The Gory Details on Eaton's Double Miss
Eaton (NYS: ETN) reported earnings on Jan. 26. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Eaton missed on revenues and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue increased, and GAAP earnings per share increased significantly.
Gross margins dropped, operating margins expanded, net margins expanded.
Eaton reported revenue of $4.03 billion. The 15 analysts polled by S&P Capital IQ expected revenue of $4.16 billion. Sales were 10% higher than the prior-year quarter's $3.66 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $1.08. The earnings estimates compiled by S&P Capital IQ averaged $1.11 per share on the same basis. GAAP EPS of $1.07 for Q4 were 31% higher than the prior-year quarter's $0.82 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 30.2%, 20 basis points worse than the prior-year quarter. Operating margin was 10.1%, 50 basis points better than the prior-year quarter. Net margin was 9.0%, 140 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $4.00 billion. On the bottom line, the average EPS estimate is $0.90.
Next year's average estimate for revenue is $17.05 billion. The average EPS estimate is $4.42.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 819 members out of 840 rating the stock outperform, and 21 members rating it underperform. Among 301 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 299 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 $52.42.
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At the time this article was published 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 ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.
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