Income Statement
The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.
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Eaton Corp. plc pages available for free this week:
- Balance Sheet: Assets
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Aggregate Accruals
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Eaton Corp. plc, consolidated income statement
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of the financial data over the five-year period reveals consistent growth in key performance indicators, reflecting positive operational results and increasing profitability.
- Net Sales
- Net sales increased steadily each year, rising from US$17,858 million in 2020 to US$24,878 million in 2024. This represents a significant upward trend with a compound annual growth rate, indicating expanding market demand or successful revenue strategies.
- Cost of Products Sold
- The cost of products sold also showed a steady increase, moving from US$12,408 million in 2020 to US$15,375 million in 2024. Despite this rise, the increase in cost was proportionally less than the increase in net sales, contributing to improved gross profitability.
- Gross Profit
- Gross profit growth is evident, climbing from US$5,450 million in 2020 to US$9,503 million in 2024. This improvement reflects not only higher sales but also efficient cost management and potentially improved product mix or pricing power.
- Selling and Administrative Expenses
- These expenses increased from US$3,075 million in 2020 to US$4,077 million in 2024. Although rising, the increase is moderate when compared to gross profit growth, indicating controlled operating costs relative to revenue expansion.
- Research and Development Expense
- R&D expenses rose gradually from US$551 million in 2020 to US$794 million in 2024, demonstrating continued investment in innovation and product development which may support long-term competitiveness.
- Gain on Sale of Businesses
- Gain on sale of businesses was significant in 2020 and 2021, at US$221 million and US$617 million respectively, but declined sharply thereafter with no gains reported in 2023 and 2024. This suggests that such gains were exceptional and not a recurring source of income.
- Operating Income
- Operating income showed strong improvement, increasing from US$2,045 million in 2020 to US$4,632 million in 2024. The consistent rise indicates effective operational leverage, supported by rising sales and controlled expenses.
- Interest Expense, Net
- Interest expense remained relatively stable, with a slight decrease from US$149 million in 2020 to US$130 million in 2024. This stability suggests stable debt levels or favorable interest rates.
- Other Income (Expense), Net
- Other income (expense) showed volatility, with negative values in 2020 and 2021 turning positive in subsequent years, peaking at US$93 million in 2023 before slightly declining to US$64 million in 2024. The shift towards positive results may reflect improved non-operating activities or gains from investments.
- Income Before Income Taxes
- Income before income taxes increased consistently from US$1,746 million in 2020 to US$4,566 million in 2024, paralleling growth in operating income and other income components.
- Income Tax Expense
- Income tax expense fluctuated, rising from US$331 million in 2020 to US$768 million in 2024, with a dip in 2022. The overall increase corresponds with higher pre-tax income, though variations in effective tax rate may be implied.
- Net Income
- Net income increased steadily from US$1,415 million in 2020 to US$3,798 million in 2024, reflecting improved operational performance and profitability after tax considerations.
- Net Income for Noncontrolling Interests
- Net income attributable to noncontrolling interests remained minimal and relatively stable, showing negligible impact on consolidated earnings.
- Net Income Attributable to Eaton Ordinary Shareholders
- Net income attributable to ordinary shareholders closely mirrors net income trends, rising from US$1,410 million in 2020 to US$3,794 million in 2024, underscoring strong shareholder value creation.
Overall, the data demonstrate a positive trajectory with robust sales growth, increasing profitability, and controlled expenses. While gains from business sales contributed notably in earlier years, the core operating performance has shown sustained improvement. Investments in research and development suggest a focus on innovation to support future growth. Financial management appears stable with steady interest expenses and improving non-operating income. The tax expense trend aligns with rising earnings, and net income growth underscores increasing returns for shareholders.