ETN - Earnings call 3 2023 | Eaton Corporation plc

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Operator

[indiscernible] conference call. [Operator Instructions] And as a reminder, today's conference is being recorded. I would now like to turn the conference over to your host, Yan Jin, Senior Vice President of Investor Relations. Please go ahead.

Yan Jin

Good morning. joining Eaton's for Earnings Quarter all Calls. you us Third for XXXX Thank are Chairman Officer. Arnold, Tom me Craig With today our Vice and Okray, President and Chief Financial Executive and CEO;

Craig, Our includes over Tom, the will agenda who in will the performance quarter. opening by to company's today highlight third turn then remarks it he

today presentation, on As we end including past share, the Craig's website. for this commentary. closing our we'll of release presentation be available and website posted we'll per A in earnings and our other have adjusted be calls, done of flow adjusted have go the This replay. free non-GAAP through The call webcast our [indiscernible] on will on at cash is accessible taking been measures, press the and appendix. questions

like to results expected the will forward-looking statements. that related our and therefore you future statements including remind are commentary be I today to of company the would

to actual results range the differ our and materially of release from Our projection may that described earnings in a presentation. risks and our wide uncertainties are due forecasted

over I Craig. turn it to that, With will

Craig Arnold

Okay. Thanks, pleased Yan. QX another record report results our in We're quarter. to

to continued markets good our commitments, deliver supported and by strong on execution. team Our

the highlights let me begin Page with some X. So on of

flow margins, results as results some pipeline cash including earnings revenue, of record the these continuing electrification quarter, and trends another to business. quarter As once time digitalization in now, We we've negotiations Electrical reindustrialization, Americas are shared evident with are orders and especially growth. revenues, expand for megatrends, energy financial our in and posted transition, in our our again strong markets,

guidance our effectiveness, our record drove and our once cash operating strong, 'XX We're improve for While raising our we're continuing which margins, adjusted also and to markets flow. outlook. our EPS again overall we're raising margins, on earnings be to continue

the our now midpoint for Our guidance at of is EPS growth XXXX XX%.

Aerospace. XX% And in for a have Aerospace. we up X.X our strong backlog, I'd which of continue book-to-bill X.X in highlight and also like and Electrical was ratio to XX% growing to Electrical for

record up XX% and details. operating we're share recorded a flow as Tom positioned we margins to of results will third well cash additional with and Lastly, pleased record quarter tell, can the free you flow XX%. of But close cash $X.X year. out overall, billion,

X. a Moving key to last our we how for various market about company. growth Slide and investments we with drivers The driving the for the X In notes quarter, shared they think chart that intersect Eaton. within framework are capital businesses megatrends how

our we're our of appraised in during and and intention see, expect of can markets these accelerated to keep opportunities. call growth earnings to positioned each uniquely businesses most progress. to megatrends see you and our As cover of you It's

and and these projects the think as In topics North our few spending how is We minutes growth are win market. infrastructure in of on and reindustrialization extensive company. record a outlook Electrical fast-growing the our QX Aerospace mega about received number to in earnings provided data questions on ], and to helpful drive progress utility a how America positioned Eaton an the for business. in on [ reindustrialization we'll number Today, our market of call, summary of we the spend a continues you each of center hope updates

good begin of seeing and proxy previously, the of let's we're our data inside reindustrialization this in the So Slide chart what with shared We've many and presentation. X markets. for a is

as but North a and since this a although amounts is with chart are projects we're number project dollar Europe, recall more. summarizes an of similar announced been large. have seeing project is that not billion in XXXX, the mega mega data, America a or value of January the that You'll the this of $X trend announced Note

billion, this $XXX Three which One, key markets. here. directly Xx electrical future number points the for normal translates opportunities rate, is at to to note

these As reminder, to X% from the X%. on projects range electrical content a

number this will continues and not up a grew faster and XX% Announced QX for from QX, grow on strong -- at QX. America. in between there Two, was grew North to rate. go forever, to XX% QX mega momentum but between industrial XX projects be projects This continues

And XX% of actually started. third, only these have projects

million a of negotiating won have announced For those a another started, mega these electric we're projects. actively XX%. $X that on rate win with billion we've And small $XXX roughly subset of approximately of of orders content

Turning language appetite data market. processing, solutions better than exponential rate. secular highlight to only data, will natural can't like grow this continues have The many And Slide insights that data software the center We new to ChatGPT, at trend. markets world's for accelerate centers. X. dynamics growth I think and of an

This channel good center thing as XX% very is have data and for data center/IT represents strong Eaton a our the of a we solutions total revenue. portfolio of

and market XXXX While between and for grows at a longer. compounded the numbers rate this continue XX% much think we refined, be likely XXXX to now

to As center customers expected, are adoption are of to AI. expand being our which the of data build-outs, support modified some generative their continuing CapEx

Just XXXX, XXXX, expected over a have XXX XXXX. consider increase generated generated data in some the zettabytes been increase grow of these XX-fold of by And a in over amount to metrics. generated XX% XXX is zettabytes of the XXXX. X data zettabytes to

up starting And the in is to show AI book. order our just impact

roughly large content. training order we in hyperscale These AI a overall. center high-power data of high-power AI require a centers saw QX, orders data approximately During and a $XXX higher as million for XX% new density increase and both electrical and won a result,

ability is content the power the use to energy of solutions Another the centers. back trend driving renewable to flow for to power of and data grid electric optimize that bidirectional the need allow higher

well are for positioned come. Eaton for growth and market this to So years higher

XX market draws portfolio the is Eaton's we Page manager on we and broadest and unique variety power in slide. XX And center the of data for Centralized note power positioning between with XXX megawatts, X, that megawatts centers. incoming centers industry's XX which average the that on of data sizes this show in a with variety here the come to center have data we data of electrical solutions highlight

of electrons Eaton, server from electrical facility transformers the and we, into our to we where to systems through power the the our our support way they enter our medium-voltage racks all from the units. busway distribution uninterruptible low-voltage where switchgear rooms, flow power offer and

that we a software support. broad have addition, In uptime suite solutions and service of prognostics real-time and diagnostics, provide

$X.X of market million thumb, in is As Eaton's megawatt. a per data rule centers about opportunity

smaller Here, our center Brightlayer exist suite our of improve to data from market we're we And data myriad smaller markets in distinguishing solutions. the for of software with to that market many different the this and continue applications. centers support position

This certainly into that data IT platform device new and to monitoring, single and first improves power unite electrical electrical supervision in is provides industry software the power, metrics and performance This quality, application. efficiency, advanced one the power management accuracy uptime. distributed asset equipment quality management, IT operational

