Eaton(US:ETN)2025-11-04 18:08Financial Performance - Eaton Corporation reported revenues of nearly $25 billion for 2024, serving customers in over 160 countries[86]. - Net sales for the third quarter of 2025 reached $6,988 million, a 10% increase compared to $6,345 million in the same period of 2024[98]. - Adjusted earnings for the third quarter of 2025 were $1,199 million, reflecting a 6% increase from $1,132 million in the third quarter of 2024[98]. - The gross profit for the first nine months of 2025 was $7,719 million, a 9% increase from $7,074 million in the same period of 2024[98]. - Net income attributable to Eaton ordinary shareholders for Q3 2025 was $1,010 million, up from $1,009 million in Q3 2024, with diluted earnings per share increasing from $2.53 to $2.59[105]. - Net sales for the nine months ended September 30, 2025, totaled $12,087 million, with sales to non-issuer and non-guarantor subsidiaries amounting to $725 million[148]. - Cost of products sold for the same period was $8,458 million, leading to a net income of $900 million[148]. Segment Performance - Electrical Americas segment net sales increased by 15% to $3,410 million in Q3 2025, with operating profit rising 16% to $1,034 million[107]. - Electrical Global segment net sales grew by 10% to $1,724 million in Q3 2025, with operating profit increasing by 12% to $330 million[110]. - Aerospace segment net sales rose by 14% to $1,079 million in Q3 2025, with operating profit up 22% to $280 million[112]. - Vehicle segment net sales decreased by 8% to $639 million in Q3 2025, with operating profit declining 16% to $114 million[115]. - eMobility segment net sales fell by 19% to $136 million in Q3 2025, with an operating loss of $9 million compared to a loss of $7 million in Q3 2024[117]. Margins and Expenses - The gross profit margin decreased from 38.6% in Q3 2024 to 38.3% in Q3 2025, primarily due to higher commodity and wage inflation[101]. - The operating margin for Electrical Americas improved from 30.1% in Q3 2024 to 30.3% in Q3 2025, driven by higher sales and operational efficiencies[108]. - The operating margin for Aerospace increased from 24.4% in Q3 2024 to 25.9% in Q3 2025, influenced by higher sales despite inflationary pressures[113]. - The operating margin for Vehicle decreased from 19.4% in Q3 2024 to 17.8% in Q3 2025, primarily due to higher commodity and wage inflation[116]. - Total corporate expense increased from $340 million in Q3 2024 to $474 million in Q3 2025, and from $1,018 million in the first nine months of 2024 to $1,316 million in the first nine months of 2025, driven by higher Other expense - net, Interest expense - net, and Intangible asset amortization expense[119]. Cash Flow and Investments - Net cash provided by operating activities decreased by $223 million to $2,507 million in the first nine months of 2025 compared to $2,730 million in 2024, primarily due to working capital balances being $656 million higher[130]. - Net cash used in investing activities increased by $783 million to $783 million in the first nine months of 2025, largely due to an increase in cash paid for business acquisitions of $1,504 million compared to $50 million in 2024[131]. - Net cash used in financing activities decreased by $880 million to $1,812 million in the first nine months of 2025, influenced by net proceeds of short-term debt of $761 million compared to net payments of $6 million in 2024[132]. - Capital expenditures were $527 million in the first nine months of 2025, with plans to increase to approximately $900 million in 2025 to expand production capacity[133]. - Cash dividend payments increased to $1,222 million in the first nine months of 2025 from $1,130 million in 2024, with intentions to continue quarterly dividends[134]. - The company paid $1,504 million for business acquisitions in the first nine months of 2025, compared to $50 million in 2024, focusing on higher growth opportunities[136]. Debt and Liquidity - As of September 30, 2025, the company had short-term debt of $761 million and long-term debt of $8,756 million, with a belief in sufficient liquidity to meet scheduled payments[137]. - A new $3,000 million five-year revolving credit agreement was established on September 29, 2025, replacing previous agreements, with no borrowings outstanding at that date[122]. - The company repurchased 5.2 million ordinary shares at a total cost of $1,661 million in the first nine months of 2025 under its share repurchase programs[135]. Current Assets and Liabilities - Current assets as of September 30, 2025, are $4,307 million, down from $5,027 million on December 31, 2024, representing a decrease of approximately 14.3%[148]. - Current liabilities increased to $5,119 million as of September 30, 2025, compared to $3,738 million at the end of 2024, indicating a rise of approximately 37%[148]. - Noncurrent liabilities remained relatively stable, with a slight increase from $10,564 million at the end of 2024 to $10,749 million[148]. Strategic Outlook - The company anticipates future capital expenditures and potential share repurchases, reflecting ongoing strategic financial planning[149]. - Forward-looking statements highlight risks including supply chain disruptions and competitive pressures, which could impact future performance[149]. - There have been no material changes in market risk exposures since December 31, 2024, indicating stability in this area[150]. - The company is focused on integrating acquisitions and managing potential adverse impacts from legal and regulatory changes[149]. - Overall, the financial outlook remains cautious due to various external factors that could affect operations and market conditions[149].