Eaton Corp. plc: Q4 FY2025 earnings call

What management said about Q4 FY2025, from the documents filed with the SEC on 3 February 2026: press release. Guidance figures: 2 lowered, 11 new, 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Fourth quarter sales rose 13%: Sales of $7.1 billion came from 9% organic growth, 2% from acquisitions and 2% from foreign exchange. Source
• Full-year adjusted EPS record: Full-year 2025 diluted EPS was $10.45, up 10%; adjusted EPS was $12.07, up 12%. Source
• Electrical Americas sales up 21%: Sales of $3.5 billion: 15% organic growth, 5% from acquisitions, 1% from foreign exchange. Operating profit was $1.0 billion, up 14%, with a 29.8% margin. Source
• Electrical Americas orders and backlog growth: Twelve-month rolling orders rose 16% organically, driven by data center demand. Backlog at December 31 was up 31% over December 2024. Source
• Boyd Thermal acquisition pending: Eaton agreed to pay $9.5 billion for Boyd Thermal, a U.S.-based maker of thermal components, systems and ruggedized solutions with more than 5,000 employees. Source
• Mobility business spin-off planned: The planned spin-off would separate the Vehicle and eMobility segments into an independent public company, intended to be tax-free to ordinary shareholders. Source

“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.”

Paulo Ruiz, Eaton chief executive officer

Guidance

What changed from last quarter

• New guidance: First guidance for the full year 2026 and first quarter 2026 was given; the prior release gave guidance for 2025 and the fourth quarter 2025 only. Source
• Guidance lowered: Expected remaining restructuring costs were reduced: workforce reductions from $118 million to $102 million, and plant closing and other costs from $57 million to $38 million. Source
• Guidance kept: Total restructuring program estimate of $475 million is unchanged from the third-quarter release. Source
• New: Ultra PCS acquisition completed January 23, 2026, for $1.55 billion net of cash acquired; it is reported in the Aerospace segment. Source
• New: Management announced an intention to spin off the Mobility business, made up of the Vehicle and eMobility segments, as an independent public company. Source

Fourth quarter and full-year results

• Fourth quarter sales rose 13%: Sales of $7.1 billion came from 9% organic growth, 2% from acquisitions and 2% from foreign exchange. Source
• Quarterly EPS and adjusted EPS higher: Diluted EPS was $2.91, up 19%; adjusted EPS was $3.33, up 18%. Adjustments were $0.25 for amortization, $0.10 for acquisitions and $0.07 for restructuring. Source
• Full-year sales and organic growth: Full-year 2025 sales were $27.4 billion, up 10%, with 8% organic growth and 2% from acquisitions. Source
• Full-year adjusted EPS record: Full-year 2025 diluted EPS was $10.45, up 10%; adjusted EPS was $12.07, up 12%. Source

Segments and regions

• Electrical Americas sales up 21%: Sales of $3.5 billion: 15% organic growth, 5% from acquisitions, 1% from foreign exchange. Operating profit was $1.0 billion, up 14%, with a 29.8% margin. Source
• Electrical Global margin up 200 basis points: Sales of $1.7 billion, up 10% (6% organic, 4% currency). Operating profit of $340 million, up 23%, with a 19.7% margin. Source
• Aerospace sales up 14%: Sales of $1.1 billion, up 14% (12% organic, 2% currency). Operating profit of $268 million, up 21%, with a 24.1% margin, up 120 basis points. Source
• Vehicle sales down 9%: Sales of $586 million, down 9% (13% organic decline, 4% currency). Operating profit of $96 million, a 16.5% margin. Source
• EMobility sales down 15%: Sales of $125 million, down 15% (17% organic decline, 2% currency). Operating profit of $10 million, a 7.8% margin. Source

“Our growing and diversified backlog provides us with extended visibility, enabling predictable financial performance and disciplined capital planning.”