So to overall, and positioned Eaton growing is build well strength our on continues rapidly in market. this

broad of outlook, set our to on our many investing Given naturally and in of add growth we're businesses, capacity megatrends our noted Slide X. as

of our of billion on wide that more next the position years. than support the than Eaton $X see and markets the of we our normal a to opportunities. these investments In range capital X production more run over to expand we're These growth rate, fair investing across share win capacity fact,

circuit equipment are the capability gaining production opportunities investments improved, breaker and As still capacity longer to Electrical somewhat primary in utility you've line our support growth our address insulation The emerging and more. industrial will ample And markets business in sites. in being our existing and our global our times been than of lead heard, the fast-growing to and investments both ideal. made but growth to have a do and these support to regulators projects support share bottlenecks are we've transformers, in to while to manufacturing where rapid in redundancy markets, add significantly number the

year, the capital our others completely investments this we're the over of eMobility there. course, return will growth, excellent business and years. and are of of support build higher to indicative on significant made these And making investment of of next organic future investments out provide be We've in couple confidence company. capacity manufacturing new the in layered a while investments capital new These building some

Tom Now financial year. to for cover over to our the results I'll and outlook it turn

Thomas Okray

Craig. of for quarters of results, growth. start summary an QX we line, a record top growth quarterly which the providing double-digit building quarters of on to to X respect mid-XXs by X% stack of consecutive continues our upon Thanks, posted Organic sales a and strong, With growth include I'll the quarter, up X-year billion. several all-time X records. $X.X be

margin of QX. points in Operating Operating strong margin profit up records on We from expanded sequentially posted basis. incremental very XX% margin a and profit in recorded XX%, QX segment and grew a and basis both to XX.X%. all-time XXX XX% XX%, absolute

EPS record and to by the resulted range. quarterly prior the $X.XX well quarter share, guidance performance XX% all-time third operating of above in increased cash This high our Adjusted over a record. flow end year an per

and prior flow $X.XX Our the free XX% in flow than conversion. flow free was year, XX% XXX% generating cash higher over cash billion operating margin cash

up our at points. flow XX% incremental is operating Looking a and margin up increase of growth prior We XXX growth year margin XX%, in Organic generated free cash on results up versus of XX%, flow basis EPS a XX%. XX% adjusted Segment year-to-date is basis. cash year-over-year.

the to next on Moving slide.

We continues and set execute strong profit delivered quarterly XX%. and to business Our Organic quarter. all-time Electrical at records for growth well margins. operating strong another sales very remained very sales, Americas

a Americas XX%. quarters robust broad-based the with up in everywhere quarters On machine nearly XX%. all markets growth for growth end growth in generated double-digit X-year double-digit utility, residential the and greater center quarter, especially industrial, of OEM X markets. organic and except than organic there stack, Electrical was with data is growth has growth In consecutive X

of benefiting price Incremental volumes segment. of margin versus management the margin XXX up XX% cost. prior was operating Record and year, basis from for points effective was XX.X% higher

be value orders a to X%. note year. down the the in important the context of It's XX-month dollar XX% were in order On growth of to decline basis, rolling QX remains orders needs high, and last viewed of that

metric quarter's is together important an As be record we electrical with call, discussed backlog on have of sector, Currently, Xx historical last to backlog. intake analyzed our our needs average. almost but in coverage order

for that multiple are scenarios, generate quarters and robust organic at in order given meaningful scenarios growth intake with decline looked have several XXXX. coverage can confident We our into backlog we those

Electrical sequentially, rolling on regard, backlog XX-month this X% above ratio In resulting XX% basis. year-over-year book-to-bill increased in Americas a X.X a and

institutional orders, For industrial data strength markets. center, had and in particular facilities we

year. strong center Also, negotiation our in pipeline strong in our negotiations X-year up continues a from was water, stack, government year growth and sequentially QX was increased wastewater major almost Americas markets. Xx. Data project data prior to Electrical Overall, have versus up and very especially pipeline negotiations XX% institutional, a center, On XX% XXX%.

On find and you'll Page Electrical record. flat posted a strength growth, markets. our in organic segment. utility for our right the Despite institutional, we had XX, QX commercial results sales Global industrial We and

weakness saw where EMEA markets we offset was in other in markets expectations. that were in line Regionally, with growth

We digits in expect mid-single be softness growth EMEA to returning QX. in the segment to to the term in with low short organic

of price cost. XX.X% to Operating Margin were were compared margin profit XXX and basis by Operating improvements prior year. quarterly records. was managing primarily margin driven up all-time points effectively

X% a XX-month center with utility up were data basis and Orders on markets. strength rolling in

Importantly, book-to-bill remained than X. greater

to our briefly to combined I'd industrial like electrical moving recap Before businesses, the segments.

of of year. XX%, basis incremental posted and XX% which XXX margin segment we was QX, prior up margin organic over growth of points For XX.X%,

X.X. very strong basis, strong our business. book-to-bill our sector our margins remains remain electrical a quite continued in We rolling XX-month confident growth for On than with ratio our at in overall more for positioning electrical

slide from posted with quarterly Organic highlights records. a quarter profit operating was next all-time sales contribution We foreign segment. The growth our XX% exchange. Aerospace for X% the and

in Growth last strength We've commercial in broad X and and with XX%, aftermarket, respectively. were of this posted all by commercial growth markets double-digit strong up in particularly growth XX% across was which segment. driven the OE X quarters

with XX be and especially Operating margin strong to aftermarket very rolling commercial points OEM. orders defense basis On growth of increased and backlog orders OEM, in was Growth on year-over-year XX-month and commercial strong. XX.X% basis, points up basis sequentially. in up XX% a continue basis a XXX

XX% our the X% recovery. Aerospace and On increased backlog very book-to-bill segment momentum Year-over-year for in sequentially, remains reflecting strong a QX rolling at continued XX-month Aerospace in our X.X. basis,

Vehicle down the to Moving In growth our was organic Page XX. on X%. quarter, segment

American North a APAC, had impact. EMEA a saw and American more South X% by exchange North Foreign markets. and markets offset in in automotive favorable than growth X We decline Class American

primarily XXX driven came in basis volumes. by of at increase points effective driven Operating represents above price basis XX.X%, sequential by prior XX margins management, cost partially by points margins lower improvements. XX.X% year manufacturing sales offset efficiency

continue torque major business EV OEM. to new a pursue win Chinese win areas with We growth as and in such

OEMs extensions also with momentum and winning globally. multiple volume We program increases have length

we Revenue growth, generated organic. On We XX%, all-time results Page strong an was business. eMobility show of including up all for XX, another quarter our sales record.

