Eaton Corporation plc reported its fourth-quarter earnings for 2023, revealing a notable increase in financial performance. The company announced an adjusted earnings per share of $2.55, up 24% from the same period in 2022, after accounting for various charges and income from acquisitions and divestitures.
Fourth-quarter sales reached $6 billion, an 11% increase from the previous year, driven by organic growth and a slight boost from foreign exchange. Segment margins improved to 22.8%, indicating a 200-basis point increase from the fourth quarter of 2022.
Operating cash flow for the quarter was $1.3 billion, with free cash flow at $1.1 billion, both marking significant increases from the year before.
For the full year, Eaton’s sales were $23.2 billion, reflecting a 12% increase from 2022, attributed entirely to organic sales growth. The company’s segment margins reached 22.0%, showing a 180-basis point improvement over the previous year. Adjusted earnings per share for the year were $9.12, a 20% increase from 2022.
Looking forward, Eaton expects organic growth of 6.5-8.5% for 2024, with adjusted earnings per share projected to be between $9.95 and $10.35. For the first quarter of 2024, the company forecasts organic growth of 6-8% and adjusted earnings per share between $2.21 and $2.31.
In business segment performance, the Electrical Americas segment saw sales of $2.7 billion, up 16% from the fourth quarter of 2022, with operating profits reaching $763 million. The Electrical Global segment recorded $1.5 billion in sales, up 6% from the previous year. The Aerospace segment’s sales were $895 million, a 10% increase from the fourth quarter of 2022. The Vehicle segment reported sales of $723 million, up 2% from the previous year, while the eMobility segment saw a 19% increase in sales to $165 million.
Eaton’s chairman and chief executive officer, Craig Arnold, emphasized the company’s strong performance and the ongoing strength in their backlog, indicating robust demand. Arnold also highlighted a new $375 million multi-year restructuring program aimed at further improving efficiency and growth.
