Core Viewpoint - Eaton Corporation's shares declined over 3% intraday following the release of fourth-quarter results that met expectations but provided a weaker outlook for early 2026 [1] Group 1: Financial Performance - Adjusted earnings per share for the fourth quarter were $3.33, slightly above the consensus estimate of $3.32 [1] - Revenue reached a record $7.1 billion for the quarter, aligning with analyst expectations [1] - Sales increased by 13% year over year, driven by 9% organic growth, a 2% contribution from acquisitions, and a 2% benefit from foreign exchange [2] - Segment margins achieved a record of 24.9%, improving by 20 basis points from the previous year [2] - Operating cash flow totaled $2.0 billion, while free cash flow reached $1.6 billion, representing increases of 23% and 17% year over year, respectively [2] Group 2: Full-Year and Future Outlook - For the full year 2025, Eaton reported record revenue of $27.4 billion, a 10% increase year over year, with 8% organic growth and 2% from acquisitions [3] - Adjusted earnings per share for the full year rose to a record $12.07 [3] - Looking ahead, Eaton forecasts first-quarter 2026 adjusted EPS between $2.65 and $2.85, which is below the consensus estimate of $3.01 [3] - The company anticipates organic growth of 5% to 7% and segment margins of 22.2% to 22.6% for the upcoming quarter [3]

Key Takeaways ETN delivered Q4 EPS of $3.33, matching estimates, while revenues rose 13.1% year over year to $7.05B.Electrical Americas, Electrical Global and Aerospace posted double-digit sales growth.Revenues up year over year, primarily due to strong growth in organic sales.Eaton Corporation (ETN) reported fourth-quarter 2025 earnings of $3.33 per share, in line with the Zacks Consensus Estimate for the quarter. The bottom line increased 17.7% year over year and surpassed the company’s guidance of $2.75- ...

Financial Data and Key Metrics Changes - Adjusted earnings per share increased by 18% year-over-year, reaching $3.33, aligning with the midpoint of guidance [5][15] - Quarterly revenue was reported at $7.1 billion, with segment margins hitting a record of 24.9%, up 20 basis points year-over-year [5][15] - Organic growth for the quarter was 9%, driven by strength in aerospace and Electrical Americas, partially offset by weaknesses in vehicle and e-mobility [15] Business Line Data and Key Metrics Changes - Electrical Americas segment achieved organic sales growth of 15%, primarily driven by data center demand, which surged by approximately 40% [16] - Aerospace segment reported organic sales growth of 12%, with operating margin expanding by 120 basis points to 24.1% [18] - Vehicle segment experienced a decline of 13% in organic sales, primarily due to weaknesses in the North America truck and light vehicle markets [19] Market Data and Key Metrics Changes - Orders in Electrical Americas increased by 16% on a trailing 12-month basis, with total quarterly orders rising sequentially by over 18% [16] - Backlog in Electrical Americas reached $15.3 billion, growing 29% year-over-year, while aerospace backlog increased by 16% [12] - Mega project backlog rose by 30% year-over-year to $3 trillion, with data centers representing 54% of year-to-date announcements [11] Company Strategy and Development Direction - The company plans to spin off its mobility business into a separate publicly traded entity, aiming to sharpen strategic focus and optimize its portfolio [7][10] - Investments of $13 billion were announced for 2025, including acquisitions to enhance growth in high-margin markets [5][10] - The company is focused on leading, investing, and executing for growth, particularly in electrical and aerospace markets [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in double-digit growth in data center markets, supported by strong order trends and backlog [32][36] - The company anticipates continued strong demand and structural organic growth rates through 2030, driven by record backlogs and market trends [12][24] - Management acknowledged temporary headwinds from capacity ramp-up costs but remains optimistic about long-term growth potential [54][58] Other Important Information - The company is experiencing unprecedented demand, reflected in continued order acceleration and growing backlogs [24] - The transition of CFO Olivier Leonetti is planned for April 1, 2026, as part of a management transition [20] Q&A Session Summary Question: Confidence in double-digit growth in data center markets - Management highlighted strong market indicators, including a 200% year-over-year increase in industry announcements and backlog, supporting optimism for future growth [32][34] Question: Recent market developments in liquid cooling technology - Management noted that liquid cooling is growing faster than the average market, with synergies expected between cooling and power management solutions [37][38] Question: Quarterly cadence of the 2026 EPS guidance - Management explained that the first half of 2026 is expected to show lower growth due to ramp-up costs, with a stronger performance anticipated in the second half [47][50] Question: Challenges related to capacity expansion - Management acknowledged temporary headwinds from capacity expansion but expressed confidence in the long-term growth potential of the business [52][54] Question: Clarification on Electrical Americas margins - Management indicated that the impact of ramp-up costs would be more pronounced in the first half of 2026, with expectations for margin recovery later in the year [64][82]

Eaton Corporation (NYSE:ETN) Q4 2025 Earnings call February 03, 2026 11:00 AM ET Company ParticipantsAndrew Obin - Managing Director of Equity ResearchNigel Coe - Managing DirectorOlivier Leonetti - EVP and CFOPaulo Ruiz - CEOYan Jin - SVP of Investor RelationsConference Call ParticipantsChris Snyder - Research AnalystDeane Dray - Managing Director and Multi-Industry and Electrical Equipment Equity AnalystNicole DeBlase - Managing Director and Lead AnalystOperatorGood day and welcome to the Eaton fourth qua ...

