Eaton beats estimates on strong demand

Investing.com -- Eaton Corporation plc (NYSE: ETN) shares are trading higher premarket after the company reported its third-quarter earnings.

Eaton posted third-quarter adjusted earnings per share of $3.68, exceeding the analyst estimate of $3.54, as the power management company benefited from robust demand across its electrical and aerospace segments.

Revenue for the quarter reached a record $8.9 billion, up 28% from the third quarter of 2025, surpassing the consensus estimate of $8.53 billion. Organic sales grew 19%, above the high end of the company's guidance, with acquisitions contributing 8% and foreign exchange adding 1%.

The company sees full-year adjusted EPS between $13.70 and $13.80, with a midpoint of $13.75 above the analyst consensus of $13.60.

Shares rose 1.6% following the results.

Segment margins reached a record 25.3%, 30 basis points above both the high end of guidance and the prior-year period. The company generated operating cash flow of $1.31 billion and free cash flow of $1.03 billion during the quarter.

"Our strong third quarter performance reflects the focus and discipline our teams have demonstrated all year as we expand capacity, strengthen execution and position the business to meet accelerating customer demand," said Paulo Ruiz, chief executive officer.

The Electrical Americas segment posted record sales of $4.2 billion, up 22% organically YoY, with operating margins of 29.8%, up 230 basis points sequentially. Twelve-month rolling average orders increased 39% organically, while backlog grew 33% compared to September 2025.

Electrical Global sales reached a record $2.7 billion, up 58% from the prior year, including 27% organic growth and a 31% contribution from the Boyd Thermal acquisition. Operating margins improved 200 basis points YoY to 21.1%.

Aerospace segment sales rose 11% to a third-quarter record of $1.2 billion, with 6% organic growth and 5% from the Ultra PCS acquisition.

For the fourth quarter of 2026, Eaton expects organic growth of 13-15%, segment margins of 25.4-25.8%, and adjusted EPS of $4.05 to $4.15.

Original Article

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