Margin versus productivity. points breakeven. improved higher XXX was to programs result from ramping prior mostly volumes by improved The basis manufacturing year driven and

remain very by we growth segment. Overall, of prospects eMobility encouraged the the

billion. XX% Through these XXXX technologies opportunities across our of $X.X nearly $X.X be wins, XXX% So new since far we in won is a have new call. mature wins quarter's XXXX, to Should billion interim by This we find $X.X target revenues. increase differentiated for in increased noted, continue last and highlighted leverage earnings segments. to programs revenue to million we program have $XXX expertise the worth year billion in from

and through Aerospace updated Moving Electrical to backlog show XX. our Page QX. We

to As $X.X increased for increases Electrical billion, gives confidence we X%, XXXX. you quarters continue the backlog than and businesses and to stepping more in outlook Aerospace see, of reaching significantly sequential by respectively. order up have come. backlog us XXX% to build their with billion backlogs build QX our The can since Both X% $X.X

show next the and year guidance. margin operating On we growth our fiscal organic page,

For Global basis narrowing the organic organic of lowering are growth, in XX increasing midpoint. point at range Electrical we a increase growth, eMobility total Electrical Americas, our and resulting the while

from Americas XXX guidance. up to our improvement prior to now growth initial to points XXX XX% This XXXX guidance. be We expect represents basis our in points XX% organic XX.X% from basis Electrical XX.X%,

we're weaker-than-expected organic our on For from growth Electrical to guidance X% X% X% end to markets to X% in based Europe. lowering Global,

for our EV XX% the now eMobility, midpoint delays XX% their is mostly of For organic guidance growth to versus platforms. due OEM-related

our the demand points Americas, increasing basis increased we're XX Electrical in XXX on improved is range continued margins, we strong Eaton of by an margin a segment This guidance operational basis For result total range outlook where and by execution. points.

Electrical to XXX The target basis a guidance We our for year. Global increase XX comfortably due XX.X% are basis XXXX by points exceeds XX.X% represents reach lowering margin midpoint lower point growth. to prior versus and

In summary, performance. remain of strong deliver very the final we XXXX, positioned of approach well year to another quarter financial we as

additional we guidance metrics On Page have XXXX for XX, and QX.

share. XX% year-to-date performance full margin $X The $X.XX strong in $X.XX midpoint improved expectations, adjusted our our are Following and per to EPS we represents year range raising share growth to per free each raising working prior to operating the over EPS our also guidance earnings and flow year. ranges We're stronger reflect million by and capital cash our $XXX flow cash solid management.

of are at XX% basis we margins of XX%, to the growth organic versus XXX is For of QX, at guiding prior X% EPS $X.XX to year $X.XX, year. increase range Adjusted improvement a representing segment midpoint to an midpoint. prior point XX.X%, XX.X% the versus

of commitments we've in The XXXX. all metrics the to next progression our for chart the guidance year, ability summarizes the on shown. Throughout demonstrated execute our of raise the guidance and

growth in of a in are flow. billion XX% nearly all-time in We increase or our row operating with year deliver cash organic $X double-digit on well to third a track margins record

it hand to I'll back Now Craig.

Craig Arnold

Tom. Thanks,

XX end initial our what expect view Page next to and from we on our markets. year. Moving We to attention our turning provided

note our all first, And this XXXX. growth we're markets a point, haven't changed as of And view on you can starting expecting as nearly in I XXXX. attractive we in would our see,

electric and IT commercial in growth double-digit strong expect centers distributed aerospace vehicles. in utilities, segment, data and We

And a Additionally, residential as and be commercial facilities, with vehicle we expect experiencing defense commercial you should decline. the solid light only modestly growth vehicle and market institutional within and industrial global markets positive aerospace. [indiscernible],

XX% significant solid of end year seeing another our with be should better over or of growth it growth. markets So

is organic guidance as of growth together XXXX come more provide our record year. much February next detailed supported and with by on backlogs, this that of we color we'll growth in note Please

remains the As you to outlook, call some can in and mixed well see economy we the beyond. growth historical from and Eaton differentiated indicators despite signals in positioned deliver growth, of what XXXX very

XX. XX today, feeling markets on that are performing. Last about I sentiment. -- our on I'll with So a how Page Page I noted that summary reiterate quarter, good close And we're

our We and higher seeing our megatrends markets, are order continue book. negotiations and powerful it that for we're to outlook a end driving experience in

quarter increased outlook. again, And of another results, flow earnings record once delivered and our financial we cash

at continue our high backlog. to historically to and in we grow orders come levels, Our continue

is that I'd but be than note everywhere our better have would we say an team I every well, to business. executing opportunity in

So the XXXX expected, for another as should setup is and we playing out be year. it strong

have. open we'll that, With you may any up for questions it

Yan Jin

to over the Instructions] you [Operator it turn With operator guys Craig. instructions. Thanks, the to that, I'll give

Operator

[Operator Instructions] of America. from of will Obin The first the come line Bank question Andrew from

Andrew Obin

third from on for question the Americas a first Electrical very and progression nice into quarter incrementals, in quarter overall company. Just just

So incremental and to progression framework, because your I the just a we you've used lower about fourth should think 'XX within how quarter number. think

it these how going sustainable Just maybe forward? what's expand incrementals and strong driving is

Craig Arnold

during the well of are question, team the And we're attractive performed Andrew. well. incremental certainly the implied I guidance quarter. proud appreciate and they the pretty in in And our well executed extremely certainly as our and teams how quarter,

they about kind magnitude cost of same certainly, expected of with think in business the Maybe to I'll question we're And if way making think incrementals to the think forward provided XXXX. and of during XXXX, moderate we that still right about answer some going are investments order company. tailwinds you the the first and to price as tailwinds going in the think Clearly, XX% of the last about incrementals. we're course of to see kind not incrementals for we versus that incrementals in XXXX, respect the the are

have in sight our a incrementals good those think and So are forecast next but pretty QX. for a about we embedded as -- strong And that planning we is certainly, number to still of for line year. XX% QX, we QX think

Andrew Obin

question. just And a follow-up

give XX, of capacity market sort look at additions. growth I assumptions. Slide additional keep You you end If announcing

So your the we how revenue or outgrowth to capacity should particularly end relative market from opportunity quantify assumptions? additions,

Craig Arnold

have, a the we've certainly demand really that we in to This is seen our see to make many the last some expect terms problem demand of years future. stronger of growth investments into in with that the kind over seeing that of deal the to businesses few and and Andrew, to attractive we're having the

And some so markets. these make to some this growth capacity of for we company talk strong the in about And key need we in outlook investments bottlenecks. and kind

in billion putting about even where my talked give and than turn a need these the capacity going. that and little headwind that the commentary out be will for what a to us that growth in support we anticipated. And company long-term say opening the investments we're outbound the to $X stronger We if I'd we bit markets it's above that outlook

And so the front need should pretty to in making the for make outlook get out that we we robust company's the be we investments to making growth. are of and we that have

Operator

from Ritchie The Sachs. question from Joe next Goldman is

Joseph Ritchie

little coming to a Craig, those just started orders like that and how you timing for continuing you can projects do playing you think about on -- the bidding of this you the out increase? again, through, think projects funnel will of projects have the already the typically is the second? maybe mentioned and a bit When of now talk started. the projects you when kind I see XX% a on, based mega about see have that

Craig Arnold

of inside internally broad some or to XX-month sort there's that of essentially array And you we've of certainly those appreciate cycle, are different which of can others this spent where a Yes. time numbers, amount embedded projects, that a have types and trying mega fair it's of ourselves. the question, you'd to cycles have something which very longer. X-year imagine, I as of kind could in projects of

depending we're the wide it's times upon distribution that pretty projects So lead talking type about. of of a

inside start juncture, you're of a in actually that of a at So you projects probably years terms I'd on project in revenue tend of because company. if probably had use we and bigger say flow -- our of actually thumb, couple these be when from rule average business, to say price the the to showing this up they're a unlike I'd to

of couple you can If is way the think to it. about on years figure out average a

I would else, would questions. today topic. of we've about say in about that, I so perhaps fundamental anything There's mega company. projects that growth much many change the written driving what's this say these more than particular principally prospects in general, been this talking that is gotten the so

the than note by historically. IIJA these And ever I'd CHIPS projects the that XX% related of mean, much bigger they've the are projects, whether to I huge these IRA, been Act. or way, it's

are really so projects. And these big

are And spending subsidized that's they projects broadly this taking that different government being by frankly, are many ways economy. They of quite place in inside more are, U.S. the projects.

forward are to for They're So we and to going think solid. growth once again, think, we going really go tailwind these attractive the projects be company.

