Eaton Corporation plc Q4 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Adjusted EPS reached 1.72 dollars, a Q4 record and up from prior-year Q4 (1.28 dollars).
  • Sales were 4.8 billion dollars, up 6 percent organically versus Q4 2020. Total reported revenue rose 2 percent due to the sale of Hydraulics, which offset acquisition gains.
  • Segment margins were 19.3 percent, another Q4 record and above guidance.
  • Supply chain constraints and labor shortages, particularly tied to the Omicron variant, limited revenue conversion across Electrical Americas and Vehicle segments.
  • Company ended the year with record backlog across multiple segments. Electrical orders rose 21 percent and Aerospace orders rose 19 percent on a rolling 12‑month basis.

Segment Performance

Electrical Americas
  • Revenue up 13 percent (5 percent organic; 8 percent from Tripp Lite acquisition).
  • Strongest markets: residential, industrial, and data centers.
  • Margins of 19.2 percent, down 190 bps YoY due to higher input costs and inefficiencies from supply chain and labor issues.
  • Orders up 20 percent on a rolling 12‑month basis; backlog up 57 percent YoY.
Electrical Global
  • Organic revenue up 15 percent with strength across all regions.
  • Margins reached 19.5 percent, an all-time record, with incremental margins of 40 percent.

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Operator: Ladies and gentlemen, thank you for standing by and welcome to the Eaton Corporation Fourth Quarter Earnings Conference 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, Mr. Yan Jin. Please go ahead. Yan Jin: Good morning, everyone. I'm Yan Jin, Eaton's Senior Vice President of Investor Relations. Thank you all for joining us for Eaton's Fourth 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, including the opening remarks by Craig, highlighting the Company's performance in the fourth quarter. 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 includes the adjusted earnings per share, adjusted free cash flow and other non-GAAP measures. That's reconciled in the appendix. A webcast of this call is accessible on our website and will be available for replay. I will 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 projection due to a wide range of risks and

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