We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Eaton's Q2 Earnings Beat on Strong Electrical Sales, Outlook Raised
Read MoreHide Full Article
Key Takeaways
Eaton's adjusted EPS rose 6.8% to $3.15, while revenues climbed 21.4% to $8.53 billion.
Electrical backlog rose 43%, fueled by strong orders, data-center demand and acquisition gains.
ETN raised 2026 organic growth guidance to 11-13% and adjusted EPS to $13.40-$13.60.
Eaton Corporation plc (ETN - Free Report) reported second-quarter 2026 adjusted earnings of $3.15 per share, up 6.8% year over year and 2.27% above the Zacks Consensus Estimate of $3.08. Revenues of $8.53 billion increased 21.4% and surpassed the consensus mark of $8.01 billion by 6.57%.
GAAP earnings were $2.11 per share, down 15.9% from $2.51 a year ago. The gap between GAAP and adjusted results reflected 50 cents per share of intangible amortization, 49 cents of acquisition and divestiture charges, and 5 cents tied to restructuring.
ETN's Organic Growth Drives Revenues
Second-quarter total revenues were $8.53 billion, surpassing the Zacks Consensus Estimate of $8 billion by 6.57%.
Second-quarter sales growth included a 14% increase in organic revenues and a 7% contribution from acquisitions. Management said data centers remained a major growth engine, while demand was also robust across other served markets.
The quarter benefited from double-digit organic growth in both electrical businesses and strong acquisition contributions. Electrical-sector backlog rose 43% year over year, while Aerospace backlog advanced 28%, underscoring sustained demand across key end markets.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
Electrical Americas sales reached $3.95 billion, up 18% organically. Operating profit rose 10% to $1.09 billion, while margin was 27.5%, improving 190 basis points sequentially.
Orders in the segment increased 41% on a rolling 12-month basis, and backlog grew 33% from June 2025. These metrics highlight continued strength in Eaton's largest business and provide visibility into future activity.
Electrical Global sales climbed 44% to $2.52 billion. Organic growth was 18%, Boyd Thermal added 25%, and foreign exchange contributed 1%. Operating profit increased 41% to $499 million, with margin improving 60 basis points sequentially to 19.8%.
The segment's backlog surged 103%, while rolling 12-month orders rose 33% organically. The combined Electrical businesses maintained a book-to-bill ratio of 1.2, meaning orders continued to exceed completed sales.
Aerospace sales rose 13% to $1.22 billion, supported by 7% organic growth and a 6% acquisition contribution. Operating profit advanced 16% to $278 million, while margin expanded 60 basis points year over year to 22.8%. Rolling 12-month orders increased 17%.
Mobility sales were $841 million. A 2% organic decline was offset by a 2% benefit from currency translation, leaving reported sales roughly flat year over year.
Operating profit increased 7% to $109 million, and margin expanded 90 basis points to 13.0%. Eaton also agreed to separate Mobility through a Reverse Morris Trust transaction with Dana, which is expected to close in the first quarter of 2027.
ETN's Margins Face Acquisition-Related Pressure
Total segment margin was 23.1%, 10 basis points above the high end of management's guidance but 80 basis points below the prior-year quarter. Acquisition-related effects and higher amortization weighed on reported profitability.
Selling and administrative expense was $1.24 billion, research and development expense was $227 million, and net interest expense was $201 million. The company also recorded $24 million of restructuring charges during the quarter.
Eaton's Cash Flow Supports Ongoing Investment
Operating cash flow was $1.13 billion, up 23% year over year. After $253 million of capital expenditures, free cash flow totaled $874 million, an increase of 22%.
At June 30, 2026, cash was $483 million compared with $622 million at year-end 2025. Long-term debt was $18.51 billion, up from $8.76 billion, reflecting the funding impact of recent acquisitions.
ETN Raises Full-Year Organic Growth Guidance
For 2026, Eaton now expects organic growth of 11-13% (up from prior range of 9-11%), segment margin of 24.1-24.5% and adjusted earnings of $13.40-$13.60 per share (up from prior range of $13.05-$13.50). The midpoint of the earnings range implies 12% growth from 2025.
For the third quarter, management projects organic growth of 13.5-15.5%, segment margin of 24.6-25% and adjusted earnings of $3.46-$3.56 per share. The outlook reflects expectations for continued demand momentum and stronger profitability.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter 2026 adjusted earnings of $1.03 per share beat the Zacks Consensus Estimate of 96 cents by 7.29%.
The long-term (three to five years) earnings growth rate is pinned at 12%. The Zacks Consensus Estimate of $3.74 for 2026 earnings per share has declined 2.86% year over year.
ABB Ltd. (ABBNY - Free Report) reported quarterly earnings of 66 cents per share, lagging the Zacks Consensus Estimate of 79 cents by 16.46%.
The long-term earnings growth rate is pinned at 17.67%. The Zacks Consensus Estimate for 2026 earnings per share has increased 51.81% year over year.
AZZ (AZZ - Free Report) reported quarterly earnings of $1.85 per share, beating the Zacks Consensus Estimate of $1.63 by 13.5%.
The Zacks Consensus Estimate for fiscal 2026 earnings per share has increased 12.12% year over year.
