Eaton Corporation (ETN) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 sales of $7.5 billion, up 17% year-over-year, with organic growth of 10% and strong contributions from acquisitions and forex.

• Adjusted EPS reached a record $2.81, up 3% year-over-year, with segment margins at 22.7%, exceeding guidance.

• Closed major acquisitions including Boyd Thermal ($9.55B) and Ultra PCS ($1.53B), enhancing high-growth, high-margin markets, especially data centers and advanced cooling.

• Robust order momentum and record backlogs across Electrical Americas, Electrical Global, and Aerospace segments, with data center orders up 240% year-over-year.

• Announced intention to spin off the Mobility segment by Q1 2027.

Financial highlights

• Q1 organic growth was 10%, with total revenue growth of 17% year-over-year; acquisitions contributed 4% and forex 3%.

• Free cash flow rose 245% to $314 million, and operating cash flow was $507 million, up 113% year-over-year.

• Segment margins reached 22.7% overall, with Electrical Americas at 25.6%, Electrical Global at 19.2%, and Aerospace at 26.7%.

• Net income attributable to shareholders was $866 million, down 10% from Q1 2025, due to margin pressure from inflation and higher financing costs.

• No share repurchases in Q1 2026; $415 million paid in dividends.

Outlook and guidance

• Raised full-year 2026 organic growth guidance midpoint to 10% (from 8%), with segment margins at 24.1–24.5%.

• Full-year adjusted EPS guidance: $13.05–$13.50; reported EPS: $10.88–$11.33.

• Q2 2026 organic growth expected at 9–11%, segment margins 22.6–23.0%, adjusted EPS $3.00–$3.10.

• Plans to complete the Mobility spin-off by end of Q1 2027, subject to approvals.

• Capital expenditures projected to rise to $1.15 billion for 2026 to support capacity expansion.