Eaton Corporation plc stock research
FY2023 Q4
Eaton (ETN) Gross Margin — Quarter Ended Dec 31, 2023
Revenue grew from both the prior quarter and the same quarter a year earlier, and gross profit rose over the year-ago period while staying stable sequentially. Cost of revenue increased relative to the year-ago quarter but was flat versus the prior quarter, driving a slight improvement in gross margin compared with both periods.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
Revenue grew from both the prior quarter and the same quarter a year earlier, and gross profit rose over the year-ago period while staying stable sequentially. Cost of revenue increased relative to the year-ago quarter but was flat versus the prior quarter, driving a slight improvement in gross margin compared with both periods.
- Gross profit held steady quarter over quarter despite a small increase in revenue, which lifted gross margin slightly. Relative to last year, gross profit rose at a faster pace than cost of revenue, resulting in a significantly improved gross margin.
- Compared with the preceding quarter, gross margin improved slightly as revenue edged higher while cost of revenue remained unchanged. Versus the same quarter one year earlier, gross margin strengthened materially, driven by a larger increase in gross profit relative to cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
37.5%
Gross profit
$2.2B
Revenue
$6.0B
Cost of revenue
$3.7B
Quarter-over-quarter change
+0.1 pts
Year-over-year change
+3.3 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $5.5B | $1.9B | $3.6B | 34.4% |
| Jun 30, 2023 | $5.9B | $2.1B | $3.7B | 36.1% |
| Sep 30, 2023 | $5.9B | $2.2B | $3.7B | 37.3% |
| Dec 31, 2023 | $6.0B | $2.2B | $3.7B | 37.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
+0.1 pts
Year-over-year change
Dec 31, 2022
+3.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Gross profit held steady quarter over quarter despite a small increase in revenue, which lifted gross margin slightly. Relative to last year, gross profit rose at a faster pace than cost of revenue, resulting in a significantly improved gross margin.
Compared with the preceding quarter, gross margin improved slightly as revenue edged higher while cost of revenue remained unchanged. Versus the same quarter one year earlier, gross margin strengthened materially, driven by a larger increase in gross profit relative to cost of revenue.
Monitor whether cost of revenue can remain stable if revenue continues to grow, as it is the key variable affecting gross margin direction.