Eaton (ETN) Gears Up to Release Q2 Earnings: What’s in Store?

Eaton Corporation ETN is scheduled to report second-quarter 2023 earnings on Aug 1, before the opening bell. The power management company delivered an earnings surprise of 2.46% in the trailing four quarters, on average.

Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.

Factors to Note

Eaton’s widespread operation and strong performance of its organic assets are expected to have boosted earnings in the quarter. Megatrends and re-industrialization are driving large increases in capital investments and creating opportunities in most of Eaton’s end markets, which is expected to have been a positive impact on earnings.

Lower shares outstanding due to the systematic repurchase of shares are also expected to have boosted earnings.

Eaton’s second-quarter earnings are expected to have been impacted by negative currency translation and an increase in corporate expenses is likely to have offset some positives in the quarter.

Expectations

Eaton expects second-quarter earnings in the range of $2.04-$2.14 per share. It anticipates organic revenue growth of 10-12%. The segmental operating margin is expected to be 17-18% for the quarter. The Zacks Consensus Estimate for second-quarter earnings is pegged at $2.11 per share, indicating an improvement of 12.83% from the prior-year reported figure.

What Our Quantitative Model Predicts

Our proven model predicts an earnings beat for Eaton this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is the case here, as you will see below.

Eaton Corporation, PLC Price and EPS Surprise

Eaton Corporation, PLC price-eps-surprise | Eaton Corporation, PLC Quote

Earnings ESP: Eaton has an Earnings ESP of +0.38%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Eaton carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Investors can also consider the following players from the same sector that have the right combination of elements to beat on earnings in the upcoming release.

Rockwell Automation ROK is likely to come up with an earnings beat when it reports third-quarter fiscal 2023 results on Aug 1. It currently has an Earnings ESP of +0.09% and a Zacks Rank #2.

Rockwell Automation’s long-term (three- to five-year) earnings growth is projected at 11.33%. The Zacks Consensus Estimate for ROK’s fiscal 2023 earnings per share indicates year-over-year growth of 26.66%.

Terex Corporation TEX is likely to come up with an earnings beat when it reports second-quarter 2023 results on Aug 2. It has an Earnings ESP of +2.14% and a Zacks Rank #2 at present.

Terex’s long-term earnings growth is projected at 18.2%. The Zacks Consensus Estimate for TEX’s 2023 earnings per share indicates year-over-year growth of 37.5%.

Emerson EMR is likely to come up with an earnings beat when it reports third-quarter fiscal 2023 on Aug 2. It has an Earnings ESP of +2.35% and a Zacks Rank #2 at present.

Emerson’s long-term earnings growth is projected at 9.1%. The Zacks Consensus Estimate for EMR’s fiscal 2023 earnings per share indicates a year-over-year decline of 20%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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