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Dec 31, 2020
Eaton Q4 2020 Earnings Report
Eaton's Q4 2020 performance was stronger than expected, with adjusted EPS of $1.28 and sales of $4.7 billion.
Key Takeaways
Eaton Corporation reported a stronger than expected fourth quarter with organic sales down 5 percent and adjusted earnings per share of $1.28. The company generated strong cash flow, with operating cash flow totaling $943 million and free cash flow totaling $845 million.
Earnings per share were $1.18 for the fourth quarter of 2020.
Adjusted earnings per share were $1.28 for the fourth quarter of 2020.
Sales in the fourth quarter of 2020 were $4.7 billion.
Full year free cash flow totaled $2.6 billion, at the top of guidance range.
Revenue by Segment
Forward Guidance
Eaton expects organic revenues to grow between 4 percent and 6 percent versus 2020, with growth in all segments. For full year 2021, we expect adjusted earnings per share to be between $5.40 and $5.80.
Positive Outlook
- Expect organic revenues to grow between 4% and 6% versus 2020
- Anticipate segment margins between 17.6% and 18.0%
- Adjusted earnings per share to be between $5.40 and $5.80 for full year 2021
- Expect growth in all segments
- Expect sequential growth trend to continue well into 2021 in vehicle markets
Challenges Ahead
- The divestitures of Hydraulics and Lighting businesses are expected to reduce sales by 8%
- Downturn in commercial aviation impacted aerospace segment sales
- Organic sales were down 5 percent
- The twelve-month rolling average of orders in the fourth quarter was down 6 percent, driven by declines in oil and gas and industrial markets in Electrical Global segment
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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