Jul 31, 2026 earnings call — Execution and data center demand drive results
Eaton reported record revenue of $8.5 billion and raised 2026 organic growth midpoint to 12% and adjusted EPS midpoint to $13.50.
Revenue $8.5B (est $8.2B) · EPS $3.15 (est $3.07)
Key quotes
"We are investing more than $1 billion in capacity expansion and bringing online 2 dozen projects across Electrical Americas."
"Our total company book-to-bill remains strong at 1.2, with Americas book-to-bill expanding to 1.3 and Aerospace to 1.2."
"The $3.4 million is the right number to think about it."
Analyst Q&A 10
growth outside data centers
Q (Deane Dray · RBC): How are non-data-center electrical end markets growing and what does that mean for H2?
A: Management said electrical end markets grew strongly across commercial, institutional, machine OEM and distributed IT, with orders accelerating broadly and mid- to high-teens increases in many areas. They said this shows multiple growth paths beyond data centers and that guidance already embeds tariff/refund impacts.
"Our total Electrical orders increased mid- to high teens for commercial, institutional, utility, industrial and even residential, which is a market that is not as strong as you guys know." — Paulo Sternadt (CEO)
Boyd acquisition performance
Q (Andrew Obin · BofA): Why is Boyd competitive vs peers and what is its near-term cadence between Q3 and Q4?
A: Management said they are very happy with Boyd and view it as a leading, high-performing cooling business that also gives strategic insight into chip development. They are confident Boyd will meet the raised full-year revenue forecast of $1.8 billion and noted Q2 revenue was $432 million, 20% above commitment.
"We are very confident they're going to deliver on this raised forecast for the full year, $1.8 billion." — Paulo Sternadt (CEO)
drivers of Electrical organic growth
Q (Christopher Snyder · Morgan Stanley): What drove the Electrical Global organic upside and can it hold double-digit growth into H2?
A: Management said growth was broad across geographies and end markets, with EMEA and APAC up about 20% and GIS high teens. They highlighted strong data center traction and large order and backlog increases as the reason for confidence in higher guidance.
"If you cut this by end market, we are getting a lot of traction in data center." — Paulo Sternadt (CEO)
CEO first-year reflections
Q (Scott Davis · Melius): After a year as CEO, how do you view progress, ups and downs, and future plans?
A: Management reviewed strategy changes, portfolio moves and investments made to accelerate growth, saying these actions set the company up to add substantial top-line in the next years. They described this period as an inflection and said they are preparing the company for faster growth.
"So that's what we are getting the company prepared for." — Paulo Sternadt (CEO)
Electrical Americas margin drivers
Q (Nigel Coe · Wolfe): How much of the Americas margin improvement comes from price vs cost and factory productivity?
A: Management explained recent margin improvement split roughly between price/cost and output/productivity and gave sequential and H1-to-H2 basis-point bridges showing price/cost contributing more but output also meaningful as factories scale. They said Q1-to-Q2 had about 100 points from price/cost and 90 from output.
"About 100 points of that was price/cost and the other 90 points was pure output as we got to scale that Paulo just talked about." — David Foster (CFO)
margin vs revenue tradeoff
Q (Jeffrey Sprague · Vertical Research Partners): Does the margin bridge assume higher revenue, and are price increases or cost cuts the main driver?
A: Management said improvements come from less premium labor (regular time vs overtime), more experienced operators, manufacturing cost-outs, and productivity investments; they emphasized price increases will play a large role and that discrete price actions are being implemented.
"Some of it, to be quite honest, is when you look at the difference between Q2 and Q3, we're going to be doing it on regular time versus overtime as an example." — David Foster (CFO)
Electrical Global guide conservatism
Q (Nicole DeBlase · Deutsche Bank): Could strong Q2 EG growth be pulled forward demand or is the back-half guide conservative?
A: Management said they remain prudent despite raising guidance materially (450 basis points) and emphasized the company-wide upward trajectory in guidance; they noted they keep pushing to improve results and are not seeing a downside.
"We are very prudent here, but we just raised 450 basis points." — Paulo Sternadt (CEO)
dollars per megawatt and 800V
Q (Andrew Kaplowitz · Citi): Is $3.4 million per megawatt still the right modeling number and how confident are you on 800 VDC content?
A: Management said $3.4 million is the right number to use and reiterated they view 800 VDC as an important efficiency transition. They said success requires multiple technology blocks (solid-state transformers, DC breakers, power electronics, cooling) and strong service capability.
"The $3.4 million is the right number to think about it." — Paulo Sternadt (CEO)
prefab and modular adoption
Q (Charles Albert Dillard · Bernstein): What share of RFPs are prefab/modular, how does it change competition, and impact for 800V adoption?
A: Management said modular solutions are growing because of skilled labor scarcity and that the Fibrebond acquisition was made to scale prefabricated modular offerings. They view modularization as complementary to 800V and are scaling engineering and project skills to serve that demand.
"This is exactly why we last year decided to make the acquisition of Fibrebond." — Paulo Sternadt (CEO)
lead times and gaining share
Q (Jeffrey Hammond · KeyBanc): How are lead times for long-lead items changing and when will better lead times help you gain share?
A: Management said they are working continuously to reduce lead times by adding factory capacity and engineering support and pointed to strong data center growth and eight consecutive quarters of >35% growth in that end market as evidence they are competitive. They said they identified specific product lines with extended lead times and are addressing them.
"If you see our growth, especially in data centers where lead times are even more important, we grew 65%, and I asked the team to look back, and I think we completed in total 8 consecutive quarters of growth beyond 35% in data centers, which is fascinating." — Paulo Sternadt (CEO)