Eaton (ETN) to Report Q4 Earnings: What’s in the Cards?

Eaton Corporation ETN is scheduled to release its fourth-quarter 2023 earnings on Feb 1, before the opening bell. The power management company delivered an earnings surprise of 4.23% 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

Massive improvements in the data center space are likely to have positively impacted Eaton’s earnings as higher power requirements will continue to generate interest in solutions to manage cost and resilience. Eaton’s fourth-quarter earnings are expected to have been positively impacted by organic growth in most of its segments.

Megatrends and re-industrialization in the markets in which Eaton operates are driving significant capital investments and creating demand for the company’s products. The ongoing buyback of shares is also likely to have had a positive impact on earnings.

Expectations

Eaton expects fourth-quarter earnings in the range of $2.39-$2.49 per share. It anticipates organic revenue growth of 8-10%. The segmental operating margin is expected to be 22.3-22.7% for the quarter. The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $2.47 per share, indicating an improvement of 19.9% from the prior-year reported figure.

What Our Quantitative Model Predicts

Our proven model predicts a likely 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 +0.20%. 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.

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.

Caterpillar Inc. CAT is likely to come up with an earnings beat when it reports fourth-quarter 2023 results on Feb 5. It currently has an Earnings ESP of +2.02% and a Zacks Rank #3.

Caterpillar’s long-term (three- to five-year) earnings growth is projected at 12.89%. The Zacks Consensus Estimate for CAT’s 2024 earnings per share indicates a year-over-year decline of 0.32%.

Stanley Black & Decker SWK is likely to come up with an earnings beat when it reports fourth-quarter 2023 results on Feb 1. It has an Earnings ESP of +10.35% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

SWK’s long-term earnings growth is projected at 12.4%. The Zacks Consensus Estimate for SWK’s 2024 earnings per share indicates an increase of 1.2% in the last 30 days.

Emerson EMR is likely to come up with an earnings beat when it reports first-quarter fiscal 2024 on Feb 7, before the market opens. It has an Earnings ESP of +0.41% and a Zacks Rank #3 at present.

Emerson’s long-term earnings growth is projected at 10.2%. The Zacks Consensus Estimate for EMR’s fiscal 2024 earnings per share indicates an increase of 6.2% in the last 90 days.

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

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