The 10-second takeaway
For the quarter ended March 31 (Q1), Eaton missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share dropped. GAAP earnings per share dropped.
Margins dropped across the board.
Eaton booked revenue of $5.31 billion. The 17 analysts polled by S&P Capital IQ foresaw revenue of $5.42 billion on the same basis. GAAP reported sales were 34% higher than the prior-year quarter's $3.96 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 $0.84. The 23 earnings estimates compiled by S&P Capital IQ forecast $0.79 per share. Non-GAAP EPS of $0.84 for Q1 were 8.7% lower than the prior-year quarter's $0.92 per share. GAAP EPS of $0.79 for Q1 were 13% lower than the prior-year quarter's $0.91 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 29.7%, 80 basis points worse than the prior-year quarter. Operating margin was 8.8%, 130 basis points worse than the prior-year quarter. Net margin was 7.1%, 80 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $5.76 billion. On the bottom line, the average EPS estimate is $1.12.
Next year's average estimate for revenue is $22.76 billion. The average EPS estimate is $4.35.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 847 members out of 869 rating the stock outperform, and 22 members rating it underperform. Among 242 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 240 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 $67.33.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.