Eaton Reports Record Fourth Quarter 2025 Results, with Accelerating Orders and Continued Backlog Growth, and Issues Guidance on 2026 Outlook
Intelligent power management company Eaton Corporation plc (NYSE:ETN) today announced that fourth quarter 2025 earnings per share were $2.91, a fourth quarter record. Excluding charges of $0.25 per sh...
- Twelve-month rolling average order acceleration in Electrical Americas, up 16%, driven by data center momentum, with strong Aerospace order growth, up 11%
- Strong year-over-year backlog growth of 29% in Electrical sector and 16% in Aerospace segment
- Fourth quarter record segment margins of 24.9%, above the high end of guidance
- Fourth quarter earnings per share of $2.91, a fourth quarter record and up 19% over 2024, and record adjusted earnings per share of $3.33, up 18% over 2024
- For full year 2025, record earnings per share of $10.45, up 10% over 2024, and record adjusted earnings per share of $12.07, up 12% over 2024, with 8% organic growth
- For full year 2026, earnings per share expected to be between $11.57 and $12.07, up 13% at the midpoint over 2025, and adjusted earnings per share expected to be between $13.00 and $13.50, up 10% at the midpoint over 2025
DUBLIN: Intelligent power management company Eaton Corporation plc (NYSE:ETN) today announced that fourth quarter 2025 earnings per share were $2.91, a fourth quarter record. Excluding charges of $0.25 per share related to intangible amortization, $0.10 per share related to acquisitions and divestitures, and $0.07 per share related to a multi-year restructuring program, adjusted earnings per share of $3.33 were a record.
Sales in the quarter were $7.1 billion, a record and up 13% from the fourth quarter of 2024. The sales increase consisted of 9% growth in organic sales, 2% growth from acquisitions and 2% growth from foreign exchange.
Segment margins were 24.9%, a fourth quarter record and a 20-basis point improvement over the fourth quarter of 2024.
Operating cash flow was $2.0 billion and free cash flow was $1.6 billion, both quarterly records and up 23% and 17%, respectively, over the same period in 2024.
Paulo Ruiz, Eaton chief executive officer, said, “In the fourth quarter, we continued to convert strong demand into accelerated orders and organic growth. Electrical and Aerospace were standout drivers, contributing to sustained backlog growth and a book-to-bill ratio of 1.1.”
For the full year 2025, sales were a record $27.4 billion, up 10% from 2024. The sales increase consisted of 8% growth in organic sales and 2% growth from acquisitions.
Segment margins of 24.5% for 2025 were a record and at the high end of the latest guidance range. This represents a 50-basis point improvement over the full year 2024.
Earnings per share for 2025 were a record $10.45, up 10% over 2024. Excluding charges of $0.99 per share related to intangible amortization, $0.37 per share related to acquisitions and divestitures, and $0.26 per share related to a multi-year restructuring program, adjusted earnings per share were a record $12.07, up 12% over 2024.
Operating cash flow for 2025 was $4.5 billion and free cash flow was $3.6 billion, both records and up 3% and 1%, respectively, over the same period in 2024.
On full year results, Ruiz continued, “Our solid performance in 2025 was driven by our Lead, Invest and Execute for Growth strategy, including key investments that expanded our capacity and capabilities. Our growing and diversified backlog provides us with extended visibility, enabling predictable financial performance and disciplined capital planning. As we enter 2026, we are confident that this momentum positions us to capitalize on the significant opportunities ahead-from digitalization and AI to reindustrialization, infrastructure spending and growth in the aerospace markets-while continuing progress toward our 2030 targets and delivering value for our shareholders.”