Thomas Okray

up I complement to but in mean, and said for we our remarks Craig, those which sequentially. up that, are year-over-year And negotiated the prepared the U.S., projects, also XX% the just mega was pipeline XX%

lot the good but as a going on than So big in less projects of $X well. those growth billion

Joseph Ritchie

follow-on there Yes, guys color, guess being my lot at quick a guys. the great year. regarding the any project digits up think out concern I market that I market concern you have next point? you and CapEx, of There's double that's specifically, utility in financing called just just is this And

project around the and interest pushes issue, that higher whether costs bit. thoughts Just out any financing a things

Craig Arnold

we're one given some as much certainly watching say the delayed higher risk, well, Joe. logical or of cost. concerned and be that these things we're put of at It's about It's perfectly to Yes. financing that could projects

by And government I these the is substantial. And date. you very new. basically know, material plans, we've dollars, potential these any risk. which why evidence certainly, But evidence, highlight [indiscernible] quite stimulus XX% of of will as I not to it's being financially again, that that's once tell you seen are projects supported any around that a

precautions. to But have that make plays and haven't date, watch And and it really it impact. wait the necessary see going we're we'll to we point, this to seen out. how at sure taking that And we're

Thomas Okray

year-to-date up look is you electrical the XX%. XX%. over sector over utility at Americas, up are the And Joe, entire year-to-date if in

So very strong. it remains

Operator

from Research. Sprague question is Jeff next from Our Vertical

Jeffrey Sprague

Can more we to color kind by of And floor the little demand the noted Electrical pivot little bit underneath project a surface on activity there. starting a maybe bit some complexion the Global? geography. just come to to And you of there

particular, U.S. stimulus It war with bidding in and does project like. the seem might bit on the like Europe, end in a a up of

So a of pipeline maybe first on playing you just little just building. bit might QX, what of how there the of half into but year, be out color kind things next not see

Craig Arnold

if think it's there what the Jeff. global business And in then global make there call for about Appreciate was us, B-Line X that question, our And you and are up us. former business. today, Asia, GEIS, what electrical makes for what the Europe we pieces [indiscernible] up do what we business. is do we the is Those the which

slowdown segment, weak. will manufacturing the business call what we see without a the a pretty you during that into doubt, course say player business that in especially our big or the I a was specifically. OEM And and know, European did of our segment We're

Asia perform well, Our continued digits. business growing in to high single

continued our our GEIS own what in perform outlook. digit Our the electrical, during to Europe, miss mid-single expectations the place the in reduction course of quarter consistent what the expected. we and fine, that really drove took It's specifically with business in of

growth clear having destocking -- distribution some Europe, Now with XX distributors do large segment adjustments, And doing doubt, we that we we the so. a in -- channel the it's of took or were person that that, conversations think months without place QX. overbuying some they gets some in in in back and had of over inventory some number saw to that last a our mid-single-digit

that applicable for of growth transition, respect energy are And as electrification, Europe with talked we data these think, once centers, trends all and about trends again, digital we to those well. fundamental

And inventory growth that slower back so the while the once we seen than here growth think think those we've in this correction work we third quarter. markets through do to U.S., get we

Thomas Okray

we've order some good seen flow Jeff, in Encouragingly, EMEA.

us gives to QX. low it that to in confidence mid-single gives us the digits So go --

Craig Arnold

pollyannish there's we'll And make. the some of as make to it. adjustments And to a make we the lot there need I need not well. if keep clearly, geopolitical But watching it. in adjustments, to be we'll we're tensions mean, going we region about

Jeffrey Sprague

different as here. dive just speak little deep a maybe And centers Can follow-up, data you just for just on is thanks changing? Great. your many content to though, topic, the is how

megawatt, back in right? your obviously, So a per the gave your you a of So lot equation of megawatts us And sure. part this it we grow you dollar where that is up on megawatt headed going for how per got and coming, content been? as is $X.X where it so, has just But million of view? also and

Craig Arnold

would is I yes. the What you Yes. simple tell the that answer to question is

are selling marketplace. more selling essentially because the center software data we're more selling more into per megawatt We complete content solutions We're solutions.

So be true. that would absolutely

alone, greater center be of starts maybe the driven impact projects in ] dwarfed the if That about, simply the the at is of the and data surpassed construction, we've just up for today And some mean, September I backlog you though. overall kind some to X look robust. by than continues talked just quite the billion ever market, as big [ in growth of construction. in data the month $XXX of $XX billion under it billion the XX% in planning stages, by first some of X time the years $XX market

Xx AI when whole think equipment growing content growth, now. in right the an the opportunity today in data alone center, accelerating the the opportunity to compare obviously, it's it about is conventional And what's that. quite is you for electrical data if And center. a AI-centric market happening dramatically So you

Huge industry's that, to deal of front backlog, ability that's said with having there of Now demand clearly really us. are terms some constraints real in the out in huge very negotiations. the

with operated in historically X data visibility years, now some have have projects. years visibility of in of center on some more market. We We cases, let's say, than, X

is do just to for so we'd extremely to market years well, whole it come. performing expect the so And and

Thomas Okray

Just in just prepared we a in up to Jeff, quarter, our more on Xx. amplify, little remarks, And again, in XXX%. the centers, negotiation the bit data up on that, as standpoint said year-to-date

beginning the at of was it as than faster the well. growing it's So year

Operator

next Research. from from Scott is Our question Melius Davis

Scott Davis

was Not flow much opportunities we here solid if little while cooking. I the M&A pick bit is But play board. offense on, talk to cash across could to results and maybe a really wondering about

I And eMobility the scale was bolt-ons several a something scale or -- segment to little larger up it's than little to interesting is there bit really make any thinking, in opportunities faster whether to there a get maybe particular, out either pace? current to that the

Craig Arnold

will will would Electrical. They M&A would first as I find question, the that the asset, the acquisition be an consider respect could more Aerospace. right I to we say on eMobility Scott. appreciate with then And generally, we be And well. our all, in if said priorities of margin, we

