Eaton's Earnings Beat Last Year's by 19%

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Eaton (NYSE: ETN) reported earnings on July 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Eaton missed estimates on revenue and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted slightly and GAAP earnings per share grew significantly.

Margins increased across the board.

Revenue details
Eaton tallied revenue of $4.07 billion. The 12 analysts polled by S&P Capital IQ expected revenue of $4.23 billion on the same basis. GAAP reported sales were 0.5% lower than the prior-year quarter's $4.09 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.15. The 17 earnings estimates compiled by S&P Capital IQ predicted $1.09 per share. GAAP EPS of $1.12 for Q2 were 15% higher than the prior-year quarter's $0.97 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 30.8%, 80 basis points better than the prior-year quarter. Operating margin was 11.2%, 90 basis points better than the prior-year quarter. Net margin was 9.4%, 120 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $4.29 billion. On the bottom line, the average EPS estimate is $1.15.

Next year's average estimate for revenue is $16.70 billion. The average EPS estimate is $4.36.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 867 members out of 887 rating the stock outperform, and 20 members rating it underperform. Among 232 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 231 give Eaton a green thumbs-up, and one gives 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 $55.50.

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