Guidance
For the full year 2026, the company anticipates:
- Organic growth of 7-9%
- Segment margins of 24.6-25.0%
- Earnings per share between $11.57 and $12.07
- Adjusted earnings per share between $13.00 and $13.50
For the first quarter of 2026, the company anticipates:
- Organic growth of 5-7%
- Segment margins of 22.2-22.6%
- Earnings per share between $2.29 and $2.49
- Adjusted earnings per share between $2.65 and $2.85
Business Segment Results
Sales for the Electrical Americas segment were a record $3.5 billion, up 21% from the fourth quarter of 2024. The sales increase consisted of 15% growth in organic sales, 5% growth from acquisitions and 1% growth from foreign exchange. Operating profits were a record $1.0 billion, up 14% over the fourth quarter of 2024, and operating margins in the quarter were 29.8%.
The twelve-month rolling average of orders in the fourth quarter was up 16% organically. Backlog at the end of December remained strong and was up 31% over December 2024.
Sales for the Electrical Global segment were a fourth quarter record $1.7 billion, up 10% from the fourth quarter of 2024. Organic sales were up 6%, and positive currency translation added 4%. Operating profits were a fourth quarter record $340 million, up 23% over the fourth quarter of 2024. Operating margins in the quarter were 19.7%, up 200 basis points over the fourth quarter of 2024.
The twelve-month rolling average of orders in the fourth quarter was up 6% organically. Backlog at the end of December was up 19% over December 2024.
On a rolling twelve-month basis, the book-to-bill ratio for the Electrical businesses remained strong at 1.1.
Aerospace segment sales were a record $1.1 billion, up 14% from the fourth quarter of 2024. Organic sales were up 12%, and positive currency translation added 2%. Operating profits were $268 million, a fourth quarter record and up 21% over the fourth quarter of 2024. Operating margins of 24.1% were up 120 basis points over the fourth quarter of 2024.
The twelve-month rolling average of orders in the fourth quarter was up 11% organically. The backlog at the end of December was up 16% over December 2024. On a rolling twelve-month basis, the book-to-bill ratio for the Aerospace segment remained strong at 1.1.
The Vehicle segment posted sales of $586 million, down 9% from the fourth quarter of 2024. Organic sales declined 13%, which was partially offset by 4% from positive currency translation. Operating profits were $96 million, and operating margins in the quarter were 16.5%.
eMobility segment sales were $125 million, down 15% from the fourth quarter of 2024. Organic sales declined 17%, which was partially offset by 2% from positive currency translation. The segment recorded an operating profit of $10 million, and operating margins in the quarter were 7.8%.
Eaton is an intelligent power management company dedicated to protecting the environment and improving the quality of life for people everywhere. We make products for the data center, utility, industrial, commercial and institutional, machine building, residential, aerospace and mobility markets. We are guided by our commitment to do business right, to operate sustainably and to help our customers manage power ─ today and well into the future. By capitalizing on the global growth trends of electrification and digitalization, we’re helping to solve the world’s most urgent power management challenges and building a more sustainable society for people today and generations to come.
Founded in 1911, Eaton has continuously evolved to meet the changing and expanding needs of our stakeholders. With revenues of $27.4 billion in 2025, the company serves customers in 180 countries. For more information, visit www.eaton.com. Follow us on LinkedIn.
Notice of conference call: Eaton’s conference call to discuss its fourth quarter results is available to all interested parties today as a live audio webcast at 11 a.m. United States Eastern time via a link on Eaton’s home page. This news release can be accessed under its headline on the home page. Also available on the website before the call will be a presentation on fourth quarter results, which will be covered during the call.
