Eaton Q2 Earnings Call Highlights

Record Q2 performance: Eaton’s revenue rose 21% to $8.5 billion and adjusted EPS reached $3.15, with both results exceeding guidance.

The company raised its 2026 outlook to 11%–13% organic growth and adjusted EPS of $13.40–$13.60.

Electrical Americas drove momentum: Organic sales increased 18%, including approximately 65% growth in data center revenue.

Strong orders, a 1.3 book-to-bill ratio and a $5 billion backlog increase support continued growth as Eaton invests more than $1 billion in capacity expansion.

Data centers and acquisitions expand Eaton’s opportunity: Management cited substantial long-term U.S. data center demand and expects Boyd, which supplies liquid-cooling products, to generate $1.8 billion in full-year revenue.

Eaton is using acquisitions such as Boyd, Fibrebond and Ultra PCS to strengthen its position in higher-growth infrastructure markets.

Eaton NYSE: ETN reported record second-quarter revenue and adjusted earnings as demand across its electrical businesses and aerospace segment remained strong, led by data center activity and capacity expansion in Electrical Americas.

Chief Executive Officer Paulo Ruiz said adjusted earnings per share reached $3.15, exceeding the company’s guidance midpoint by $0.10.

Revenue rose 21% to a record $8.5 billion, including 14% organic growth and a seven-percentage-point contribution from acquisitions.

Eaton reported a 23.1% margin for the quarter, with revenue growth and margins both above the high end of its guidance.

The company raised its full-year outlook, citing stronger-than-expected execution, accelerating orders and expanding backlog.

Eaton now expects 2026 organic growth of 11% to 13%, up from its prior range of 9% to 11%, and adjusted EPS of $13.40 to $13.60, or $13.50 at the midpoint.

Electrical Americas organic sales grew 18% in the quarter, driven in part by approximately 65% growth in data center revenue, according to Chief Financial Officer Dave Foster.

The segment also posted strong growth in machine OEM and commercial and institutional markets.

Electrical Americas operating margin was 27.5%, up 190 basis points from the first quarter.

Foster said about 100 basis points of the sequential improvement came from price-cost effects, while the remaining 90 basis points reflected higher output as facilities expanded production.

Management said Eaton is investing more than $1 billion in capacity expansion across Electrical Americas and is bringing about two dozen projects online.

Revenue per day has risen roughly 25% since the beginning of 2025, including an 8% sequential increase in the second quarter, Ruiz said.

Demand continued to outpace shipments.

Electrical Americas recorded a 1.3 book-to-bill ratio, while orders increased 41% on a rolling 12-month basis.

Ruiz said backlog in the segment increased by $5 billion since the beginning of 2025, including a sequential increase of $700 million.

For the second half, Foster said the company expects Electrical Americas margins to rise by 450 to 500 basis points compared with the first half.

He attributed approximately 300 basis points of that expected increase to price-cost improvement and 150 to 200 basis points to output and productivity gains.

Eaton said pricing actions were implemented in the second quarter and early third quarter.

Global electrical and aerospace results Electrical Global revenue rose 44%, including 18% organic growth and a 25-point contribution from the Boyd acquisition.

Organic growth was supported by data centers, utilities and machine OEM markets.

Segment operating margin was 1...