Why Is Eaton (ETN) Down 12.9% Since Last Earnings Report?

Core Viewpoint - Eaton Corporation reported a strong Q3 2025 earnings performance, beating estimates and showing year-over-year growth, despite a recent decline in share price and a downward trend in estimates [2][12]. Financial Performance - Q3 2025 earnings were $3.07 per share, exceeding the Zacks Consensus Estimate by 0.3% and up 8.09% year over year, surpassing the company's guidance of $2.58-$2.64 [2] - Total revenues for Q3 were $6.98 billion, a 10% increase from the previous year, driven by a 7% rise in organic sales and a 3% contribution from acquired assets, although slightly below the Zacks Consensus Estimate of $7.05 billion [4] - GAAP earnings for the quarter were $2.59 per share, reflecting a 2.4% increase from $2.53 in the same quarter last year [3] Segment Performance - Electrical Americas reported sales of $3.4 billion, up 15% year over year, with operating profit of $987 million, also up 15% [5] - Electrical Global's sales reached $1.72 billion, a 9.6% increase, with operating profit of $353 million, up 16% [6] - Aerospace segment sales were $1.08 billion, up 14.1% year over year, with operating profit of $240 million, up 17% [6] - Vehicle segment sales declined to $639 million, down 8.2% year over year, with operating profit down 13% to $113 million [7] - eMobility segment sales fell to $136 million, down 18.6% year over year, resulting in an operating loss of $10 million [7] Cost and Expenses - Selling and administrative expenses increased to $1.1 billion, up 7.5% year over year [8] - Research and development expenses were $203 million, down 1.9% from the previous year [8] - Interest expenses rose to $67 million, up 13.1% year over year [8] Backlog and Future Outlook - Eaton's backlog increased by 20% in Electrical Americas, 15% in Aerospace, and 7% in Electrical Global on a rolling 12-month basis [8] - The company expects Q4 2025 earnings in the range of $2.75-$2.95 per share and anticipates organic growth of 10-12% [11] - For the full year 2025, adjusted earnings per share are expected to be between $11.97-$12.17, with organic sales growth projected at 8.5-9.5% [11] Acquisition Activity - Eaton has signed an agreement to acquire Boyd Thermal business for $9.5 billion, aimed at expanding its data center portfolio and aerospace capabilities [10]