Eaton Corporation (ETN) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 adjusted EPS of $2.73, up 24% year-over-year, and record segment margins of 23.7%, up 210 basis points.

• Q2 sales reached $6.4 billion, up 8% year-over-year, with strong performance in electrical, aerospace, and data center markets.

• Robust demand and order growth in electrical and aerospace segments, with backlogs reaching new highs and supporting raised full-year guidance.

• Continued investment in capacity, including new campuses and strategic acquisitions such as Exertherm and a 49% stake in NordicEPOD AS.

• Growth driven by electrification, energy transition, reindustrialization, and digitalization megatrends.

Financial highlights

• Q2 2024 sales were $6.35 billion, up from $5.87 billion in Q2 2023; segment operating profit was $1.50 billion, up from $1.26 billion.

• Adjusted EPS was $2.73 (Q2 2024) vs. $2.21 (Q2 2023); net income attributable to shareholders was $993 million, up 33%.

• Operating cash flow for Q2 was $946 million (up 11%), and free cash flow was $759 million (up 10%).

• Gross profit margin improved to 38.0% from 36.1% year-over-year.

• 1.9 million shares repurchased in Q2 2024 for $600 million; $738 million repurchased year-to-date.

Outlook and guidance

• Raised 2024 organic growth guidance to 8%-9%; segment margin guidance to 23.5%-23.9%.

• Adjusted EPS for 2024 expected at $10.65-$10.75; free cash flow guidance at $3.4-$3.6 billion.

• Q3 2024 guidance: organic growth 8%-9%, segment margins 23.5%-23.9%, adjusted EPS $2.73-$2.83.

• Capital expenditures projected at $800 million for 2024 to support capacity expansion.

• Share repurchases for 2024 expected between $1.5 billion and $2.5 billion.