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    Eaton Corporation PLC (ETN)

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    Business Description

    Eaton Corporation plc is an intelligent power management company that operates across several key business segments, providing a wide range of products for markets including data centers, utilities, industrial, commercial, machine building, residential, aerospace, and mobility . In 2023, Eaton reported revenues of $23.2 billion, serving customers in over 160 countries . The company's business strategy is aligned with global trends such as electrification, energy transition, and digitalization, positioning it for growth in these expanding markets .

    1. Electrical Americas - Focuses on electrical components, systems, and services, including power distribution, circuit protection, and lighting products.
    2. Electrical Global - Provides electrical components, systems, and services similar to Electrical Americas, serving a global market.
    3. Aerospace - Supplies systems for commercial and military use, contributing significantly to the aerospace industry.
    4. Vehicle - Includes drivetrain and powertrain systems, catering to the automotive sector.
    5. eMobility - Focuses on electrical components for vehicles, supporting the transition to electric mobility.

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Craig ArnoldChairman and Chief Executive OfficerJune 1, 2016Craig Arnold joined Eaton in 2000 and has been a director since September 1, 2015. He became Chairman and CEO on June 1, 2016 .
    Olivier LeonettiExecutive Vice President and Chief Financial OfficerFebruary 2024Olivier Leonetti joined Eaton in February 2024. He previously served as CFO of Johnson Controls International plc and Zebra Technologies Corporation .
    Heath B. MonesmithPresident and Chief Operating Officer - Electrical SectorJuly 5, 2022Heath B. Monesmith has been with Eaton since 2017, serving in various roles including President and COO of the Industrial Sector before his current position .
    Paulo RuizPresident and Chief Operating Officer - Industrial SectorJuly 5, 2022Paulo Ruiz joined Eaton in 2019 and has held various leadership roles, including President of Energy Solutions and Services .
    Taras G. Szmagala, Jr.Executive Vice President and Chief Legal OfficerJune 24, 2022Taras G. Szmagala, Jr. has been with Eaton since 2017, previously serving as Senior Vice President of Public and Community Affairs and Corporate Communications .
    Ernest W. Marshall, Jr.Executive Vice President and Chief Human Resources OfficerJuly 1, 2018Ernest W. Marshall, Jr. has been with Eaton since July 1, 2018, serving as the Chief Human Resources Officer .
    Daniel R. HopgoodSenior Vice President and ControllerApril 1, 2021Daniel R. Hopgood has been with Eaton since 2017, previously serving as Senior Vice President of Global Financial Services and Systems .
    Peter DenkPresident - Mobility GroupApril 1, 2023Peter Denk has been with Eaton since 2018, previously serving as President - Vehicle Group, North America .
    Nandakumar CheruvatathPresident - Aerospace GroupSeptember 1, 2015Nandakumar Cheruvatath has been with Eaton since September 1, 2015, serving as President of the Aerospace Group .
    Mike YeltonPresident - Americas Region, Electrical SectorApril 1, 2023Mike Yelton has been with Eaton since 2019, previously serving in various leadership roles within the Electrical Sector .
    Gregory R. PageNon-Executive Chair of the Eaton Board of Directors (effective June 1, 2025)June 1, 2025 Gregory R. Page has been a director of Eaton since 2003 and was elected Lead Director in 2022. He is also a director of 3M and Deere & Company and serves as non-executive chairman of Corteva, Inc. .

    Questions to Ask Management

    1. Given that only 16% of the announced mega projects have started and cancellations, though modest, are at 10%, how confident are you that the remaining projects will proceed as planned, and what contingency plans do you have if they do not?

    2. With the significant $1.5 billion investment in capacity, particularly in electrical products, can you elaborate on the potential risks of overcapacity if market demand slows, and how will this impact your return on invested capital?

    3. Your Electrical Global margins lag behind those of Electrical Americas. Beyond restructuring efforts, what specific strategies are you implementing to drive growth and margin improvement in Europe, especially given the current market challenges there?

    4. Given the growing backlog in your Electrical segment, are there risks of Eaton becoming a bottleneck in the industry, and how are you addressing potential capacity constraints and lead times to ensure timely delivery to your customers?

