[Eaton Second Quarter 2025 Performance Overview](index=1&type=section&id=Eaton%20Second%20Quarter%202025%20Performance%20Overview) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) 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](index=1&type=section&id=Management%20Commentary) 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 growth[6](index=6&type=chunk) - The company is capitalizing on megatrends including digitalization, electrification, reindustrialization, and increased defense spending through investments in technology, acquisitions, and partnerships[6](index=6&type=chunk) [Financial Guidance](index=1&type=section&id=Financial%20Guidance) [Full Year 2025 Guidance](index=1&type=section&id=Full%20Year%202025%20Guidance) 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 outlook[7](index=7&type=chunk) [Third Quarter 2025 Guidance](index=3&type=section&id=Third%20Quarter%202025%20Guidance) 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](index=3&type=section&id=Business%20Segment%20Performance) [Electrical Americas](index=3&type=section&id=Electrical%20Americas) 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](index=3&type=section&id=Electrical%20Global) 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](index=3&type=section&id=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](index=3&type=section&id=Vehicle%20and%20eMobility) 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 decline[14](index=14&type=chunk) - eMobility segment sales were **$182 million**, down **4%** year-over-year, and the segment recorded an operating loss of **$10 million**[15](index=15&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) 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](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) 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](index=8&type=section&id=Notes%20to%20Financials) [Acquisitions and Divestitures](index=9&type=section&id=Acquisitions%20and%20Divestitures) 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 segment[30](index=30&type=chunk) - 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 segment[32](index=32&type=chunk) - 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 segment[33](index=33&type=chunk) [Restructuring Program](index=11&type=section&id=Restructuring%20Program) 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 2026[35](index=35&type=chunk) 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** |

Company Overview - Eaton Corporation plc is a multinational power management company that provides electrical, hydraulic, and mechanical power solutions for various industrial and commercial applications [2] - The company focuses on smart power management, helping customers utilize power more efficiently and sustainably [3] Financial Performance - Eaton reported impressive Q1 2025 results, with revenue increasing by 7.3% to $6.38 billion and a 9% organic growth rate, driven by strength in the Electrical and Aerospace segments [4] - Adjusted EPS climbed 13% to a record $2.72, with segment margins reaching 23.9% [4] - The company has elevated its full-year guidance, anticipating 7.5–9.5% organic growth and adjusted EPS of $11.80–12.20 [4] - Over the past twelve months, Eaton generated $25 billion in revenue, with operating profits of $4.8 billion and net income of $3.9 billion [4] Market Expectations - Analysts forecast adjusted earnings of $2.92 per share on revenue of $6.91 billion for the upcoming second-quarter earnings announcement on August 5, 2025 [3] - This forecast indicates a 7% increase in earnings year-over-year and a 9% rise in sales compared to the previous year's figures of $2.73 per share and $6.35 billion in revenue [3] Historical Performance Trends - Historically, Eaton's stock has exceeded performance expectations following earnings releases, rising 58% of the time with a median one-day increase of 3.6% and a maximum observed surge of 8% [3] - Over the past five years, there have been 19 earnings data points collected, with positive one-day returns occurring approximately 58% of the time [6] - The median of the 11 positive returns was 3.6%, while the median of the 8 negative returns was -1.6% [6] Trading Strategies - Event-driven traders can leverage historical patterns for competitive advantage, whether by positioning before earnings or reacting to movements post-release [5] - A strategy involving the correlation between short-term and medium-term returns following earnings can be effective, particularly if the 1D and 5D returns show strong correlation [7]

Core Viewpoint - Eaton Corporation (ETN) is anticipated to show improvements in both revenue and earnings for Q2 2025, with a prior earnings surprise of 0.74% in Q1 [1]. Group 1: Q2 Earnings Expectations - The Zacks Consensus Estimate for ETN's revenues is $6.93 billion, reflecting a 9.09% increase year-over-year [2]. - The consensus estimate for earnings per share (EPS) is $2.92, indicating a 6.96% increase from the previous year [2]. Group 2: Factors Driving Q2 Performance - Ongoing investments in research and development are enhancing product quality and fostering new solutions, which is expected to drive earnings growth with organic revenue growth projected at 6-8% [3]. - Growth is being fueled by electrification, global megatrends, energy transition, and reindustrialization, impacting approximately 75% of Eaton's end markets [4]. - Increased demand from power-intensive AI data centers is creating new opportunities that support earnings [4]. - A broad product portfolio is leading to strong order wins and a growing backlog, which provides a reliable future revenue pipeline [5]. - Share repurchases funded by free cash flow are likely to positively influence Q2 earnings [6]. Group 3: Earnings Prediction Model - The Zacks model indicates a strong likelihood of an earnings beat for Eaton, supported by a positive Earnings ESP of +0.33% and a Zacks Rank of 3 [7].

