from $1.05 billion a year ago, and the margin expanded by 150 bps to 21.6%.

"Achieving quarterly record adjusted earnings marked the end of a very strong first half of the year. Demand across our markets continues to be strong, propelling backlogs to record levels. We're confident we can achieve our increased guidance for the year and that we remain well positioned to capitalize on reindustrialization in North America and Europe as well as the secular growth drivers of electrification, energy transition and digitalization," said Craig Arnold, chairman and CEO.

Q3 2023 Outlook: Eaton anticipates organic revenue growth of 9%-11% and adjusted EPS of $2.27-$2.37, versus the consensus of $2.24. 

2023 Outlook: Eaton increased the outlook for FY23 adjusted EPS to $8.65-$8.85 (from $8.30-$8.50 earlier) versus the consensus of $8.45. 

Price Action: ETN shares are trading higher by 1.60% at $208.60 premarket on the last check Tuesday.