View the Zacks #1 Rank List
Image: Bigstock
Eaton's Q2 Earnings Beat on Strong Electrical Sales, Outlook Raised
Key Takeaways
Eaton Corporation plc (ETN - Free Report) reported second-quarter 2026 adjusted earnings of $3.15 per share, up 6.8% year over year and 2.27% above the Zacks Consensus Estimate of $3.08. Revenues of $8.53 billion increased 21.4% and surpassed the consensus mark of $8.01 billion by 6.57%.
GAAP earnings were $2.11 per share, down 15.9% from $2.51 a year ago. The gap between GAAP and adjusted results reflected 50 cents per share of intangible amortization, 49 cents of acquisition and divestiture charges, and 5 cents tied to restructuring.
ETN's Organic Growth Drives Revenues
Second-quarter total revenues were $8.53 billion, surpassing the Zacks Consensus Estimate of $8 billion by 6.57%.
Second-quarter sales growth included a 14% increase in organic revenues and a 7% contribution from acquisitions. Management said data centers remained a major growth engine, while demand was also robust across other served markets.
The quarter benefited from double-digit organic growth in both electrical businesses and strong acquisition contributions. Electrical-sector backlog rose 43% year over year, while Aerospace backlog advanced 28%, underscoring sustained demand across key end markets.
Eaton Corporation, PLC Price, Consensus and EPS Surprise
Eaton Corporation, PLC price-consensus-eps-surprise-chart | Eaton Corporation, PLC Quote
Eaton's Segment Details
Electrical Americas sales reached $3.95 billion, up 18% organically. Operating profit rose 10% to $1.09 billion, while margin was 27.5%, improving 190 basis points sequentially.
Orders in the segment increased 41% on a rolling 12-month basis, and backlog grew 33% from June 2025. These metrics highlight continued strength in Eaton's largest business and provide visibility into future activity.
Electrical Global sales climbed 44% to $2.52 billion. Organic growth was 18%, Boyd Thermal added 25%, and foreign exchange contributed 1%. Operating profit increased 41% to $499 million, with margin improving 60 basis points sequentially to 19.8%.
The segment's backlog surged 103%, while rolling 12-month orders rose 33% organically. The combined Electrical businesses maintained a book-to-bill ratio of 1.2, meaning orders continued to exceed completed sales.
Aerospace sales rose 13% to $1.22 billion, supported by 7% organic growth and a 6% acquisition contribution. Operating profit advanced 16% to $278 million, while margin expanded 60 basis points year over year to 22.8%. Rolling 12-month orders increased 17%.
Mobility sales were $841 million. A 2% organic decline was offset by a 2% benefit from currency translation, leaving reported sales roughly flat year over year.
Operating profit increased 7% to $109 million, and margin expanded 90 basis points to 13.0%. Eaton also agreed to separate Mobility through a Reverse Morris Trust transaction with Dana, which is expected to close in the first quarter of 2027.
ETN's Margins Face Acquisition-Related Pressure
Total segment margin was 23.1%, 10 basis points above the high end of management's guidance but 80 basis points below the prior-year quarter. Acquisition-related effects and higher amortization weighed on reported profitability.
Selling and administrative expense was $1.24 billion, research and development expense was $227 million, and net interest expense was $201 million. The company also recorded $24 million of restructuring charges during the quarter.
Eaton's Cash Flow Supports Ongoing Investment
Operating cash flow was $1.13 billion, up 23% year over year. After $253 million of capital expenditures, free cash flow totaled $874 million, an increase of 22%.
At June 30, 2026, cash was $483 million compared with $622 million at year-end 2025. Long-term debt was $18.51 billion, up from $8.76 billion, reflecting the funding impact of recent acquisitions.
ETN Raises Full-Year Organic Growth Guidance
For 2026, Eaton now expects organic growth of 11-13% (up from prior range of 9-11%), segment margin of 24.1-24.5% and adjusted earnings of $13.40-$13.60 per share (up from prior range of $13.05-$13.50). The midpoint of the earnings range implies 12% growth from 2025.
For the third quarter, management projects organic growth of 13.5-15.5%, segment margin of 24.6-25% and adjusted earnings of $3.46-$3.56 per share. The outlook reflects expectations for continued demand momentum and stronger profitability.
ETN’s Zacks Rank
Eaton has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Releases
A. O. Smith Corporation’s (AOS - Free Report) second-quarter 2026 adjusted earnings of $1.03 per share beat the Zacks Consensus Estimate of 96 cents by 7.29%.
The long-term (three to five years) earnings growth rate is pinned at 12%. The Zacks Consensus Estimate of $3.74 for 2026 earnings per share has declined 2.86% year over year.
ABB Ltd. (ABBNY - Free Report) reported quarterly earnings of 66 cents per share, lagging the Zacks Consensus Estimate of 79 cents by 16.46%.
The long-term earnings growth rate is pinned at 17.67%. The Zacks Consensus Estimate for 2026 earnings per share has increased 51.81% year over year.
AZZ (AZZ - Free Report) reported quarterly earnings of $1.85 per share, beating the Zacks Consensus Estimate of $1.63 by 13.5%.
The Zacks Consensus Estimate for fiscal 2026 earnings per share has increased 12.12% year over year.