Eaton currently has an average brokerage recommendation (ABR) of 1.70, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 23 brokerage firms. An ABR of 1.70 approximates between Strong Buy and Buy. Of the 23 recommendations that derive the current ABR, 14 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 60.9% and 8.7% of all recommendations. Brokerage Recommendation Trends for ETN The recommendations of ...

Core Insights - Analysts forecast Eaton (ETN) to report quarterly earnings of $2.92 per share, reflecting a year-over-year increase of 7% and revenues of $6.93 billion, which is a 9.1% increase compared to the previous year [1] Earnings Estimates - The consensus EPS estimate has remained unchanged over the past 30 days, indicating that analysts have not revised their projections during this period [2] - Revisions to earnings projections are crucial for predicting investor behavior and are strongly linked to short-term stock price performance [3] Key Metrics Forecast - Estimated 'Net Sales- eMobility' is projected at $191.13 million, showing a year-over-year change of +1.1% [5] - 'Net Sales- Aerospace' is expected to reach $1.03 billion, indicating a +7.9% change from the prior year [5] - 'Net Sales- Vehicle' is forecasted at $674.75 million, reflecting a -6.7% change from the previous year [5] - 'Net Sales- Electrical Global' is anticipated to be $1.70 billion, with a +5.9% year-over-year change [6] - 'Net Sales- Electrical Americas' is projected to reach $3.31 billion, indicating a +15.2% change [6] Segment Operating Profit Estimates - 'Segment operating profit (loss)- Aerospace' is expected to be $239.31 million, up from $206.00 million in the same quarter last year [6] - 'Segment operating profit (loss)- Vehicle' is forecasted at $108.81 million, down from $130.00 million in the same quarter last year [7] - 'Segment operating profit (loss)- Electrical Global' is projected to be $327.71 million, compared to $305.00 million in the same quarter last year [7] - 'Segment operating profit (loss)- Electrical Americas' is expected to reach $975.36 million, up from $859.00 million in the previous year [8] Stock Performance - Over the past month, Eaton shares have returned +8.9%, outperforming the Zacks S&P 500 composite's +2.7% change [8] - Currently, ETN holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [8]

Core Viewpoint - ChargePoint is experiencing significant stock volatility, but underlying fundamentals are improving, indicating a disciplined strategy for long-term growth in the electric vehicle (EV) market [2][12]. Financial Performance - ChargePoint's non-GAAP gross margin increased to 31% in Q1 FY 2026, up from 24% in the same quarter last year, reflecting improved profitability [3]. - Revenue from subscription services grew 14% year-over-year to $38.0 million, highlighting the importance of a stable income stream from its software-as-a-service (SaaS) model [5]. - Non-GAAP operating expenses were reduced by 15% year-over-year, demonstrating financial discipline and cost management [6]. Market Strategy - ChargePoint is targeting the European fleet market, launching products like the Flex Plus home charger and Driver Management Solution to capitalize on this opportunity [7]. - A partnership with Arval, a subsidiary of BNP Paribas, positions ChargePoint as the preferred charging solution for new EV contracts in France and Germany, enhancing market access [8]. Technological Advancements - ChargePoint is developing more efficient AC charging technology and collaborating with Eaton on vehicle-to-everything (V2X) technology, expanding its role in energy management [9]. Key Metrics to Monitor - Subscription revenue growth is crucial for ongoing profitability, with a focus on maintaining double-digit growth [11]. - Sustaining a gross margin above 30% in future quarters will confirm the new profitability level [11]. - Continued cost control is essential for building investor confidence [11]. - Updates on the Arval partnership and initial sales volumes will serve as indicators of success in the European market [11].

