Craig Arnold
Chairman and Chief Executive Officer at Eaton
Thanks, Yan. And we'll start on page three with highlights for the quarter. Overall, I'd say we had a strong start to the year, Q1 coming in modestly better than guidance despite additional headwinds and commodities in the quarter. We had a particularly strong quarter in our Electrical Global and Aerospace businesses, and this enables us to deliver a first quarter record for adjusted EPS of $1.62, a 13% increase over prior year. Our sales were $4.8 billion, up 10% organically from last year, and this was above the high end of our guidance range of 7% to 9%. Most of our end markets remained strong with significant strength in industrial, commercial, residential markets for electrical and commercial aftermarket and commercial OE for aerospace.
And our orders continue to accelerate, allowing us to post another record for backlog. For our combined Electrical business, orders on a rolling 12-month basis were up 30%, an acceleration from last quarter, which was up 21%. And our backlog for Electrical was up 76% compared to up 56% at the end of 2021. Our Aerospace business also had a significant increase in demand with orders on a rolling 12-month basis up 35% organically compared to up 19% at year-end. We also posted a first quarter record operating margins of 18.8%, which were at the high end of our guidance range, and 110 basis points over prior year. So overall, a good quarter with healthy end markets and solid execution in what remains a challenging environment overall.
And I'd say we're also executing well on our strategic growth initiatives as noted here on slide four. Highlighted here are several new wins tied to the secular growth trends that we're focused on. We've talked about electrification, energy transition and digitalization. Overall, we continue to see an acceleration in each of these important growth drivers and are convinced that we have the right growth strategy. In the interest of time, I'll highlight one of these recent wins, but we're happy to provide more detail on a follow-up call. While we're not at liberty to disclose the customer, we had another very significant win on an energy transition project.
This was a very large follow-on order for EV charging stations in the U.S., where we're providing the full suite of Eaton solutions, including power distribution equipment, entity storages, inverters, control automation and remote monitoring software. And we continue to work on a number of big opportunities focused on building out the needed electrical charging infrastructure given the explosive growth in electric vehicles. Now as the world continues to embrace sustainability, our technologies will continue to play a key part of this solution. Moving to page five, we summarize our key financial metrics for the quarter. And I'll just note a few highlights here. First, 3% revenue growth included 10% organic growth, offset by net headwind of 6% from acquisition and divestitures.
And this was primarily the Cobham and the Tripp Lite acquisitions, offset by the divestiture of Hydraulics. Our acquisitions added six points of growth, while the divestiture of Hydraulics reduced growth by 12 points. We also had negative FX of 1% in the quarter. Second, with 3% revenue growth, we posted solid operating leverage with 9% growth in operating profits and even stronger adjusted growth and -- adjusted EPS growth of 13%. And third, like last quarter, both adjusted EPS of $1.62 and segment operating margins of 18.8% were Q1 records. Now this strong financial performance, we think, underscores the power of our portfolio transformation and our ability to execute well under challenging operating conditions. Next on page six, we have the results of our Electrical Americas segment. Here, revenues increased 17%, including organic growth of 10%.
And just as a comparison, this compares with 5% in Q4 and 1% in Q3. The acquisition of Tripp Lite added seven points of growth. Our organic sales growth was driven by strength in industrial and residential markets overall. And as you can imagine, we're still working through supply chain constraints, which saw modest improvements in the quarter but remain challenging. Operating margins were 19.1%, down 140 basis points from last year. And this decline was driven primarily by higher input costs and supply chain inefficiencies and also some increased growth-related investments. Importantly, we were successful in fully offsetting the expected inflationary costs with price increases on a dollar basis.
