Eaton Corporation plc Q1 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q1 adjusted EPS was $1.44, up 15% year-over-year and 18% above the midpoint of prior guidance.
  • Revenue was $4.7 billion, up 0.5% organically compared to prior-year Q1, well above guidance of down 3%.
  • Record segment margin of 17.7%, with strong cost execution and restructuring benefits.
  • Adjusted operating cash flow increased 42%; adjusted free cash flow rose 62% versus Q1 2020.
  • Closed three M&A deals: Green Motion (EV charging), Hanyu (low-cost circuit breakers/contactors), and a 50% stake in YiNeng (busway systems).
  • Progress continuing on closing Cobham Mission Systems acquisition and Hydraulics divestiture.

Business Segment Highlights

Electrical Americas

  • Organic revenue up 2% versus prior year.
  • Segment margin rose 330 bps to 20.5%, a record; driven by cost actions and Lighting divestiture mix benefits.
  • Orders up 11%; backlog up 23% year-over-year due to data center and residential strength.

Electrical Global

  • Organic sales up 5%; currency tailwind of 5%.
  • Margins reached 17%, up 250 bps year-over-year.
  • Orders up 7%; backlog up 17% versus last year.

Hydraulics

  • Revenue up 11% (9% organic); strong demand in mobile equipment.
  • Margins improved 420 bps to 15%.

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Operator: Ladies and gentlemen, thank you for standing by. Welcome to Eaton's First Quarter Earnings Call. At this time, all participants are in a listen-only mode and later we'll conduct a question-and-answer session. [Operator Instructions] As a reminder, today's conference is being recorded. And I would now like to turn the conference over to our host, Eaton's Senior Vice President of Investor Relations, Mr. Yan Jin. Please go ahead. Yan Jin: Good morning, guys. Thank you all for joining us for Eaton first quarter 2021 earnings call. With me today are Craig Arnold, our Chairman and CEO; and Tom Okray, Executive Vice President and Chief Financial Officer. Our agenda today, including opening remarks by Craig highlighting the Company's performance in the first quarter. As we have done on our past calls, we'll be taking questions at end of Craig's comments. The press release and the presentation we'll go through today have been posted on our website at www.eaton.com. This presentation, including adjusted earnings per share, adjusted free cash flow and other non-GAAP measures that are reconciled in the appendix. A webcast of this call is accessible on our website and will be available for replay. I would like to remind you that our comments today will include statements related to the expected future results of the Company and are therefore forward-looking statements. Our actual results may differ materially from our forecasted projection due to a wide range of the risk and unc

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