I think front of grow today, we across we're that organic looking have the for broader growth the in opportunities message enormous us, organically. the are there to But business the at just ability opportunities our is and say, opportunities place. every growth that And company I'd

we eMobility. And significantly need that's company. to unlike times as grow past, well true perhaps do don't in And some deals to the

As I we huge million, Tom, quarter terms was in believe, another of number, change? had just of you Tom's $XXX presentation, heard wins, in the quarter-over-quarter

Thomas Okray

It's up yes. XX%. Yes,

Craig Arnold

just organization. in of growth one So just the for enormous results these in each wins eMobility

billion of $X to by chart And being $X we this so set XXXX. billion

We selective. be will

our prior will where to and core about leverage going scale, We our of we make in the business. expertise sure we're in ability to we technology talked the as electrical in eMobility, have the some -- our essentially we'll conversations, that play

That's margins the that's right have right win. where That's play, we we to where can the for really to attractive and where deliver Eaton. we have

interest And so that to eMobility. with strategically focused respect that's in on the areas have what we're of really we

do at core power Electrical leverage time, we into eMobility we really in our get scale into same that the We things it So business. protection, the distribution, about that scale is same our core that can doing leverage Electrical business. power back

So organic that company I makes of things are opportunities are with to terms I'd think say that us Those the the today, digestible. about tuck-ins, we're in very at much opportunities of today kinds the our those today M&A, you things could are and of terms in general, we us. the looking of are expect thinking in where respect growth in front for sense

Thomas Okray

Yes.

add prepared even our long-term a little bit But last we remarks, year up more. said to in up as target, was Just since mature said and the wins XX%. quarter, The XXX%. Craig

the we've flexibility. ton a on X. X balance Net said, sheet, got leverage of That

food So as do the said. we're on a we lot always table, Craig have looking, but of

Scott Davis

guys, And bit. little back up a just helpful. That's to

If how the always about dislocates algorithm of Eaton pricing materials, just a or raw to customers been is historically, kind steel be in you around had pricing kind from the far around bridge company more commodities? Is that from perhaps think copper. and manage particularly kind future going are the too price the you're of conditioned? of that adding a of kind value Or underlying likely

Craig Arnold

cost. I'd bit Yes. around respect get think versus price dynamics were I that you than you're a broader like with leverage market think, your I the message but it a we always And market, when you've to pricing, certainly, more value had capacity-constrained Scott, to certainly whole in historically. gives

is our that company margin by and the about we'll running inefficiencies. in company And our I'd we for to better, the see general, inflation and strategy where waste earn recover through eliminating it just running we we better price. the intend But businesses accretion by as say, think

expansion despite in those volume commentary, outbound I margin operating as the the opportunities company, we know opportunities, we leverage, my said still profitability, running really in nearly efficiencies as And improving we we the But run the rely company. by those the We're efficiently company everywhere. are way on record not intend to for can. the as way,

Operator

Tusa JPMorgan. Steve from from is question next Our

C. Stephen Tusa

good Congrats results. on the

Craig Arnold

Thank you.

C. Stephen Tusa

reconcile the pretty $XXX the think $XXX a with big million orders of number, have I orders but products said That's obviously million in to trying started. just small. you mega Just and in guys thing that just the you the are, get then where can guess to order. Like you reconcile starts relatively speaks you numbers? I mean, is X I XX% those

Craig Arnold

Yes. win. to got mean And it's -- recognize or because reconcile numbers really we've -- opportunity the even necessarily can't a those less a start much that and X yet -- a bid project really doesn't negotiation you an

can't those X you so numbers. really reconcile And

get And the reconcile it's going their and everybody number trying you But very X I really to numbers, know attractive how is it's impact exactly a them. head one to revenue around such those organization. a big that can't for

market projects as XX% you in of win which these shares as expect $XXX can't of to an a the you of underlying to is can XX%, What provide the our slightly really this North the is framework play bit above what out essentially future. a we're is trying America into link rate But indication million.

C. Stephen Tusa

Well, I just mean, think did. I you

basically said You it's out of in front Yes. you.

explained I just it. you think

you a I talk Hubbell more do you there's talking destocking, of about the of know stock lot -- industrials but systems-oriented, will. one then you're other business, And today guys and about last and bit continue to just kind one on a that. if ship

on kind seeing Are weathering equation about and of some businesses flow Maybe business? some just is of parts of because strong in you other the talk of seeing destock business, in what you're so the businesses, distribution parts just you're you those side. the through the supply-demand blowing some that kind it and of that just guys your

Craig Arnold

similar are No, residential in that's it summarized channel. our trends seeing company, you've IT whether or businesses whether I I inside the the think in segment today shorter-cycle the we well. very of seeing MOM mean, what of or we're some

We, we, aspects business. too, are certain destocking slowdown. bit a are a in And of the seeing -- too, of experienced

are in And certainly trends that have -- others business talked that so about well. our as those evident

weakness. business, seeing on business, the data pieces we're that where But our spots head you overwhelming when said project I the those having think where this nail strength the and of parts systems just large hit other center other is we're the business, the the you our

the about quarter. reduced Now our the up in our the we in Europe. trends talked guidance in see it electrical those European reasons showed commentary, It's did Europe, business there. weakness in clearly why one in of we And we

had strength. seen in and really we business outside as project-related to Europe. the flow America And North contrast, we the in the by But as the offset the outside in what systems well this continue strength in we've weakness that see business Americas in

C. Stephen Tusa

Right.

easy trend the assuming line. So businesses, things year recouple next that in would be those for comp actually an

Craig Arnold

is nothing easy. mean, put I Europe predict and of going Well, during the And scale to happen our XXXX. it's on early what's in certainly the hand probably to course too

weakening, it I that and behind assuming are should stabilizes we have relatively and the us inventory embedded the right. fact you're in better our Europe. certainly the market businesses given year that sure be in for those is some But destocking QX yes, of outlook, a mean,

Operator

the is question And from next Chris Snyder from UBS.

Christopher Snyder

of center I follow data up wanted to commentary. some the on

So Are year in of you all in to on broadening talking base driven seeing Is data I said you are by you up increase that QX, customers think building as goes that on. so AI? a conversations Xx negotiations the topic? center the

when then think from is really the that more we any And XXXX? tailwinds, in XXXX? about benefit is AI tailwind there the Or

Craig Arnold

And the mean, appreciate tell and late, question. of all, for first I topic a attention. of gotten of AI while gotten No, would I Yes. ChatGPT time. publicity I'd a that a around lot you, that's been obviously It's has not lot some have it's new. it of say

And so some data the of AI number that, you we market. historically benefit have one. I'd in seen tell embedded center

had really in bids were the we data a Xx, said general. orders in up market. I across XX% as but AI-centric in broad that and Secondly, is my commentary, yes, increase hyperscale the And center outbound

more the more AI doubt, growing data, broader be of big essentially message a growth. But data will And an as without numbers and is centers. are requiring information, more accelerator insights well. more so And those

Christopher Snyder

then backlog. a over every that Americas moderated the your that. have about obviously time in the electrical following maybe just up guys intersection year have much built appreciate I And Orders period. And on backlog and now. quarter of orders pretty for

forward, we be Any would as backlog? to expect that helpful. in on of maybe sideways are start the company we kind you of period do backlog a that into levels of Or kind just meaningfully So working look into color XXXX?

