A month has gone by since the last earnings report for Eaton (ETN Quick QuoteETN - Free Report) . Shares have lost about 12.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Eaton due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.

Eaton Q3 Earnings Beat Estimates, Organic Sales Boost Revenues

Eaton Corporation (Ereported third-quarter 2025 earnings of $3.07 per share, which beat the Zacks Consensus Estimate by 0.3%.
 
The bottom line increased 8.09% year over year and surpassed the company’s guidance of $2.58-$2.64. The year-over-year rise was due to an improvement in organic sales volumes and sustained demand in the acceleration of orders.
 
GAAP earnings for the reported quarter were $2.59 per share, up 2.4% from $2.53 in the year-ago quarter. The difference between GAAP and operating earnings in the reported quarter was due to charges of 26 cents for intangible assets amortization, 11 cents for the multi-year restructuring program and 11 cents related to acquisitions and divestitures.

Eaton’s Q3 Revenues

Total quarterly revenues were $6.98 billion, which improved 10% from the year-ago period. The year-over-year growth in sales was due to 7% increase in organic sales and 3% increase from contributions from acquired assets. Quarterly revenues were a tad lower than the Zacks Consensus Estimate of $7.05 billion.

Eaton’s Segmental Details

Electrical Americas’ total third-quarter sales were $3.4 billion, up 15% year over year. The rise was due to 9% increase in organic sales, 6% growth from acquired assets. Operating profit was $987 million, up 15% year over year.

Electrical Global’s total sales were $1.72 billion, up 9.6% from the year-ago quarter. The year-over-year growth was due to an increase in organic sales by 8% and positive currency translation added 2%. Operating profit was $353 million, up 16% year over year.

Aerospace’s total sales were $1.08 billion, up 14.1% year over year. The metric was driven by positive currency translation of 1% and organic sales of 13%. Operating profit was $240 million, up 17% year over year.

Vehicle’s total sales were $639 million, down 8.2% year over year, due to a 9% decline in organic sales. Operating profit was $113 million, down 13% year over year.

eMobility segment’s total sales were $136 million, down 18.6% year over year, caused by a 20% decline in organic sales, partially offset by positive currency translation of 1%. Operating loss was $10 million against earnings of $2 million in the year-ago quarter.

Highlights of Eaton’s Q3 Release

Selling and administrative expenses were $1.1 billion, up 7.5% year over year.

Research and development expenses were $203 million, down 1.9% from the year-ago quarter’s level. Interest expenses were $67 million, up 13.1% year over year.

Eaton’s backlog, with orders, at the end of third-quarter 2025, increased 20% in Electrical Americas, 15% in Aerospace and 7% in Electric Global on a rolling 12-month basis.

Financial Update of Eaton

As of Sept. 30, 2025, the company’s cash was $0.33 billion, down from $0.55 billion as of Dec. 31, 2024.

Eaton’s long-term debt was $8.75 billion as of Sept. 30, 2025, up from $8.47 billion as of Dec. 31, 2024.

Development After Third Quarter Close

Eaton has signed an agreement to acquire the Boyd Thermal business of Boyd Corporation for $9.5 billion. This deal will expand Eaton’s existing data center portfolio and further expand its aerospace solution capabilities.

Guidance of Eaton

Eaton’s fourth-quarter 2025 earnings are expected in the range of $2.75-$2.95 per share. The company expects organic growth in the range of 10-12%.

Eaton now expects adjusted earnings per share in the range of $11.97-$12.17 for 2025. The company anticipates organic sales growth for 2025 in the range of 8.5-9.5%. Eaton expects its segment margin to be in the range of 24.1-24.5%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, Eaton has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Eaton has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Eaton is part of the Zacks Manufacturing - Electronics industry. Over the past month, A.O. Smith (AOS Quick QuoteAOS - Free Report) , a stock from the same industry, has gained 2%. The company reported its results for the quarter ended September 2025 more than a month ago.

A.O. Smith reported revenues of $942.5 million in the last reported quarter, representing a year-over-year change of +4.4%. EPS of $0.94 for the same period compares with $0.82 a year ago.

A.O. Smith is expected to post earnings of $0.84 per share for the current quarter, representing a year-over-year change of -1.2%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.5%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for A.O. Smith. Also, the stock has a VGM Score of C.