Paulo Ruiz, Eaton chief executive officer

Costs, margins and charges

• Quarterly segment margin 24.9%: Segment margin was 24.9%, 20 basis points above the fourth quarter of 2024. Full-year segment margin was 24.5%, at the high end of the latest guidance range. Source
• Restructuring charges and liability adjustment: Restructuring charges were $35 million in the quarter, against $70 million a year earlier. A $12 million liability adjustment related mainly to Vehicle workforce true-ups. Source
• Fibrebond retention award expense: Fibrebond employee award expense was $18 million in the quarter and $82 million for 2025, recorded within acquisition and divestiture charges. Source
• Amortization and acquisition charges: Intangible amortization was $121 million in the quarter and $486 million for 2025. Acquisition integration and divestiture charges were $48 million in the quarter and $183 million for 2025. Source

Demand and order book

• Electrical Americas orders and backlog growth: Twelve-month rolling orders rose 16% organically, driven by data center demand. Backlog at December 31 was up 31% over December 2024. Source
• Electrical Global orders and backlog: Twelve-month rolling orders rose 6% organically. Backlog at December 31 was up 19% over December 2024. Source
• Aerospace orders and backlog growth: Twelve-month rolling orders rose 11% organically. Backlog at December 31 was up 16% over December 2024. Source
• Book-to-bill ratio of 1.1: Management said the Electrical and Aerospace businesses drove sustained backlog growth, with a rolling twelve-month book-to-bill ratio of 1.1. Source
• End markets served: The company lists products for data center, utility, industrial, commercial and institutional, machine building, residential, aerospace and mobility markets. Source
• Customers in 180 countries: The company serves customers in 180 countries, up from more than 160 countries in the third-quarter release. Source

“As we enter 2026, we are confident that this momentum positions us to capitalize on the significant opportunities ahead”

Paulo Ruiz, Eaton chief executive officer

Capital, cash and balance sheet

• Quarterly cash flow at records: Operating cash flow was $1,965 million and free cash flow was $1,573 million in the quarter, compared with $1,597 million and $1,342 million a year earlier. Source
• Full-year cash flow: Full-year 2025 operating cash flow was $4,472 million and free cash flow was $3,553 million, against $4,327 million and $3,518 million for 2024. Source
• Capital expenditures higher: Capital expenditures for property, plant and equipment were $392 million in the quarter, against $255 million; $919 million for 2025, against $808 million. Source
• Long-term debt higher at year end: Long-term debt was $8,758 million at December 31, 2025, against $8,478 million a year earlier; the current portion was $1,136 million, against $674 million. Source
• Diluted share count lower: Diluted weighted-average shares were 389.5 million in the quarter, against 396.0 million a year earlier. The release gives no repurchase amounts. Source

Strategy, acquisitions and portfolio

• Boyd Thermal acquisition pending: Eaton agreed to pay $9.5 billion for Boyd Thermal, a U.S.-based maker of thermal components, systems and ruggedized solutions with more than 5,000 employees. Source
• Mobility business spin-off planned: The planned spin-off would separate the Vehicle and eMobility segments into an independent public company, intended to be tax-free to ordinary shareholders. Source
• Ultra PCS acquired in January: Ultra PCS, an aerospace supplier of electronic controls, sensing, stores ejection and data processing solutions, was acquired for $1.55 billion net of cash. Source
• Fibrebond price shown at $1.43 billion: The Fibrebond acquisition is shown at $1.43 billion net of cash, against $1.45 billion in the third-quarter release. Source
• Lead, Invest and Execute strategy: The CEO linked 2025 performance to the Lead, Invest and Execute for Growth strategy and to key investments that expanded capacity and capabilities. Source

Coming up, as management said on 3 February 2026

• Boyd Thermal closing expected: The Boyd Thermal transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the second quarter of 2026. Source
• Mobility spin-off completion targeted: Management expects to complete the Mobility spin-off by the end of the first quarter of 2027. Source
• Restructuring program completion in 2026: The restructuring program is expected to be completed in 2026, with total estimated charges of $475 million. Source
• First-quarter 2026 guidance: Management gave first-quarter 2026 guidance: organic growth of 5-7%, segment margins of 22.2-22.6%, EPS of $2.29 to $2.49 and adjusted EPS of $2.65 to $2.85. Source

Figures management reported

Risks management discussed

• Regulatory: Closing of the Boyd Thermal acquisition depends on customary closing conditions and regulatory approvals. Source
• Regulatory: The Mobility spin-off depends on legal and regulatory approvals, final Board approval and effectiveness of a Form 10 registration statement. Source

Earlier plans management reported on

• Ahead: Fourth quarter 2025 segment margin of 24.9% was reported above the high end of the guidance range given in the third-quarter release. Source
• Met: Full-year 2025 segment margin of 24.5% was described as at the high end of the latest guidance range. Source
• Not stated: The third-quarter release expected the Ultra PCS closing in the fourth quarter of 2025; this release reports the acquisition as completed on January 23, 2026.
• Not stated: Management referred to continuing progress toward its 2030 targets. Source
• Not stated: The restructuring program is expected to be completed in 2026. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.