Craig Arnold

some talked the orders to that XX% a trying we're through Americas, Yes, about mean, increase we appreciate the question, ourselves. have We also moderated. work and were year. in it's time from last comping I but spending certainly one

And the big last to backlog does so moderation a continue number off grow. of really year, and

I the function date that backlog. I question. much ways, experienced is only that at based is demand to of think satisfy been a we've we've kind your It's materially into it's ability really, this tell can upon not backlog to demand. how the And and $XX,XXX many what eat you're able getting to seen point, versus in of you

some this We will mean, forever. cannot at go point. I on

And some are we capacity. adding

going that's bottleneck lead and resolve sure, to issues For some time the the issues. of help

our Electrical that's Electrical, in up negative the And backlog so backlog $X.X but in mind, terms billion to Xx. we're would at Xx business, point billion and expect because running $X.X We're absolute backlog some in in in historical we turn $X.X levels. of a keep Aerospace, billion

backlogs all but are out of capacity function get function of these And at we of secondly, demand. so the is a of markets we satisfy that a things got yes, so -- some front that And fact some it's to negative. fact can But one, planning good. it point, the turn will this in

Thomas Okray

a basis. bit what a is scenarios is trying this just I modeled my intake prepared decline it where in to this we've was more. to And amplify And order of year-over-year Yes. on the get meaningful little at remarks,

how Craig is growth, quarters we think into meaningful as XXXX get given decline to even and intake Xx, coverage, order in robust to said, this And year-over-year several the backlog levels. take big backlog going historical back we is right organic with the now the before us

So...

Craig Arnold

never never you we but probably get billion we'll of to it terms about would probably back absolute right? if think historical of get backlog. say a better, We'll terms, to And I kind levels in back be $X

business we'll bigger a It's need.

that a large, to the And bigger run But fact certainly what business. the so into at backlog. we'll start we large simply expect backlog point, it's some to, support a would eating

Operator

line DeBlase Bank. The next the Nicole Deutsche from from is of question

Nicole DeBlase

guys little cadence investments phasing and going coming talk making over Can the to years? you next are a the that's of we about online bit the start kind just of and just when capacity that several

Craig Arnold

Yes.

we of you investments like. are have So already breakers capacity that like And I And in new appreciate the these and on tell bringing some the would Nicole. circuit made already. been question, products

early Other the are phases. just now investments in

capacity in you of regulators, making If the to order XX in both we're XX magnitude investments some is think that the probably and about of months that out. capacity transformer

referring particular vary the you're piece which does to. depending investment it So that of upon

growth, In essentially made. business have all backlog of to more aspects have commitments say, more been we all I'd it. cases, our capacity -- certainly we're in looking obviously capacity cases, those have serve the we But than at more where

company execute that continue and some to for ensuring geared bring our point, the this well It take are teams at online. kind us it capacity share. we grow allows And and to of market up this

Nicole DeBlase

conversion flow, And capital year? working thinking just bit other about major about XXXX. on little next that to puts and a and into could takes reduce free influence Can talk cash then plans this you your how progresses

Thomas Okray

the question, Appreciate Yes. Nicole.

mean, in looking a I look think I the important cash good free free flow but and flow cash quarter, operating thing up XX% at at you're year-to-date, operating we're almost had cash flow. is in and XX% when we to cash year-to-date flow.

we look at If that capital. levers said investing working was it's last and believe customers and year, higher year-to-date, improvement And better the split investing you our in in if were decision. we earnings you for the about right the and between growth recall,

started we efficient capital. more getting year, with last of half back the In working

terms going in hand, flow DSO, continue our conversion cash this of of cash to in cycle. getting inventory better happy of to We're got days terms into on with we've opportunity We margin expect our lot improve free of that XXXX. a XX%. But quarter

So stopping with our cash We're here. happy forward. opportunity a but we've going got of we're progress, lot for not better flow

Operator

Barclays. Julian Next question from is from Mitchell the line of

Julian Mitchell

to outlook. ask sort revenue the quick or of wanted just I core revenue organic about Maybe a question

X you're organic of next that that's you share, how that that market September? sort that market in X% X%, point Should moving year the of that, I of assume discussed, and X% X% had pieces. main about helpful very about kind adding number you kind we or So on and that growth, from then to to slide you get end blends growth of so for think,

Craig Arnold

in give that us Julian. question, And to and of on the for where obviously, XXXX will definitive side appreciate certainly kind we'll early I do February. think a we you it's be,

talked that with and rate consistent whatever framework about that We much of way and to X% to a subject X%. to the the good end think the And the year. about of I XXXX, that very of of exit proxy in kind do the for is kind think now we the kind way of it thinking way year changes that's But talked it. about the the you about between see we're

world, -- are to the starting anticipate, that a much don't consistent And view. we it. which slides point think unless that with those someplace But go current very of in our would sideways good things outlook kind about market be

Julian Mitchell

X to That's I between was on helpful. sides of piece; and other. systems the sort circle piece wanted side. of I where sort you were and sort back longer guess, cycle of those -- lag And the coin: systems had one the then just product, of to electrical gap the the one thing around one products shorter-cycle the is the the historically, would the follow

it next thinking products they about the So systems the bit, think of a projects meet of a example. projects products Is when kind that way we're comps? or sustains slows year, wide between in middle, of sort we the about outgrowth any gap systems should for the and products, improve versus assumption because presumably Or very narrows. down mean piece systems maybe mega

Craig Arnold

we we we suggest from tell one to effective And systems the product probably Yes. markets, I reasons would appreciate that think most our I would reporting question, about general. why versus view Julian. electrical the you the of changed not of way this I mean, it's it's where in And sit, structure. it

serve. we so the focused that And we've on much markets been end

model markets company we the that end way and better we and we These centers, the utilities, here big about -- so is And that serve: end really to better markets think serve. commercial big way are the institutional think data are residential. the the

one for most a every into we'll will can these part, take a system large in or markets some cases, they end sell -- end a accept same of product. these solution the markets. In And

take is framework place give what these what the markets. and to so tried end provided going And we in we sense do that is we to think of a you

in into like go see and the MOEM would U.S., in And versus that is they our much the in in which have today for would would or differences in Europe let's perform, decline we segment, percentage way businesses U.S., where the be is center utility in a where data into, indexed residential our -- of than Europe, section example, in business our have say, the which bigger the everywhere. business Europe, more we take you really end segment, much decline markets in

that's about distinction So a a to to way I between and a model the think think this how better product company than system.

Operator

Steve question from from next The is Volkmann Jefferies.

