Eaton Corporation 8-K
PositiveEarningsGuidance raisedRestructuring
Sustained demand drives higher growth and adjusted-EPS guidance; Mobility business to combine with Dana.
Filed 2026-07-31 07:00 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q2 2026 results with Q3 and FY2026 guidance; Eaton raised FY2026 organic-growth and adjusted-EPS guidance. Record sales rose 21% Y/Y, including 14% organic growth; adjusted EPS reached a quarterly record. Eaton cited strong performance and sustained demand. It also agreed to combine its Mobility business with Dana in a transaction expected to close in Q1 2027.
Key Figures
| Metric | Q2 2026 | Q2 2025 | Y/Y |
|---|---|---|---|
| Net sales | $8.53B | $7.03B | +21% |
| Net income attributable to Eaton ordinary shareholders | $821M | $982M | -16% |
| Diluted EPS attributable to Eaton ordinary shareholders | $2.11 | $2.51 | -16% |
| Adjusted earnings per ordinary share (non-GAAP) | $3.15 | $2.95 | +6.8% |
| Operating cash flow | $1.13B | $918M | +23% |
| Free cash flow (non-GAAP) | $874M | $716M | +22% |
- Segment margins were 23.1%, down 80 bp Y/Y but 10 bp above the high end of guidance; Electrical Americas margins rose 190 bp sequentially. Twelve-month average orders grew 41% in Electrical Americas, 33% in Electrical Global and 17% in Aerospace; backlogs grew 33%, 103% and 28%, respectively. Broad end-market strength supported demand; Boyd Thermal contributed 25% to Electrical Global sales growth.
- Cash was $483M at 6/30/2026 vs $622M at 12/31/2025; balance-sheet debt carrying value was $20.6B vs $9.90B. Eaton expects another $78M of restructuring charges ($60M workforce reductions and $18M plant-closing and other costs), bringing estimated program charges to $475M; mature-year benefits are expected to reach $375M.
- Under the Dana transaction, Eaton shareholders are expected to own at least 50.1% of the combined company, and Eaton expects a ≈$1.1B cash distribution, subject to adjustments, taxes and transaction costs. Closing is expected in Q1 2027, subject to Dana stockholder and regulatory approvals and customary conditions.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| Organic growth | FY2026 | 11%-13% | — | Raised |
| Segment margins | FY2026 | 24.1%-24.5% | — | — |
| EPS (GAAP) | FY2026 | $10.36-$10.56; +0.1% at midpoint vs 2025 | — | — |
| Adjusted EPS (non-GAAP) | FY2026 | $13.40-$13.60; +12% at midpoint vs 2025 | — | Raised |
| Organic growth | Q3 2026 | 13.5%-15.5% | — | — |
| Segment margins | Q3 2026 | 24.6%-25.0% | — | — |
| EPS (GAAP) | Q3 2026 | $2.77-$2.87 | — | — |
| Adjusted EPS (non-GAAP) | Q3 2026 | $3.46-$3.56 | — | — |
The FY2026 organic-growth increase reflects strong performance and sustained demand.
Investor Takeaways
- Track Q3 results against the organic-growth, segment-margin and EPS ranges.
- Watch whether strong orders and backlog convert into sales and margins.
- Dana stockholder and regulatory approvals, followed by the expected Q1 2027 closing, are key milestones for the Mobility separation.
The summary is written by an AI model reading the filing.
Model 005 · prompt 01d34d48e3