However, we did not earn incremental margins on inflation, which did compress margins. As you'll see in our full year guidance, we expect this to improve, and we continue to expect 90 basis points of margin improvement for the full year. And as I mentioned in my opening comments, market demand remained strong. We had very strong order growth. Our rolling 12-month orders were up 31%, and this compares to up 20% in Q4. So things continue to accelerate. We had strength across all end markets with a range of up 28% to up 36%, and this led to a record backlog, which increased 86% on an organic basis. And on a sequential basis, we posted a large $1.3 billion increase in our backlog. Moving to page seven, we have a summary of our Electrical Global business, where we had another very strong quarter. Our organic growth was 18% with 3% headwind from currency.
We saw strength in all regions with particular strength in commercial and industrial markets. We also generated strong operating leverage, delivering record Q1 operating margins of 19.4% and incremental margins of 36%. Similar to Q4, this included some favorable mix from our exposure to growing industrial end markets, but we expect this to continue. And as we saw in the Americas, orders on a rolling 12-month basis continue to accelerate, up 27% in Q1 compared to up 22% in Q4. We had strength across all end markets with a range of up 22% to up 41%%. And I say for the fourth quarter in a row, we continued to grow our backlog by 50% or more and achieved a new record in the quarter.
So our Electrical Global business is very well positioned for continued strong growth overall. Just before we move to the industrial businesses, here's the way that I'd really summarize the performance of our combined Electrical business. The business delivered strong organic growth of 14%, built a sizable backlog which strengthens certainly our outlook for future quarters, and we improved margin by 20 basis points. So on balance, I'd say, once again, a strong quarter given the current operating environment. Let's move to page eight, where we recap our Aerospace segment. As you can see, we delivered very strong results here with revenues up 38%. This includes 15% organic growth and 25% from the acquisition of Cobham Mission Systems and 2% currency headwind.
Organic growth in the quarter was especially strong in commercial aftermarket and commercial OEM markets and certainly including business jets. Operating margins were 22.1%, up 360 basis points versus prior year, and incremental margins were solid at 32%. Another area of strength was accelerating orders, where -- which we saw a rolling 12-month orders up 35% in the quarter, and this compares to up 19% in Q4. We also ended the quarter here with a record backlog on an organic basis, up 14%. And consistent with the broader message of industry recovery, we're currently pursuing $1.3 billion of life of the program opportunities for strategic military and commercial programs, all incremental revenue, so another segment that I'd say that's very well positioned for growth today and for years to come.
Next, on page nine, we have the financial summary of our Vehicle business. Revenues were up 3%, all organic. We continue to see solid growth in North America aftermarket business and in our South America business, which was offset by weakness in global light vehicle markets. As you've read, this market continued to experience significant supply chain constraints, which certainly impacted revenues in the quarter. Just as markets here begin to see some improvements, supply chain issues tied to primarily the war in the Ukraine had a particularly large impact on this market. These constraints also contributed to operating inefficiencies in our business and a 50 basis point reduction in our operating margins. We're undertaking a number of price- and cost-related measures to offset the additional inflation, but it will certainly take some time to get these in place, but certainly something we plan to do before the end of the year. Turning to growth.
During our investor meeting earlier this year, we provided an overview of how we're transforming the business by focusing on new spaces and products not tied to the internal combustion engine. And the team is seeing good progress. We continue to see new wins, including a win with a Chinese OEM for our electronic traction control devices. We're also pursuing a pipeline worth $500 million in annual revenue for our powertrain solutions for leading EV OEMs, once again, all incremental. So I'd say that we're well on our way to transforming our legacy Vehicle business by selling into EV and other new markets. And so this business is performing very much like we expected.
Moving to page 10, we summarize our eMobility segment. Revenues increased 52%, including 7% organic and 46% from the acquisition of Royal Power with 1% negative currency. While still negative, we narrowed the operating loss in the quarter, and then we expect to generate positive margins for the year. And the outlook for this market continues to strengthen. Consistent with what you're hearing, we're actively pursuing some $2 billion of new program opportunities, and this number is really growing every quarter. I'd also note that our acquisition of Royal Power added almost $600 million of pipeline opportunities focused on their innovative solutions for terminal connectors and high-voltage busbars. As a reminder here, our area of focus in eMobility is around power distribution, power conversion and power protection.