Stephen Volkmann

planning which But back backlog Craig, reasonable historical have for is new thing, that's to this I whatever than assumption sort follow-up a slightly it backlogs pretty is higher at that you go normal of think end of explained a we well. to Just quick the number? XXXX guys kind

Craig Arnold

tell this you at I Yes. can to definitively, that year we about what that we Steve, what could of I we didn't XXXX. of the tell look question year you. terms materially what again, answer I that going into eat an we I anticipate once the wish in that said like end backlog because, the this is to look backlog knew underlying orders like. had

view a We what would on is. understood, what capacity and good our markets very be essentially have our

new into some We us in on will eat will online help the capacity That are bringing backlog. come XXXX. that

We customer are a better hope, being of are would quite can successful do to times the level that, XXXX. today? us ability given a we all we we as it's of end XXXX shorten because course during as that to job that equal and view lead frankly, would backlog responding to year said going demand. We reduce else the Having same at the

sitting at be be I visibility realistic. into would I number not today, going just that what would the XXXX suggest to have to end But that is here mean, any of

we challenging. point, markets if as reduce But so be up shortening the times. been, lead this And essentially by that at can they've will backlog be to hope that as robust we continue some

Thomas Okray

hard end our we've backlog of Even based the backlog, to to get we would our the scenarios at looked Yes. historical would XXXX on coverage. imagine reducing it be that at backlog

Craig Arnold

back reduce never we there. backlog. But probably get Well, hopefully, will Yes. we can

Thomas Okray

For sure.

Stephen Volkmann

that it view, fair actually helpful. point definitely devices, going a cetera. And et you I is from to question, IoT to That's I but guys of AI from collected the data capture which of other amount pivot want to Great. then ask think I'm the

can So years? you where the next of are few that on services comment maybe just in systems and own sort over data leverage that models collecting business you providing into and data of terms your new

Craig Arnold

as question. digitize And company and definitely of been this this on No, had our company. you appreciate that inside independent is AI, we really digitalize the know, to journey

so that expect we develop, product, to that have single what said we And stream data new and we it is every product information. a and that be to every to microprocessor process able

the for been a and on we And can years. And our we so the really propositions of that as better that, value of the been have new create essentially own part able interesting has to data. inside last attractive some monetize around going result X company of how

things wrap talk in that And called this hear of we it's about the Brightlayer you'll one up us term the platform.

centers, Brightlayer for Brightlayer and Brightlayer utility residential. markets have So we for data for

either have to all company ways I our monetize data enabled the that devices and fact essentially should all today, data. So this platform service our happening to today broadly that's as that something ability stream intelligent find of form to today, the across our the devices data the we or in and software data a by of use are say, of most is

year I as you would we're the meeting call, of of to a investor part encourage to the to is of do for one our on our try going to next center things examples and that you base invite to software. and solutions selling to our software our some real very Houston that in our today of applications data customer in you and we're monetizes data show monetizes various those really

see leg really the which in the this one we in exciting market. we products piece And talk across are So as bringing We the megatrends, digitalization. that we solutions data see company. market center about new of a is to way of these that new that also well and

Operator

Coe from Wolfe is question next The Research. Nigel from

Nigel Coe

is very good. helpful. Obviously, XX Slide

want clarify things. couple a Just to of

market the so share So for growth data through CAGR not center, there. know some I XX% Eaton, ambitions forecasting 'XX right? got necessarily that's you're So the market, you've now,

clear. want just make I to So that

about data Or here a about So data clarify And then market talking So we centers. center, that. the of are on-prem whole that talk are obviously, just a we just when is maybe about market? that you enterprise big chunk of subset talking market?

deterioration with have this put et on And you more whether I why end then ago, wondering know of it's matrix, you I big cautious starting end see residential. you're there. more that view time of pretty I'm to this you're understand that sure I'm but up not optimistic bit much real within a it's market the actually might macro-driven? market if if or months in sort And a had market, higher Obviously, X rates, an cetera,

Craig Arnold

Okay.

So I take think first one but there, the questions there's different X around. let's

So the the market. question answer entire is, yes, to is the it

rate of So that reflective XX% on-prem, growth what's colo. is in happening hyperscale,

our is view the entire it market. So of

the better around some of Multifamily first, residential. residential starts as of kind And though really And in slowdown single-family bit had a what in the Single-family levels we're seen a stronger and result world. in of clearly to QX. seeing in underlying seen faster grow QX. point it happened the under construction actually we've slowdown are wallet businesses yes, the we a a is single saw market do the than definitely slowdown in yes, of our market record quite doing. we would residential, think were expect we QX. the what family, and X% frankly, To that around that than in U.S. up have But little units

market But China housing read not significantly, company down as as in acutely, well. our point, in about piece biggest a starts most of and the it of everybody coming and see going residential Many data you is Europe. market. France has quite your You of out Germany where are quite to on frankly, what's see the residential

to is new built, homes homes solutions. higher add latest thing in as they're of meetings is we've about Europe the we're standards, think are around or the U.S. that standards in I content standards the prior And that other electrical that would meet in smart built more that UL the see other of or all for smart they one we being I requirements and the seeing in talked IEC things putting

for, offsetting in hold And somewhat that a housing new fact their that seeing decline much on is to new the content are accounting are legacy And quite in of in units homes. higher higher of as general so market electrical people percentage frankly, we homes new the homes.

seeing end so that residential. And yes, the big question, other business. up. once weakened enough in in offset those to our market's no the But we're residential We're in again, seeing it strength declines has

Thomas Okray

Yes.

to Just bit, one. [indiscernible] little that a Nigel, on

look and perspective. residential actually question we're overall you If sector, year-to-date our year-to-date at from slowing positive a electrical no down, but for

Craig Arnold

I of think unit others. better, they a content would And being would for the function be volumes as electrical higher, it's prices being more down

Nigel Coe

of through of can you got years? sneak there is the How I Or bit I I more XXXX. we're I implications here in that there that light. is X.X growth running for one think X.X. prior in. know XXXX about Yes, X sort know like uplift X to more step-up that? that that to do margins? a The big That's from support XX% a just we But question. are parts of be the target ramp Does from for if think do linear eMobility to you've expect come and couple it that next to -- does questions. 'XX? X.X, Does any margin that's

Craig Arnold

that I launch works if launch. think as a you these platforms that are in don't in see new a I revenue function know they this when would of you big a you'll the Yes, expect change vehicles aware, when market platform, as well

tend to linear. being say does And in space to the opposed so of be the volume I chunky that as would kind

growth. see more revenue. a a pattern the it's in the change will launches, function linear Once of you step you'll kind But the of and market, in once launches see vehicle program first then of

now and growth on between And business growth. we won. a platforms but of grow. XXXX this we've that our some will that we It's that of talked strong for so think chunky see segment new XXXX, eMobility about guidance, we in will to these numbers as our very some the expect still be in And about outlook growth bringing strong

Operator

Berenberg. from line from Buller of our is And question Phil next the

Philip Buller

Craig, prior follow the just to up the to of on gave you some answers questions.

