Eaton Corporation plc Q3 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Record adjusted EPS of $1.75, an all-time high. This compares favorably to Q3 2020, representing a substantial year-over-year increase.
  • Revenue grew 8% despite significant supply chain pressures (notably within Electrical Americas). Organic revenue growth was 1% and the rest driven by acquisitions.
  • Record segment margins of 19.9%, up 230 bps from Q3 2020 and above guidance (19–19.4%).
  • Incremental margins were strong at 46%, aided by restructuring savings, portfolio changes, pricing, and mix.
  • Backlog reached record levels, above 50% year-over-year, underscoring strong demand and deferred shipments from supply constraints.

Business Segment Performance

Electrical Americas

  • Total revenue up 9% (organic +1%, Tripp Lite acquisition +8%).
  • Growth driven by data centers and residential; weakness in large industrial and utilities.
  • Margins at 21.7%, up 40 bps sequentially.
  • Severe supply chain issues from unique suppliers held back growth; estimated revenue impact around $130M in shippable backlog.
  • Orders up 17% on a rolling 12-month basis; backlog up more than 50% year-over-year and 9% sequentially.

Electrical Global

  • Organic revenue up 18%, plus 1% currency tailwind.

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Operator: Ladies and gentlemen, thank you for standing by and welcome to the Eaton Third Quarter 2021 earnings call. At this time, all participants are in a listen-only mode. Later we will conduct the question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. 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 : Good morning, guys. I'm Yan Jin, Eaton Senior Vice President of Investor Relations. Thank you all for joining us for Eaton's Third Quarter 2021 Earning Call. With me today are Craig Arnold, our Chairman and CEO, and Tom Okray, Executive Vice President and Chief Financial Officer. Our agenda today includes opening remarks by Craig, highlighting the Company's performance in the third quarter. As we have done our past calls, we'll be taking questions at the end of the Craig 's comments. The price release and presentation we will go through today have been posted on our website @www. eaton.com. This presentation, including the adjusted earnings per share, adjusted and free cash flow, and other non - GAAP measures. There are recon sales in the appendix. An EV cost of this call is accessible on our website and it will be available for replay. I would like to remind you that our comments today will including statements related to the expected future results of the Company and are therefore forward-looking statements. Our actual results may differ m

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