Eaton Corporation (ETN) Q4 2024 earnings summary

Executive summary

• Achieved record Q4 and full-year 2024 results, with adjusted EPS of $2.83 (up 11% YoY) and full-year adjusted EPS of $10.80 (up 18%), driven by strong demand, robust backlogs, and segment margin expansion to 24.7% in Q4.

• Data center business and megaprojects remain key growth drivers, with data center backlog up 50% YoY and megaproject backlog in North America reaching $1.9T, up 33–40% YoY.

• Entering 2025 with strong order momentum, supported by secular megatrends such as electrification, digitalization, and infrastructure spending.

• Backlogs reached new highs: Electrical Americas up 29%, Aerospace up 16%, and total backlog at $15.5B.

• Negative impacts from Hurricane Helene and aerospace labor strikes reduced Q4 sales by $80M.

Financial highlights

• Q4 sales reached $6.24B, up 6% organically (5% including FX headwind); segment operating profit grew 13% to $1.54B.

• Q4 segment margins reached a record 24.7%, up 190 bps YoY; full-year segment margins at 24.0%, up 200 bps.

• Q4 operating cash flow was $1.6B and free cash flow $1.3B, up 23% and 27% YoY; full-year operating cash flow was $4.3B and free cash flow $3.5B.

• Q4 net income attributable to shareholders was $971M; full-year net income was $3.79B.

• Full-year 2024: 8% organic growth, 18% increase in adjusted EPS, record margins of 24%, and 23% increase in free cash flow, all above initial guidance.

Outlook and guidance

• 2025 organic growth expected at 7–9%, with Electrical Americas at 11.5% at the midpoint; segment margins forecasted at 24.4–24.8%.

• 2025 adjusted EPS guidance: $11.80–$12.20 (up 11% at midpoint); free cash flow guidance: $3.7–$4.1B; share repurchases planned at $2.0–$2.4B.

• Q1 2025 organic growth expected at 5.5–7.5%; segment margins 23.7–24.1%; adjusted EPS $2.65–$2.75.

• 85% of end markets expected to grow in 2025, with double-digit growth in data center, distributed IT, commercial aerospace, and electric vehicles.