    5. With pricing moderation expected and historical pricing patterns returning, how confident are you in maintaining margin expansion in 2025, especially if input costs rise or market competition intensifies?

    Share Repurchase Program

    Program DetailsProgram 1Program 2
    Approval DateFebruary 27, 2019 February 23, 2022
    End Date/DurationN/AThree-year period commencing on February 23, 2022
    Total Additional Amount$5.0 billion $5.0 billion
    Remaining AuthorizationN/A$3,086 million as of the end of September 2024
    DetailsRenewed in 2022Repurchases depend on market conditions, market price, capital levels, and other considerations

    Debt Maturity Schedule

    YearAmount Due (Millions)Debt TypeInterest Rate (%)% of Total Debt
    20243 Short-term debtN/A0.03% = (3 / 9,395) * 100
    2024714 Current portion of long-term debtN/A7.6% = (714 / 9,395) * 100
    20311,084 Euro Notes3.601 11.5% = (1,084 / 9,395) * 100
    20361,084 Euro Notes3.802 11.5% = (1,084 / 9,395) * 100

    Auditor

    NameStart DateEnd DateReason for Change
    Ernst & Young LLP1923 PresentCurrent auditor

    Latest news

    Recent developments and announcements about ETN.

    Financial Reporting

      Earnings Report

      ·
      5 days ago

      Eaton Corporation plc (ETN) has released its fourth-quarter 2024 earnings results, showcasing record-breaking performance and providing guidance for 2025.

      Key Highlights from Q4 2024 Results:

      • Earnings per Share (EPS):

        • Reported EPS: $2.45, a record for the fourth quarter, up 4% from Q4 2023.
        • Adjusted EPS: $2.83, another record, up 11% from Q4 2023.

      • Revenue:

        • Total sales: $6.2 billion, a record for the fourth quarter, up 5% year-over-year.
        • Organic sales growth: 6%, partially offset by a 1% negative currency translation.

      • Segment Margins:

        • Record segment margins of 24.7%, a 190-basis point improvement over Q4 2023.

      • Cash Flow:

        • Operating cash flow: $1.6 billion, up 23% year-over-year.
        • Free cash flow: $1.3 billion, up 27% year-over-year.

      • Backlog and Orders:

        • Electrical segment backlog grew 27% organically, while Aerospace backlog increased 16% organically compared to December 2023.
        • Electrical Americas orders grew 16% organically, with a book-to-bill ratio of 1.2 on a rolling twelve-month basis.

      Full-Year 2024 Performance:

      • Revenue: $24.9 billion, up 7% year-over-year, with 8% organic growth.
      • EPS:
        • Reported EPS: $9.50, up 18% from 2023.
        • Adjusted EPS: $10.80, up 18% from 2023.
      • Segment Margins: Record 24.0%, a 200-basis point improvement over 2023.
      • Cash Flow:
        • Operating cash flow: $4.3 billion, up 19% year-over-year.
        • Free cash flow: $3.5 billion, up 23% year-over-year.

      2025 Guidance:

      • Organic Growth: Expected to be 7-9%.
      • Segment Margins: Projected at 24.4-24.8%.
      • EPS:
        • Reported EPS: $10.60-$11.00, up 14% at the midpoint compared to 2024.
        • Adjusted EPS: $11.80-$12.20, up 11% at the midpoint compared to 2024.

      Significant Trends and Insights:

      • Strong Market Activity: Eaton continues to experience robust demand across its segments, with record orders and backlog growth in Electrical and Aerospace businesses.
      • Operational Efficiency: Record segment margins and cash flow reflect Eaton's focus on operational excellence and cost management.
      • Restructuring Program: Eaton's ongoing multi-year restructuring program is expected to deliver mature-year benefits of $375 million by 2026.

      Conclusion:

      Eaton's record-breaking performance in Q4 2024 and its optimistic guidance for 2025 highlight the company's strong market position and ability to capitalize on growth opportunities. The focus on electrification and digitalization, coupled with operational efficiencies, positions Eaton for continued success in the coming year.

      Source Citations: , , , , ,