The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Eaton met expectations on revenues and whiffed on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP earnings per share dropped significantly.
Margins shrank across the board.
Eaton reported revenue of $4.33 billion. The 14 analysts polled by S&P Capital IQ expected to see net sales of $4.36 billion on the same basis. GAAP reported sales were 7.4% higher than the prior-year quarter's $4.03 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.82. The 15 earnings estimates compiled by S&P Capital IQ predicted $0.95 per share. GAAP EPS of $0.46 for Q4 were 57% lower than the prior-year quarter's $1.07 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 27.7%, 200 basis points worse than the prior-year quarter. Operating margin was 6.2%, 350 basis points worse than the prior-year quarter. Net margin was 4.1%, 490 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $5.44 billion. On the bottom line, the average EPS estimate is $0.80.
Next year's average estimate for revenue is $22.73 billion. The average EPS estimate is $4.37.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 853 members out of 874 rating the stock outperform, and 21 members rating it underperform. Among 279 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 277 give Eaton a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Eaton is outperform, with an average price target of $56.53.
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