Financial Data and Key Metrics Changes - Adjusted earnings per share increased by 18% year-over-year, reaching $3.33, aligning with the midpoint of guidance [5][16] - Quarterly revenue was reported at $7.1 billion, with segment margins hitting a record of 24.9%, up 20 basis points year-over-year [5][16] - Organic growth for the quarter was 9%, driven by strength in aerospace and Electrical Americas, partially offset by weaknesses in vehicle and e-mobility [16] Business Line Data and Key Metrics Changes - Electrical Americas segment achieved organic sales growth of 15%, primarily driven by data center demand, which was up about 40% [16][17] - Aerospace segment reported organic sales growth of 12%, with operating margin expanding by 120 basis points to 24.1% [19] - Vehicle segment experienced a decline of 13% on an organic basis, primarily due to weaknesses in the North America truck and light vehicle markets [20] Market Data and Key Metrics Changes - Orders in Electrical Americas increased by 16% on a trailing 12-month basis, with total quarterly orders up more than 50% [17][12] - Aerospace orders increased by 11% on a rolling 12-month basis, driven by defense OEM and aftermarket [19] - Data center orders accelerated approximately 200%, indicating strong demand in that market [4][16] Company Strategy and Development Direction - The company plans to spin off its mobility business into a separate publicly traded entity, aiming to sharpen strategic focus and optimize the portfolio [6][10] - Investments of $13 billion were announced for 2025, including acquisitions to enhance growth in key markets [5][6] - The company is focused on higher growth, higher margin businesses to improve earnings consistency and drive long-term value [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in double-digit growth in data center markets, supported by strong order trends and backlog [33][34] - The company anticipates a strong 2026, with guidance for organic growth between 7%-9% and segment margins of 24.6%-25% [24][23] - Management acknowledged the challenges of ramping up capacity but remains optimistic about long-term growth potential [54][56] Other Important Information - The backlog in Electrical Americas reached an all-time high of $15.3 billion, with a total backlog of $19.6 billion across segments [12][17] - The company is experiencing unprecedented demand, reflected in continued order acceleration and growing backlogs [25][26] Q&A Session Summary Question: Confidence in double-digit growth in data center markets - Management highlighted strong market indicators, including a 200% year-over-year increase in industry announcements and backlog, supporting optimism for future growth [33][34] Question: Quarterly cadence of the 2026 EPS guide - Management explained that the first half of 2026 is expected to show lower growth due to ramp-up costs, with a stronger performance anticipated in the second half [47][48] Question: Challenges related to capacity expansion - Management acknowledged the challenges of ramping up capacity but emphasized that investments are necessary to meet strong market demand [51][52]

Fourth Quarter 2025 Earnings Release Paulo Ruiz & Olivier Leonetti | February 3, 2026 © 2026 Eaton. All rights reserved. 1 Forward-looking statements and non-GAAP financial information This presentation or the comments we make on our call today contain forward-looking statements concerning, among other matters, first quarter and full year 2026 earnings per share, adjusted earnings per share, organic growth and segment operating margins; full year 2026 operating cash flow, free cash flow, and anticipated sha ...

Eaton Beats Wall Street's Earnings Estimates. The Stock Is Down. - Barron'sSkip to Main ContentThis copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.# Eaton Beats Wall Street's Earnings Estimates. The Stock Is Down.By [Al Root]ShareResize---ReprintsIn this article[ETN][SPX][DJI ...

Core Viewpoint - Eaton reported quarterly earnings of $3.33 per share, matching the Zacks Consensus Estimate, and showing an increase from $2.83 per share a year ago, indicating a positive earnings surprise of +0.12% [1] Financial Performance - The company posted revenues of $7.06 billion for the quarter ended December 2025, which was 0.71% below the Zacks Consensus Estimate, but an increase from $6.24 billion year-over-year [2] - Over the last four quarters, Eaton has surpassed consensus EPS estimates four times and topped revenue estimates twice [2] Stock Performance - Eaton shares have increased approximately 12.9% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.9% [3] Future Outlook - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $3.04 for the upcoming quarter and $13.54 for the current fiscal year [7] - The Zacks Rank for Eaton is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Manufacturing - Electronics industry, to which Eaton belongs, is currently in the top 40% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]

