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DATE
Tuesday, Nov. 3, 2026
CALL PARTICIPANTS
- Senior Vice President of Investor Relations – Yan Jin
- Chief Executive Officer – Paulo Ruiz
- Executive Vice President and Chief Financial Officer – Dave Foster
TAKEAWAYS
- Revenue — $8.9 billion, representing a 28% increase driven by 19% organic growth and 8% from acquisitions.
- Adjusted EPS — $3.68, an all-time record and $0.12 above the high end of the company’s previous guidance range.
- Segment Margins — 25.3%, a record level reflecting higher sales volumes and improved operational execution.
- Electrical Americas Organic Sales — 22% growth, supported by a 54% increase in the data center market and strength in commercial and institutional sectors.
- Electrical Americas Margins — 29.8%, reflecting a sequential improvement of 230 basis points as new capacity projects became operational.
- Electrical Global Organic Sales — 27% growth, with nearly 50% growth in the Asia-Pacific region and strength in data center and utility markets.
- Electrical Global Margins — 21.1%, an increase of 200 basis points over the prior year due to higher sales and early restructuring efforts in Europe.
- Total Electrical Backlog — $20 billion, representing a 46% increase year over year and providing visibility into multiyear growth.
- Aerospace Organic Sales — 6% growth, driven by demand in the commercial original equipment manufacturer market and defense sectors.
- Aerospace Margins — 24.9%, a 100 basis point decrease compared to the prior year resulting from changes in the product mix.
- Mobility Organic Sales — 9% growth, marking a return to growth with a total segment revenue of $852 million.
- Mobility Margins — 17.2%, the highest level since 2018, resulting in incremental margins exceeding 50%.
- Data Center Revenue — 65% increase, marking the ninth consecutive quarter of growth exceeding 35% in this segment.
- Boyd Thermal Revenue Outlook — $1.9 billion for the full year, raised from previous guidance of $1.8 billion following triple-digit year-over-year growth.
- Mega Project Announcements — 85% increase so far this year, which management expects will convert into future demand for electrification infrastructure.
- Negotiations Pipeline — 55% increase year to date, serving as an early indicator of future order activity across all end markets.
- Book-to-Bill Ratio — 1.2 for the combined electrical and aerospace sectors, indicating that demand continue to outpace shipment capacity.
- Full-Year 2026 Organic Growth Guidance — 13% to 15%, a 200 basis point increase at the midpoint from previous expectations.
- Full-Year 2026 Adjusted EPS Guidance — $13.70 to $13.80, representing a $0.25 increase at the midpoint.
- Free Cash Flow — $1.03 billion for the quarter, supported by solid operating cash flow of $1.31 billion.
- Capital Expenditures — $275 million in the third quarter, focused on capacity expansions and infrastructure investments.
- Fibrebond Revenue — $600 million for the first year under Eaton ownership, increasing from $375 million at the time of the acquisition.
- 2027 Market Growth Assumption — 11% overall, with data centers and commercial aerospace expected to grow in the double digits.
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RISKS
- Ruiz noted that the Aerospace segment faces “specific supplier issues in some commodities” that have impacted the conversion of the current backlog.
- Foster stated that the “majority of the margin decline was driven by temporary commodity cost headwinds” in the Electrical Americas segment.
SUMMARY
Eaton Corporation plc (ETN +7.00%) reported third quarter results that surpassed the high end of management’s guidance ranges for revenue, organic growth, and adjusted earnings. Management attributed this performance to the execution of capacity expansion projects and sustained demand across electrical and aerospace end markets, particularly in AI-driven data centers. The company raised its full-year 2026 outlook for organic growth and adjusted earnings per share for the third time this year, reflecting record order levels and a growing backlog. Strategic efforts remained focused on integrating the Boyd Thermal acquisition and advancing the planned separation of the Mobility segment through a merger with Dana Incorporated.
- CEO Ruiz stated that 18 of 25 capacity expansion projects are complete, noting that “new capacity is turning into output, and output into earnings.”
- Management reported that the data center project pipeline reached 366 gigawatts, compared to 307 gigawatts at the end of the previous quarter.
- Ruiz noted that Boyd Thermal is expected to grow to “at least a $2.7 billion business for next year, which is roughly 50% growth over our previous $1.8 billion guide.”
- CFO Foster indicated that the company announced general price increases for Electrical Americas and Global segments effective Jan. 2, 2027.
- Management successfully tested a 15-kilovolt solid-state transformer, which Ruiz described as the “first multi-megawatt unit that successfully cleared all those tests” under new industry standards.
- The company reported that modular solution revenue in the Americas is projected to reach $1 billion in 2026, supported by the expansion of the Fibrebond business.
- Ruiz stated that the company remains architecture-agnostic regarding power distribution, noting that “we win in either path” whether customers choose traditional AC or next-generation DC architectures.
INDUSTRY GLOSSARY
- NordicEPOD: A joint venture specializing in modular power solutions in the EMEA region.
- Fibrebond: A designer and manufacturer of preintegrated modular power enclosures for data centers and utilities.
- COL Group: A manufacturer of medium-voltage electrical distribution solutions based in Italy.
- GIS: A regional business unit within the Electrical Global segment.
- RMT: Reverse Morris Trust, a tax-efficient method of divesting a business by merging it with another company.
- Book-to-bill: The ratio of orders received to units shipped and billed, used to measure demand sustainability.
- Solid-state transformer: A power transformer that uses semiconductor technology to manage electricity more efficiently than traditional magnetic transformers.
Full Conference Call Transcript
Operator: Thank you for standing by, and welcome to the Eaton Third Quarter 2026 Earnings Results Conference Call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. If your question has been answered and you would like to remove yourself from the queue, simply press star one again. We ask that you please limit yourself to one question each. You ma
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