Eaton Corp. plc: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 31 July 2026: press release. Guidance figures: 4 raised, 4 lowered, 6 new, 3 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Record sales of $8.5 billion: Second quarter sales were $8.5 billion, up 21% from the second quarter of 2025. The company reported the figure as a record. Source
• Adjusted EPS of $3.15: Adjusted EPS was $3.15, against $2.95 a year earlier. The company reported this as a second quarter record. Source
• Electrical Americas orders up 41%: Electrical Americas twelve-month rolling average orders rose 41% organically, with total backlog at end-June up 33% over June 2025. Source
• Electrical Americas margin up 190 basis points: Electrical Americas operating margin was 27.5%, up 190 basis points sequentially from 25.6% in the first quarter, on operating profit of $1.1 billion. Source
• Free cash flow of $874 million: Operating cash flow was $1.1 billion and free cash flow was $874 million, up 23% and 22% from the second quarter of 2025. Source
• Dana Reverse Morris Trust agreed: Eaton signed definitive agreements with Dana Incorporated to separate Mobility and combine it with Dana through a Reverse Morris Trust, announced in the quarter. Source

“Eaton accelerated its momentum in the second quarter and delivered record sales and solid earnings from strong organic growth.”

Paulo Ruiz, Eaton chief executive officer

Guidance

What changed from last quarter

• Guidance raised: Full-year organic growth guidance raised to 11-13% from 9-11%. Source
• Guidance raised: Full-year adjusted EPS guidance raised to $13.40-$13.60 from $13.05-$13.50. Source
• Guidance lowered: Full-year diluted EPS guidance lowered to $10.36-$10.56 from $10.88-$11.33. Source
• New guidance: Third quarter 2026 guidance given for organic growth, segment margins, diluted EPS and adjusted EPS. Source
• Guidance kept: Full-year segment margin guidance kept at 24.1-24.5%. Source
• Guidance lowered: Expected restructuring workforce reduction charges cut to $60 million from $78 million. Source
• New: Agreement signed to separate Mobility through a Reverse Morris Trust with Dana. Source

Results and growth drivers

• Record sales of $8.5 billion: Second quarter sales were $8.5 billion, up 21% from the second quarter of 2025. The company reported the figure as a record. Source
• Organic growth supplied 14 points: Of the 21% sales increase, 14 points came from organic growth and 7 points from acquisitions. Source
• Adjusted EPS of $3.15: Adjusted EPS was $3.15, against $2.95 a year earlier. The company reported this as a second quarter record. Source
• Diluted EPS below adjusted figure: Diluted EPS was $2.11, against $2.51, after excluding per-share charges for intangible amortization, acquisitions and divestitures, and restructuring. Source

Segment sales and profit

• Electrical Americas sales up 18%: Electrical Americas sales were $4.0 billion, up 18% organically, and operating profit was $1.1 billion, up 10%. Source
• Electrical Global sales up 44%: Electrical Global sales were $2.5 billion, up 44%: 18% organic, 25% from Boyd Thermal in its first full quarter, and 1% from foreign exchange. Operating profit was $499 million. Source
• Aerospace sales up 13%: Aerospace sales were $1.2 billion, up 13%: 7% organic and 6% from an acquisition. Operating profit was $278 million, up 16%, and operating margin was 22.8%. Source
• Mobility organic sales fell 2%: Mobility sales were $841 million. Operating profit was $109 million, up 7%, and operating margin was 13.0%, up 90 basis points. Source

“While data centers remain a key growth driver, we are benefiting from robust demand across our end markets.”

Paulo Ruiz, Eaton chief executive officer

Orders and backlog

• Electrical Americas orders up 41%: Electrical Americas twelve-month rolling average orders rose 41% organically, with total backlog at end-June up 33% over June 2025. Source
• Electrical Global backlog up 103%: Electrical Global orders rose 33% organically on a twelve-month rolling average. Backlog at end-June was up 103% over June 2025. Source
• Aerospace orders and book-to-bill: Aerospace twelve-month rolling average orders rose 17% organically, and backlog at end-June was up 28%. The rolling book-to-bill ratio increased to 1.2. Source
• Electrical book-to-bill at 1.2: On a rolling twelve-month basis, the book-to-bill ratio for the Electrical businesses was 1.2. Source

Margins and costs

• Segment margin fell 80 basis points: Segment margins were 23.1%, 10 basis points above the high end of the guidance range and down 80 basis points from the second quarter of 2025. Source
• Electrical Americas margin up 190 basis points: Electrical Americas operating margin was 27.5%, up 190 basis points sequentially from 25.6% in the first quarter, on operating profit of $1.1 billion. Source
• Electrical Global margin up 60 basis points: Electrical Global operating margin was 19.8%, up 60 basis points sequentially from the first quarter. Source

“Our focus on disciplined execution led to sequential margin expansion, especially in Electrical Americas.”

Paulo Ruiz, Eaton chief executive officer

Cash flow and balance sheet

• Free cash flow of $874 million: Operating cash flow was $1.1 billion and free cash flow was $874 million, up 23% and 22% from the second quarter of 2025. Source
• Capital spending rose: Capital expenditures for property, plant and equipment were $253 million, against $202 million a year earlier. Source
• Boyd Thermal purchase closed in March: Eaton acquired Boyd Thermal for $9.55 billion net of cash acquired. Long-term debt was $18.5 billion at June 30, against $8.8 billion at December 31, 2025. Source

Mobility separation and portfolio

• Dana Reverse Morris Trust agreed: Eaton signed definitive agreements with Dana Incorporated to separate Mobility and combine it with Dana through a Reverse Morris Trust, announced in the quarter. Source
• Mobility keeps reporting in continuing operations: Until the transaction closes, Mobility remains an Eaton segment, with its financial results reported in continuing operations. Source
• Spin-off fallback if transaction fails: If the transaction is not completed, Eaton intends to separate the Mobility segment through a spin-off instead. Source

Restructuring and acquisition charges

• Restructuring charges since program start: Charges since the restructuring program began total $397 million, as the company reported. Source
• Fibrebond award expense in charges: Fibrebond employee award compensation was $27 million in the quarter and $39 million in the first six months, reported within acquisition charges. Source
• Acquisition charges reached $154 million: Acquisition integration, divestiture charges and transaction costs were $154 million in the quarter, compared with $70 million a year earlier. Source

Coming up, as management said on 31 July 2026

• Mobility transaction expected to close: The Reverse Morris Trust with Dana is expected to close in the first quarter of 2027, subject to approvals and closing conditions. Source
• Cash distribution use planned: Eaton expects to use the Mobility cash distribution under its capital allocation framework, including repayment of debt. Source

Figures management reported

Risks management discussed

• Regulatory: Completion of the Mobility transaction depends on Dana stockholder approval, regulatory approvals and other closing conditions. Source
• Financial: The company incurred $52 million of withholding taxes in the quarter related to funding the Boyd Thermal acquisition. Source
• Financial: The approximately $1.1 billion Mobility cash distribution is subject to a cash and indebtedness adjustment and to tax payments and transaction charges. Source

Earlier plans management reported on

• Ahead: Second quarter organic sales growth of 14% was reported as above the high end of guidance. Source
• Not stated: Management said it remains well-positioned to deliver on its commitments. Source
• Not stated: The restructuring program is expected to be completed in 2026. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 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.