Eaton(ETN) - 2024 Q3 - Quarterly Results

Financial Performance - Third quarter earnings per share were $2.53, up 14% from Q3 2023, with record adjusted earnings per share of $2.84, up 15%[1] - Sales for the quarter reached $6.3 billion, an 8% increase from Q3 2023, driven entirely by organic sales growth[2] - Operating cash flow was $1.3 billion and free cash flow was $1.1 billion, both quarterly records, up 15% and 23% respectively from the same period in 2023[3] - The company raised full year 2024 earnings per share guidance to between $9.47 and $9.53, representing an 18% increase at the midpoint over the prior year[4] - Total net sales for the three months ended September 30, 2024, were $6,345 million, a 7.9% increase from $5,880 million in the same period last year[20] - Net income attributable to Eaton ordinary shareholders for the three months ended September 30, 2024, was $1,009 million, up 13.3% from $891 million in the prior year[20] - Free cash flow for the three months ended September 30, 2024, was $1,126 million, compared to $913 million in the same period last year[28] - Adjusted earnings per ordinary share for the year ending December 31, 2024, are projected to be between $10.75 and $10.81[26] Segment Performance - Electrical Americas segment sales were a record $3.0 billion, up 14% from Q3 2023, with operating profits of $892 million, up 24%[5] - Aerospace segment sales reached a record $946 million, up 9% from Q3 2023, with operating profits of $230 million, up 10%[8] - The Electrical Americas segment reported net sales of $2,963 million, a 14.2% increase compared to $2,594 million in the same quarter last year[20] - The Aerospace segment achieved an operating profit of $230 million, reflecting a 10.1% increase from $209 million in the same period last year[20] - The Electrical Global segment reported net sales of $1,573 million, a 4.6% increase from $1,503 million in the same quarter last year[20] - The Vehicle segment reported sales of $696 million, down 7% from Q3 2023, but operating margins improved to a record 19.4%, up 200 basis points[10] - The eMobility segment recorded sales of $167 million, up 2% from Q3 2023, but incurred an operating loss of $7 million due to launch costs[11] Orders and Backlog - The twelve-month rolling average of orders in the third quarter was up 16% organically, with backlog growth of 26% over September 2023[6] - For Q4 2024, the company anticipates organic growth of 6-7% and adjusted earnings per share between $2.78 and $2.84[5] Restructuring and Charges - Eaton incurred total restructuring charges of $382 million since the inception of its multi-year restructuring program, with expected mature year benefits of $265 million by the end of 2024[33] - In Q3 2024, Eaton reported restructuring charges of $54 million, with total charges for the first nine months of 2024 amounting to $132 million[34] - The new multi-year restructuring program is expected to incur additional expenses of $243 million, resulting in total estimated charges of $375 million for the entire program, with anticipated mature year benefits of $325 million[33] - The company recognized a total of $199 million in expenses for workforce reductions and $184 million for plant closing and other costs since the start of the restructuring program[33] - The restructuring program is expected to be completed by 2026, aligning the company's functions to support anticipated growth[33] - Total charges related to workforce reductions in Q3 2024 were $10 million, with total charges for the first nine months of 2024 amounting to $78 million[34] - The company reported a diluted per ordinary share charge of $0.11 for restructuring in Q3 2024, compared to $0.01 in Q3 2023[34] Assets and Liabilities - Eaton's total assets increased to $39,236 million as of September 30, 2024, up from $38,432 million at the end of December 2023[22] - The company’s long-term debt increased to $8,678 million as of September 30, 2024, compared to $8,244 million at the end of December 2023[22] Acquisitions - The company acquired a 49% stake in NordicEPOD AS on May 31, 2024, enhancing its position in the data center power solutions market[29] - Acquisition integration and divestiture charges in 2024 included a reduction in fair value of contingent future consideration from the Green Motion SA acquisition[32] - Total charges after income taxes for acquisition integration and divestiture were $14 million in Q3 2024, compared to $54 million in Q3 2023[32]