Financial Performance - Fourth quarter 2025 earnings per share reached a record $2.91, with adjusted earnings per share at $3.33, up 18% from 2024[2][8] - Sales for the fourth quarter were $7.1 billion, a record high, representing a 13% increase from the fourth quarter of 2024, driven by 9% organic growth[3][5] - Segment margins for the fourth quarter were 24.9%, a record and a 20-basis point improvement over the same period in 2024[4][8] - For the full year 2025, sales totaled $27.4 billion, up 10% from 2024, with 8% organic growth contributing to this increase[5][6] - The company reported operating cash flow of $2.0 billion and free cash flow of $1.6 billion for the fourth quarter, both records and up 23% and 17% respectively from 2024[4][7] - Total net sales for Q4 2025 reached $7,055 million, a 13.1% increase from $6,240 million in Q4 2024[25] - Net income attributable to Eaton ordinary shareholders for the year ended December 31, 2025, was $4,087 million, up 7.7% from $3,794 million in 2024[25] - Free cash flow for Q4 2025 was $1,573 million, compared to $1,342 million in Q4 2024, reflecting a 17.2% increase[29] - Eaton's operating cash flow for the year ended December 31, 2025, was $4,472 million, slightly up from $4,327 million in 2024[29] - Eaton's total assets increased to $41,251 million as of December 31, 2025, up from $38,381 million in 2024[26] Future Expectations - For 2026, the company expects earnings per share to be between $11.57 and $12.07, representing a 13% increase at the midpoint over 2025[8][10] - The company anticipates organic growth of 7-9% and segment margins of 24.6-25.0% for 2026[15] - The company expects adjusted earnings per ordinary share for 2026 to be between $13.00 and $13.50, reflecting strong future performance expectations[29] Segment Performance - The Electrical Americas segment achieved record sales of $3.5 billion in the fourth quarter, up 21% from the same period in 2024[10] - Aerospace segment sales reached a record $1.1 billion, up 14% from the fourth quarter of 2024, with operating margins of 24.1%[14] - Eaton's segment operating profit for Q4 2025 was $1,760 million, a 14.2% increase from $1,542 million in Q4 2024[25] Acquisitions and Strategic Moves - The acquisition of Fibrebond Corporation for $1.43 billion is expected to enhance Eaton's capabilities in modular power enclosures, with Fibrebond reporting sales of approximately $378 million for the twelve months ended February 28, 2025[32] - Eaton plans to acquire Boyd Thermal for $9.5 billion, which is expected to close in Q2 2026, enhancing its position in thermal components for data centers[36] - The company announced plans to spin off its Mobility business, which includes Vehicle and eMobility segments, by the end of Q1 2027[38] Restructuring and Charges - Eaton has incurred $335 million in charges since the inception of its multi-year restructuring program, which is expected to total $475 million by completion in 2026[42] - The restructuring program is anticipated to yield mature year benefits of $375 million once fully implemented[42] - For the three months ended December 31, 2024, total restructuring charges after income taxes amounted to $56 million, translating to $0.14 per diluted share[43] - The total restructuring charges for the year ended December 31, 2024, were $202 million, with a net amount after income taxes of $160 million[43] - The company expects additional expenses of $102 million related to workforce reductions and $38 million for plant closing and other costs as part of the restructuring program[42] Intangible Assets - The total intangible asset amortization expense for the twelve months ended December 31, 2025, was $486 million, with a net amount after income taxes of $384 million[44] - The intangible asset amortization expense for the three months ended December 31, 2025, was $121 million, compared to $107 million for the same period in 2024[44] - The income tax benefit related to intangible asset amortization for the twelve months ended December 31, 2025, was $101 million[44] - The Electrical Global segment incurred $24 million in restructuring charges for the three months ended December 31, 2025, while the Aerospace segment incurred $10 million[43] - The Vehicle segment reported a restructuring credit of $10 million for the three months ended December 31, 2025[43]

Core Insights - Eaton Corporation reported record fourth quarter 2025 earnings per share of $2.91, with adjusted earnings per share reaching $3.33, also a record [1][4] - The company achieved fourth quarter sales of $7.1 billion, marking a 13% increase from the same period in 2024, driven by organic sales growth of 9% [2][3] - For the full year 2025, Eaton's sales totaled $27.4 billion, a 10% increase from 2024, with segment margins reaching a record 24.5% [3][4] Financial Performance - Fourth quarter operating cash flow was $2.0 billion and free cash flow was $1.6 billion, both records and up 23% and 17% respectively from 2024 [2][5] - For the full year 2025, operating cash flow was $4.5 billion and free cash flow was $3.6 billion, reflecting increases of 3% and 1% respectively over 2024 [5] - The company reported net income of $1.133 billion for the fourth quarter, up from $972 million in the previous year [23] Business Segments - The Electrical Americas segment achieved record sales of $3.5 billion in the fourth quarter, up 21% from 2024, with operating profits of $1.0 billion [9] - The Aerospace segment also reported record sales of $1.1 billion, a 14% increase from the previous year, with operating profits of $268 million [13] - The Vehicle segment experienced a decline in sales to $586 million, down 9% from the fourth quarter of 2024 [15] Strategic Outlook - Eaton's CEO highlighted the company's strategy of "Lead, Invest and Execute for Growth," which has driven strong demand and backlog growth [3][6] - The company anticipates organic growth of 7-9% and segment margins of 24.6-25.0% for the full year 2026 [8] - Eaton plans to pursue a spin-off of its Mobility business, which includes its Vehicle and eMobility segments, expected to be completed by the end of Q1 2027 [38]