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Eaton(ETN) - 2025 Q2 - Quarterly Results
EatonEaton(US:ETN)2025-08-05 11:01

Eaton Second Quarter 2025 Performance Overview Second Quarter 2025 Financial Highlights Eaton achieved record Q2 2025 sales of $7.0 billion, 11% higher year-over-year, with record adjusted EPS of $2.95 and 23.9% segment margins Q2 2025 Key Financial Metrics | Metric | Q2 2025 Value | Change vs Q2 2024 | | :--- | :--- | :--- | | Sales | $7.0 billion | +11% | | Organic Sales Growth | 8% | N/A | | GAAP EPS | $2.51 | +1% | | Adjusted EPS | $2.95 | +8% | | Segment Margins | 23.9% | +20 bps | | Operating Cash Flow | $918 million | N/A | | Free Cash Flow | $716 million | N/A | Management Commentary CEO Paulo Ruiz noted sustained demand, accelerating orders, and backlog growth, driven by strategic investments in high-margin markets and megatrends - Management sees sustained demand reflected in accelerating orders and backlog growth, powering organic growth6 - The company is capitalizing on megatrends including digitalization, electrification, reindustrialization, and increased defense spending through investments in technology, acquisitions, and partnerships6 Financial Guidance Full Year 2025 Guidance Eaton raised full-year 2025 guidance, projecting 8.5-9.5% organic growth, adjusted EPS of $11.97-$12.17, and segment margins of 24.1-24.5% Full Year 2025 Guidance | Metric | Guidance Range/Value | Midpoint YoY Growth | | :--- | :--- | :--- | | Organic Growth | 8.5% - 9.5% | N/A | | Segment Margins | 24.1% - 24.5% | N/A | | GAAP EPS | $10.41 - $10.61 | +11% | | Adjusted EPS | $11.97 - $12.17 | +12% | - The company highlights strong year-over-year backlog growth of 15% in Electrical and 16% in Aerospace, supporting the positive outlook7 Third Quarter 2025 Guidance For Q3 2025, Eaton anticipates 8-9% organic growth, 24.1-24.5% segment margins, and adjusted EPS between $3.01 and $3.07 Third Quarter 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Organic Growth | 8% - 9% | | Segment Margins | 24.1% - 24.5% | | GAAP EPS | $2.58 - $2.64 | | Adjusted EPS | $3.01 - $3.07 | Business Segment Performance Electrical Americas Electrical Americas achieved record sales of $3.4 billion, up 16% year-over-year, with 29.5% operating margins and 17% backlog growth Electrical Americas Q2 2025 Performance | Metric | Value | YoY Change | | :--- | :--- | :--- | | Sales | $3.4 billion | +16% | | Organic Sales Growth | 12% | N/A | | Operating Profits | $987 million | +15% | | Operating Margins | 29.5% | N/A | | Backlog Growth | 17% | N/A | Electrical Global Electrical Global reported record sales of $1.8 billion, up 9% year-over-year, with operating margins expanding to a record 20.1% and profit growing 16% Electrical Global Q2 2025 Performance | Metric | Value | YoY Change | | :--- | :--- | :--- | | Sales | $1.8 billion | +9% | | Organic Sales Growth | 7% | N/A | | Operating Profits | $353 million | +16% | | Operating Margins | 20.1% | +110 bps | | Backlog Growth | 1% | N/A | Aerospace Aerospace delivered record sales of $1.1 billion, up 13% year-over-year, with operating profit rising 17% and margins improving to 22.2% Aerospace Q2 2025 Performance | Metric | Value | YoY Change | | :--- | :--- | :--- | | Sales | $1.1 billion | +13% | | Organic Sales Growth | 11% | N/A | | Operating Profits | $240 million | +17% | | Operating Margins | 22.2% | +70 bps | | Backlog Growth | 16% | N/A | Vehicle and eMobility Vehicle segment sales declined 8% to $663 million, while eMobility sales decreased 4% to $182 million, resulting in an operating loss of $10 million - Vehicle segment sales were $663 million, down 8% year-over-year, entirely from organic sales decline14 - eMobility segment sales were $182 million, down 4% year-over-year, and the segment recorded an operating loss of $10 million15 Financial Statements Consolidated Statements of Income Q2 2025 net sales increased to $7.03 billion, but net income attributable to Eaton slightly decreased to $982 million, while adjusted earnings rose to $1.16 billion Q2 Income Statement Highlights (In millions, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Sales | $7,028 | $6,350 | | Income before income taxes | $1,186 | $1,195 | | Net income attributable to Eaton | $982 | $993 | | Diluted EPS | $2.51 | $2.48 | | Adjusted Earnings | $1,155 | $1,096 | | Adjusted EPS | $2.95 | $2.73 | Condensed Consolidated Balance Sheets As of June 30, 2025, total assets grew to $40.5 billion, and total liabilities increased to $21.9 billion, with total equity remaining stable at $18.6 billion Balance Sheet Summary (In millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $11,897 | $11,801 | | Total assets | $40,507 | $38,381 | | Total current liabilities | $9,594 | $7,857 | | Total liabilities | $21,859 | $19,851 | | Total equity | $18,647 | $18,531 | Notes to Financials Acquisitions and Divestitures Eaton strategically acquired Fibrebond for $1.45 billion and agreed to acquire Ultra PCS for $1.55 billion and Resilient Power Systems to expand its portfolio - Acquired Fibrebond Corporation on April 1, 2025, for $1.45 billion to strengthen its position in modular power enclosures for data centers and other markets. Fibrebond is reported within the Electrical Americas segment30 - Signed an agreement to acquire Ultra PCS Limited for $1.55 billion, a UK-based provider of electronic controls and solutions for the aerospace industry. The transaction is expected to close in the first half of 2026 and will be part of the Aerospace segment32 - Agreed to acquire Resilient Power Systems Inc., a developer of solid-state transformer technology, for an initial $55 million plus potential future consideration. This acquisition will be integrated into the Electrical Americas segment33 Restructuring Program Eaton's multi-year restructuring program, initiated in Q1 2024, targets $475 million in charges and $375 million in benefits by 2026, with $24 million incurred in Q2 2025 - The multi-year restructuring program, started in Q1 2024, is expected to incur total charges of $475 million and deliver mature year benefits of $375 million upon completion in 202635 Restructuring Charges by Segment (Q2 2025, In millions) | Segment | Q2 2025 Charges | | :--- | :--- | | Electrical Americas | $9 | | Electrical Global | $5 | | Vehicle | $2 | | eMobility | $2 | | Corporate | $6 | | Total | $24 |