Group 1 - The analysis reviews the top 10 of 16 taxable closed-end funds (CEFs) offered by Eaton Vance, indicating a positive experience for investors [1] - The author expresses a desire to expand ownership in these funds, suggesting confidence in their performance [1] - David A. Johnson, the founder of Endurance Capital Management, has over 30 years of investment experience and holds multiple advanced degrees in finance and business [1] Group 2 - The article does not provide specific financial metrics or performance data related to the funds discussed [2][3]

Core Viewpoint - Eaton (ETN) has shown strong stock performance recently, with a +10.6% return over the past month, outperforming the S&P 500 composite's +4.6% and the Zacks Manufacturing - Electronics industry's +12% [1] Earnings Estimate Revisions - The consensus earnings estimate for Eaton is $2.92 per share for the current quarter, reflecting a year-over-year increase of +7% [4] - For the current fiscal year, the consensus earnings estimate is $12.02, indicating a change of +11.3% from the previous year [4] - The next fiscal year's consensus earnings estimate is $13.62, showing a +13.3% change from the prior year [5] - The Zacks Rank for Eaton is 3 (Hold), influenced by recent changes in earnings estimates and other related factors [6] Projected Revenue Growth - The consensus sales estimate for the current quarter is $6.93 billion, representing a year-over-year change of +9.1% [10] - For the current fiscal year, the sales estimate is $27.37 billion, indicating a +10% change, while the next fiscal year's estimate is $29.57 billion, reflecting an +8% change [10] Last Reported Results and Surprise History - Eaton reported revenues of $6.38 billion in the last quarter, a year-over-year increase of +7.3%, with an EPS of $2.72 compared to $2.4 a year ago [11] - The company exceeded consensus revenue estimates once in the last four quarters and beat consensus EPS estimates in all four quarters [12] Valuation - Eaton has a Zacks Value Style Score of D, indicating it is trading at a premium compared to its peers [16]

Core Insights - Eaton has significantly outperformed the S&P 500, delivering total returns of 57.8% since the last article [1] Investment Strategy - A well-diversified portfolio should be constructed with a core foundation of a high-quality low-cost S&P 500 fund [1] - For those who can tolerate short-term risks, an overweight position in the technology sector is recommended, as it is believed to be in the early stages of a long-term secular bull market [1] - Large oil and gas companies that provide strong dividend income and growth are suggested for dividend income [1] - A top-down capital allocation approach is recommended, tailored to individual investor situations, including factors like age, retirement status, risk tolerance, income, net worth, and goals [1]

Company Performance - Eaton's stock closed at $373.66, reflecting a -1.31% change from the previous day's closing price, underperforming the S&P 500 which gained 0.14% [1] - Over the past month, Eaton's stock has increased by 14.31%, outperforming the Industrial Products sector's gain of 7.52% and the S&P 500's gain of 5.35% [1] Upcoming Earnings - Eaton's earnings report is anticipated on August 5, 2025, with expected earnings of $2.92 per share, indicating a year-over-year growth of 6.96% [2] - The consensus estimate for revenue is $6.93 billion, representing a 9.09% increase compared to the same quarter last year [2] Fiscal Year Estimates - For the entire fiscal year, the Zacks Consensus Estimates predict earnings of $12.01 per share and revenue of $27.36 billion, reflecting changes of +11.2% and +9.98% respectively from the previous year [3] - Recent modifications to analyst estimates for Eaton suggest positive sentiment regarding the company's business and profitability [3] Stock Performance and Valuation - The Zacks Rank system indicates that estimate alterations are linked to stock price performance, with Eaton currently holding a Zacks Rank of 3 (Hold) [4][5] - Eaton's Forward P/E ratio is 31.52, which is higher than the industry average of 24.02, suggesting that Eaton is trading at a premium [6] - The PEG ratio for Eaton is 2.86, compared to the industry average PEG ratio of 1.98, indicating a higher valuation relative to expected earnings growth [6] Industry Context - The Manufacturing - Electronics industry, part of the Industrial Products sector, has a Zacks Industry Rank of 45, placing it in the top 19% of over 250 industries [7] - Strong individual industry groups, as measured by the Zacks Industry Rank, tend to outperform weaker groups by a factor of 2 to 1 [7]