Eaton shares tumble as Q3 guidance falls short of expectations

Published 05/08/2025, 11:40

Investing.com -- Intelligent power management company Eaton Corporation plc (NYSE:ETN) reported second-quarter adjusted earnings per share of $2.95, beating analyst estimates of $2.93, while revenue reached a record $7.03 billion, exceeding the consensus estimate of $6.91 billion.

Despite the beat, shares tumbled 6.4% as the company’s third-quarter guidance disappointed investors.

The company posted 8% organic sales growth for the quarter, at the high end of its guidance range.

Revenue increased 11% compared to the same quarter last year, with 8% from organic growth, 2% from acquisitions, and 1% from positive currency translation. Segment margins reached a second-quarter record of 23.9%.

Eaton’s third-quarter guidance of $3.01-$3.07 adjusted EPS fell short of analyst expectations of $3.10, likely driving the significant stock decline.

For the full year 2025, the company expects adjusted earnings per share between $11.97 and $12.17, representing 12% growth at the midpoint compared to 2024, and in line with the consensus estimate of $12.04.

"I’m proud to share Eaton’s strong second quarter results, reflecting our team’s commitment to leading and executing on our strategy to become the world’s premier power management company," said Paulo Ruiz, Eaton’s chief executive officer. "We see sustained demand in the acceleration of orders and increase in our backlog, powering our organic growth."

The Electrical Americas segment led growth with record sales of $3.4 billion, up 16% YoY, while Aerospace segment sales reached a record $1.1 billion, up 13%. Both segments showed strong backlog growth, with Electrical Americas up 17% and Aerospace up 16% compared to June 2024.

For the full year, Eaton forecasts organic growth of 8.5-9.5% with segment margins between 24.1% and 24.5%.

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