Eaton tops Q3 profit estimates as sales rise 28% on organic growth

Eaton (ETN) reported third-quarter adjusted earnings of $3.68 per share on Nov. 3, up from $3.07 a year earlier. The result beat the $3.58 consensus estimate, and sales of $8.95 billion beat the $8.59 billion estimate.

Sales rose 28% from $6.99 billion a year earlier. The company said organic sales grew 19%, acquisitions added 8% and foreign exchange added 1%.

Segment margins were 25.3%, up 30 basis points from the third quarter of 2025 and above the high end of the company's guidance range. Operating cash flow was $1.31 billion and free cash flow was $1.03 billion.

Chief Executive Paulo Ruiz said the company "delivered organic growth and segment margins above the high end of our guidance" and that the results "reinforce our confidence in the remainder of the year."

Here's how the company did:

• Adjusted EPS: $3.68 vs. $3.07 a year earlier, against the $3.58 consensus estimate
• Diluted EPS: $2.77 vs. $2.59 a year earlier
• Net sales: $8.95 billion vs. $6.99 billion a year earlier, against the $8.59 billion estimate

Segment results

Electrical Americas sales were $4.2 billion, up 22% organically from the third quarter of 2025. Operating profit was $1.2 billion, and the twelve-month rolling average of orders rose 39% organically.

Electrical Global sales were $2.7 billion, up 58%. The company said 31% of that growth came from Boyd Thermal in its second full quarter after the acquisition. Operating profit was $576 million.

Aerospace sales were $1.2 billion, up 11%, and operating profit was $298 million, up 6%. Mobility posted sales of $852 million and operating profit of $146 million.

Guidance

For full-year 2026, the company expects organic growth of 13% to 15%, segment margins of 24.1% to 24.5%, EPS of $10.39 to $10.49 and adjusted EPS of $13.70 to $13.80.

For the fourth quarter, the company expects organic growth of 13% to 15%, segment margins of 25.4% to 25.8%, EPS of $3.28 to $3.38 and adjusted EPS of $4.05 to $4.15.

Acquisitions and separation

Eaton agreed on Sept. 25 to buy COL Group for €810 million ($921 million). The deal is subject to customary closing conditions and regulatory approvals, and the company expects it to close in the first quarter of 2027.

The company also plans to separate its Mobility business and combine it with Dana Incorporated in a Reverse Morris Trust transaction. The company expects that transaction to close in the first four months of 2027, subject to Dana stockholder approval and regulatory approvals.