Eaton Corporation plc Q1 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Record adjusted EPS of $1.62, up 13% from Q1 2021.
  • Sales of $4.8 billion, up 10% organically year-over-year and above guidance (7%–9%).
  • Record segment operating margins of 18.8%, up 110 bps year-over-year.
  • Backlog reached record levels across Electrical and Aerospace segments.
  • Strong demand across nearly all end markets including industrial, commercial, residential, and aerospace.

Business Segment Highlights

Electrical Americas

  • Revenue up 17%, including 10% organic growth (vs. 5% in Q4 2021).
  • Margins at 19.1%, down 140 bps due to inflation and supply chain inefficiencies.
  • Rolling 12-month orders up 31% (vs. 20% in Q4 2021).
  • Backlog up 86% organically, with a $1.3 billion sequential increase.

Electrical Global

  • Organic growth up 18% with 3% FX headwind.
  • Record Q1 operating margins of 19.4%; incremental margins of 36%.
  • Rolling 12-month orders up 27% (vs. 22% in Q4 2021).
  • Backlog increased more than 50% for the fourth consecutive quarter.

Aerospace

  • Revenue up 38%, including 15% organic growth and 25% from the Cobham acquisition.
  • Margins of 22.1%, up 360 bps year-over-year.
  • Orders up 35% on a rolling 12-month basis (vs. 19% at year-end).

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Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Eaton fourth quarter earnings call. [Operator Instructions]. I would now like to turn the conference over to our host, Senior Vice President of Investor Relations, Yan Jin. Please go ahead. Yan Jin: Okay. Good morning, guys. Thank you all for joining us for Eaton's Fourth Quarter 2022 Earning Calls. With me today are Craig Arnold, our Chairman and CEO; and Tom Okray, Executive Vice President and the Chief Financial Officer. Our agenda today, including opening remarks by Craig, highlighting the company's performance in the first quarter. As we have done in our past calls, we'll be taking questions at the end of Craig's comments. The press release and the presentation we'll go through today have been posted on our website. This presentation, including adjusted earning per share, adjusted free cash flow and other non-GAAP measures, they're 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 including statements related to expected future results of the company and are therefore forward-looking statements. Our actual results may differ materially from our projected -- forecasted projections due to a wide range of risks and uncertainties that are described in our earnings release and presentation. With that, I will turn it over to Craig. Craig Arnold: Thanks, Yan. And we'll start on Page 3 wi

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