This news release contains forward-looking statements concerning first quarter and full year 2026 earnings per share, adjusted earnings per share, organic growth and segment margins; anticipated capital deployment; anticipated multi-year restructuring program charges and savings; the anticipated acquisition of Boyd Thermal; and Eaton’s intention to pursue a separation of its Mobility business. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside the company’s control. The following factors could cause actual results to differ materially from those in the forward-looking statements: a global pandemic; unanticipated changes in the markets for the company’s business segments; unanticipated downturns in business relationships with customers or their purchases from us; competitive pressures on sales and pricing; supply chain disruptions, unanticipated changes in the cost of material, labor, and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of disruptive or competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; strikes or other labor unrest at Eaton or at our customers or suppliers; natural disasters; the performance of recent acquisitions; unanticipated difficulties closing or integrating acquisitions; risks related to the ability to realize the anticipated benefits of the proposed acquisition, including the possibility that the expected benefits from the acquisition will not be realized or will not be realized within the expected time period; significant transaction costs; unknown liabilities; risk of litigation and/or regulatory actions relating to the proposed acquisition; unexpected difficulties completing divestitures; new laws, tariffs and governmental regulations; interest rate changes; changes in tax laws or tax regulations; stock market and currency fluctuations; geo-political tensions or war, civil or political unrest or terrorism; and unanticipated deterioration of economic and financial conditions in the United States and around the world. We do not assume any obligation to update these forward-looking statements.
Financial Results
The company’s comparative financial results for the three months ended December 31, 2025, are available on the company’s website, http://www.eaton.com.
EATON CORPORATION plc |
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CONSOLIDATED STATEMENTS OF INCOME |
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| Three months ended |
| Year ended December 31 | ||||||||||||
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(In millions except for per share data) |
| 2025 |
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| 2024 |
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| 2025 |
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| 2024 |
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Net sales | $ | 7,055 |
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| $ | 6,240 |
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| $ | 27,448 |
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| $ | 24,878 |
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Cost of products sold |
| 4,457 |
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| 3,811 |
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| 17,131 |
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| 15,375 |
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Selling and administrative expense |
| 1,009 |
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| 1,003 |
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| 4,311 |
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| 4,077 |
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Research and development expense |
| 203 |
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| 201 |
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| 797 |
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| 794 |
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Interest expense - net |
| 70 |
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| 42 |
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| 241 |
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| 130 |
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Other expense (income) - net |
| 22 |
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| 16 |
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| 37 |
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| (64 | ) |
Income before income taxes |
| 1,294 |
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| 1,167 |
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| 4,932 |
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| 4,566 |
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Income tax expense |
| 161 |
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| 195 |
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| 841 |
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| 768 |
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Net income |
| 1,133 |
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| 972 |
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| 4,090 |
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| 3,798 |
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Less net income for noncontrolling interests |
| (1 | ) |
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| (1 | ) |
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| (3 | ) |
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| (4 | ) |
Net income attributable to Eaton ordinary shareholders | $ | 1,132 |
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| $ | 971 |
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| $ | 4,087 |
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| $ | 3,794 |
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Net income per share attributable to Eaton ordinary shareholders |
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Diluted | $ | 2.91 |
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| $ | 2.45 |
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| $ | 10.45 |
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| $ | 9.50 |
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Basic |
| 2.92 |
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| 2.46 |
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| 10.48 |
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| 9.54 |
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Weighted-average number of ordinary shares outstanding |
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Diluted |
| 389.5 |
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| 396.0 |
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| 391.2 |
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| 399.4 |
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Basic |
| 388.2 |
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| 394.1 |
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| 389.9 |
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| 397.6 |
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Reconciliation of net income attributable to Eaton ordinary shareholders to adjusted earnings |
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Net income attributable to Eaton ordinary shareholders | $ | 1,132 |
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| $ | 971 |
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| $ | 4,087 |
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| $ | 3,794 |
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Excluding acquisition and divestiture charges, after-tax |
| 40 |
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| 9 |
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| 145 |
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| 26 |
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Excluding restructuring program charges, after-tax |
| 28 |
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| 56 |
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| 103 |
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| 160 |
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Excluding intangible asset amortization expense, after-tax |
| 97 |
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| 84 |
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| 384 |
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| 335 |
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Adjusted earnings | $ | 1,297 |
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| $ | 1,120 |
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| $ | 4,720 |
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| $ | 4,314 |
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