Eaton(US:ETN)2026-02-03 12:00Financial 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]