And in the area of power protection, we had previously announced that when using our Breaktor technology with a major European OEM manufacturer. That customer just awarded Eaton with significant additional volume as they are expanding the use of our innovative technology to more of their vehicle platforms. And so once again, another segment where things are progressing very much in the way that we anticipated. Now let's turn to page 11, where we summarize our updated organic revenue and margin guidance for the year. Overall, and I'd say despite uncertainties in the broader macro environment, we continue to experience strong demand in our end markets.
We're increasing our guidance on organic growth for all segments, which results in Eaton's total organic growth stepping up from a range of 7% to 9% to our -- now our expectation of 9% to 11%. This growth outlook, I'd say, is easily supported by our ongoing growth in orders and growing backlog. For margins, we're reaffirming our full year guidance for Eaton at 19.9% to 20.3%, which represents a 120 basis point increase over 2021 at the midpoint. Note, while we've increased organic revenues, we're maintaining our margin outlook. And I'd say this is largely due to additional inflation that we've experienced in the year and expect to see for the balance of the year.
We continue to increase prices to offset inflation, but I'd say we're experiencing kind of a normal timing impact and not getting a normal margin on top of inflation. Within Electrical, we're reaffirming our margins for Electrical Americas and increasing the guidance range for Electrical Global by 10 basis points. We've also increased margins for our Aerospace business by 20 basis points and eMobility by 50 basis points. These three segments are offsetting the lower margins that we're now expecting in our Vehicle business due to margin compression from the new wave of inflation that we experienced in the quarter and expect for the year and some inefficiencies as well in our operations.
But at the midpoint, we expect to deliver record margins and to be north of 20% for the first time in Eaton's history. So on balance, a very strong year. Turning to page 12, we provide the balance of our guidance for the year. We're raising our 2022 guidance on adjusted EPS to between $7.32 and $7.72, which is 14% growth at the midpoint and reflective of what we think is going to be a strong year. We're increasing our organic growth, as we talked about, from 9% to 11%. And this is partially offset by $250 million of negative currency compared to our original guidance, where we thought currency would be flat for the year. So if you think about it, we're also offsetting approximately $0.10 of headwinds from negative currency in our earnings. But for the new FX headwinds, we'd certainly be taking our guidance up more than we did today. And we did complete $86 million of share repurchases in the quarter, and we're on track for a full year guidance of $200 million to $300 million for the year.
Lastly, our Q2 guidance includes adjusted EPS forecast between $1.78 and $1.88 for Q2; organic revenue growth between seven -- excuse me, 9% and 11%; negative currency, we think, will be $75 million; and 8% net revenue impact from M&A. For segment margins, our Q2 guidance is 19.1% to 19.5%, which is a sequential improvement of 50 basis points at the midpoint from Q1. And if you adjust for the $0.10 headwind from M&A, our year-on-year EPS growth in Q2 would be 12%, so roughly in line with our full year guidance for the year of 14%. Lastly, on page 13, I'll summarize by making here just kind of a few closing comments. As many of you heard at our Investor Day and as I highlighted at the start of the presentation, we continue to experience accelerating growth in our end markets.
The secular growth trends are really playing out very much the way we anticipated, and it's really underpinning our strategy as a global intelligent power management company. We're delivering key project wins, for sure, that are also accelerating our growth rate. These two revenue drivers are certainly showing up in our order book and growing backlog. So very much just a case of markets inflecting positively. And despite high inflation and supply chain challenges, we're growing our margins. I would also point out that based upon our Q1 actuals and Q2 guidance, we expect to generate 46% of our full year adjusted EPS in the first half, and this is in line with our historical averages of -- for first half earnings. So as the global economy continues to face unprecedented number of challenges, I'd say you can count on our team to continue to execute well to deliver our commitments in both the short and the long term.
So with that, I'll turn it back to Yan for Q&A.
