Eaton Corporation (NYSE:ETN) shares are trading higher after the company reported better-than-expected third-quarter results, with adjusted EPS of $3.68 beating the $3.54 estimate.
Sales rose 28% year over year to $8.947 billion, topping the $8.506 billion consensus.
Organic sales increased 19%, exceeding the high end of guidance, while segment margins reached a record 25.3%, 30 basis points above the guidance range.
Rolling 12-month organic orders increased 39% in Electrical Americas, 51% in Electrical Global and 20% in Aerospace, with all three segments recording their highest-ever order dollars.
Backlog grew 46% in Electrical and 33% in Aerospace.
Operating cash flow totaled $1.31 billion, while free cash flow reached $1.03 billion.
Separately, Eaton agreed to acquire COL Group for €810 million (approximately $921 million), expanding its European manufacturing and power distribution capabilities for data center and utility markets.
Eaton expects its Mobility-Dana deal to close within the first four months of 2027 and generate an approximately $1.1 billion cash distribution.
Segment Performance
Electrical Americas sales rose 22% organically to a record $4.2 billion. Operating profit increased 20% to $1.2 billion, while margins expanded 230 basis points sequentially to 29.8%.
Electrical Global sales climbed 58% to $2.7 billion, including 27% organic growth and a 31% contribution from Boyd Thermal. Operating profit increased 75% to $576 million.
Aerospace sales rose 11% to $1.2 billion, while operating profit increased 6% to $298 million.
Mobility sales totaled $852 million, with organic growth of 9% and operating profit up 39% to $146 million.
Outlook
Eaton raised its FY26 adjusted EPS guidance to $13.70–$13.80 from $13.40–$13.60, above the $13.60 estimate.
The company expects fourth-quarter adjusted EPS of $4.05–$4.15, with the midpoint above the $4.07 consensus.
FY26 organic sales growth is projected at 13%–15%, with segment margins of 24.1%–24.5%. For the fourth quarter, Eaton expects organic growth of 13%–15% and segment margins of 25.4%–25.8%.
ETN Stock Price Activity: Eaton Corp shares were up 5.80% at $387.29 at the time of publication on Tuesday.
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