and about attribute think which how earlier much between U.S. the and divergence how would of utilities this which the Jeff's the talked towards which of versus I question? much globally, elsewhere think is to U.S. You megatrends how being to just question you the I existing but we differences, gave data is Europe, you the I weighting get, the answer the current center in Julian's answered than much larger is economic

wondering is guess there's if I a share. this, third to part I'm which market

please? know if don't So on you can or share U.S. Europe, see changes the I you in market comment that

Craig Arnold

is European I would given in What tell When bouncing things would with I No. terms, market you respect in in Yes. business look our to a that quarter, simple our growth any take find at around. could no share. you you say

But the if or you the numbers say mega scale But and be think find is it mega our at at stack quite I'd that I a peers, the is projects X-year that look projects on driving and to comparable. our you stack versus differences. of X-year you'd growth look our revenues

not a penetration we which data player a versus It as it, these in, about portfolio the data of centers. I in We center. well in in in play today MOEM We some but equipment. data play broad lot a is we being very centers, Europe. have and of our industrial where play other let's Europe is in don't call as segments, we're talked big where say, Americas in

in We play in as utilities, utility market. the player but we're big not a

So in we supported by complete broader, are megatrends. Americas just solutions more set that a the of have these

driving other verticals, are investments the economy these the markets, big into growth being industrial difference is stimulus in the outside that Act. in chips it's all essentially pumped facilities, And reindustrialization utility of growth. again, And same and once outside investments that U.S. CHIP driving dollars is, in the

also And so of being turbocharged you're government finding by these trends broader kind stimulus spending.

Philip Buller

or lay was if quite way I EU in Industry U.S. that take these that on Or follow-up they'll to the think egg is Act policies as so optimistic? ever green days? the Just like Do Net a a your deal current an about year Zero Obviously, do? may. everyone meaningful ones ago. you a the What's quickly, that and bullish

Craig Arnold

No.

they're mean, I even mean in more I putting behind of importantly, dollars think they're low-carbon a government and demonstrated society. to many And I place than moving right? green their as these towards the both commitment the U.S., putting -- technologies, essentially think the regulatory drive I European changes in just it adoption has ways to

in see that Europe of and in think there's you the So are different in in benefits lot today. Europe on lot There's holding can I some a would but space. a -- challenges today getting imagine, as you that that back the a way on of fronts lot of ultimately going

Europe much like more places And as -- has more Germany. we talk the world manufacturing about engine a been dramatically. slowed for markets clearly And those the much have in segment, of is manufacturing

where we but participate, -- for So example, dramatically. about Europe think data also centers, business center in data is our up

that it's in of being Europe. case, megatrends benefits some being energy those But dramatically the of these where the are issues it's held we different. back. in other kind of up some Those business markets, of businesses. And by have play is in because quite we legacy energy some transition in structural these not transition markets where So overwhelmed showing are up mix

Philip Buller

finally, But squeeze think the quick There's months, change range one no on to a if very year. at XX% XX% the you're just it. the may Got I one And XX% Aerospace. I and for bit. X to in

So moderation that a from implies a bit QX of in somewhere.

talk can it's assume defense what's on something happening you perhaps or I else about there's there, So that. please? going

Craig Arnold

Yes, Aerospace. yes. a -- overread anticipate in terms of wouldn't -- think in don't I that don't slowdown we I

our orders Backlog grow. continue in about grow. that remarks As to continues we talked the prepared to

very We see expect I attractive QX. there. that market longer-term quite Aerospace still being for implied not an are kind in to overread So would of growth number pleased much with and

Operator

O'Dea is Fargo. Wells Our Joe question from next from

Joseph O'Dea

which of mega the on they projects it high have the means in interested that's of as evaluating can't to and just as you're there. of maybe out it that the win opportunity thinking magnitude kind rates I'll keep opportunities even I'm the historically because how to be one. degree

we exposure these you XX, position think you at yourself and competitors are of where bigger to directing that market? well. forward so get it's some in you as good, rates those your some to your win dollars higher where sure not And moving sort the verticals verticals as time I'm over inspiring investment for when more most if to about that least outpace want the of best maybe much outlined Slide invest on And to

Craig Arnold

I would it's in quite opposite. many say that the ways,

complicated and where to the rate will is well win about that tend garner our and win more do today the and bigger higher sophisticated more a the the project, we likely share. think Eaton as you it the project, If company tends be to where higher, a

deliver today, capability we have a the have low mega of and you would place. voltage, where the to a projects versus historical win big most So much better today, rate about the once than everything in think if in in medium again, America most you voltage of be our solution, about taken because mega our higher. projects if on against total underlying win companies market project rate competing share, ability be market our we're that our higher It between, a mega would complete North think these

capacity doubt, companies most so the tell such that an space. And attractive are. it's are that is dynamic without for the constraint a I struggling you with competitive we that same yes, the will most part,

So coming highly today, highly, underlying because unlikely a dynamics do in to there's something share, respect enough to simply and would not that market somehow capacity around with the disruptor change doing it.

you need you a to about secondly, projects, of has bring you. mega you if the need home projects who trust who capability. the a company then scale And and size these for can company And you upon rely these pedigree, and essentially think the

trialing do that stuff of it's companies tend we to place mission-critical. is And that new. testing not kind would somebody the or The you customers or find

Operator

Next Brett question Mizuho. from Linzey from is

Brett Linzey

you've provide there versus the Is to Just the in capitalized? any about you're is going some to program quarterly And like the the with to this done to some programs think billion of what's restructuring investment. a way back past? of going be guidance on expense mix

Craig Arnold

capacity the than No, online. not particular can that on would would comes quarterly today, intend we other certainly let clarity provide when new to say or any guidance I we know you

perfectly that's think fair. I

of other mix be our going kind embedded expense. the capital I going investment. it's thing think There and yes, go That's we a about of But is as a embedded to all -- is that forward. would in to guidance big be

But else it's and not number. denominator, and give a going solve company gotten it's everything we of about order gotten of bottlenecks. X.X% big as a X% number revenue so bigger, ability the bigger in spent may the to pop be to CapEx. has That But revenue historically magnitude. has lot us -- our to It's have going to up

you're things, the CapEx in our X.X spend movement talking But point of about of terms maybe scheme here. big in

once there's be purposes. some with yes, So we in numbers for again, expense of talked embedded kind going kind But of as to incremental planning it associated that about the that well. all of XX%

Yan Jin

of end Okay. guys. I appreciate questions. We call. everybody's reached the the Thanks,

need Thanks you follow-up us. more will to team with As for questions. always, if joining day, a a guys. Have do have our good call you guys

Craig Arnold

Thank you.

Thomas Okray

you. Thank

Operator

conclude and you for Teleconference And does your you. Thank and participation using Thank AT&T ladies our service. that gentlemen, for for conference today.

disconnect. now You may

Eaton (ETN) 31 Oct 232023 Q3 Earnings call transcript