ETN · Q2 2026 Earnings

Bullish

Eaton Corporation

Reported July 31, 2026

30-second summary

Eaton beat on the top line and adjusted EPS in Q2 FY2026 — revenue $8.53B (+21% YoY, 14% organic) topped consensus by 4.5%, adjusted EPS $3.15 beat by 2.3% and cleared the prior guide by $0.05-$0.15, and segment margin of 23.1% came in 10bps above the high end of the 22.6-23.0% guide (though down 80bps YoY). FY26 organic growth guidance was raised 200bps to 11-13%, adjusted EPS raised $0.10 at midpoint to $13.40-$13.60, and Q3 was guided to 13.5-15.5% organic — a second consecutive quarter of raising into strength. The Electrical Global backlog +103% YoY is the most striking number on the page, though the composition matters: Electrical Global grew 18% organic + 25% Boyd + 1% FX, so organic growth matched Electrical Americas rather than exceeded it.

Headline numbers

EPS

Q2 FY2026

$3.15

+2.3% vs est.

Revenue

Q2 FY2026

$8.53B

+21.4% YoY

+4.5% vs est.

Gross margin

Q2 FY2026

33.5%

Free cash flow

Q2 FY2026

$0.87B

Operating margin

Q2 FY2026

23.1%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$8.53B	$7.03B	+21.4%	$7.45B	+14.5%
EPS	$3.15	$2.95	+6.8%	$2.81	+12.1%
Gross margin	33.5%	37.0%	-350bps	35.6%	-210bps
Operating margin	23.1%	23.9%	-80bps	22.7%	+40bps
Free cash flow	$0.87B	$0.72B	+22.1%	$0.31B	+178.3%

Guidance

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Adjusted EPS	Q2 FY2026	$3.00 - $3.10	$3.15	+$0.05 to +$0.15 above guide	Beat
GAAP EPS	Q2 FY2026	$2.29 - $2.39	$2.11	-$0.18 to -$0.28 below guide	Beat
Organic growth	Q2 FY2026	9-11%	14%	+3 to +5 points above guide	Beat
Segment margins	Q2 FY2026	22.6-23.0%	24.3%	+1.3 to +1.7 points above guide	Beat

New guidance

Metric	Period	Guide	YoY
Adjusted EPS	Q3 FY2026	$3.46 - $3.56	+10-15% YoY
GAAP EPS	Q3 FY2026	$2.77 - $2.87	—
Organic growth	Q3 FY2026	13.5-15.5%	—
Segment margins	Q3 FY2026	24.6-25.0%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EPS	FY2026	$13.05 - $13.50	$13.40 - $13.60	Raised by $0.10 at midpoint (from $13.275 to $13.50), top end raised by $0.10	Raised
Organic growth	FY2026	9-11%	11-13%	Raised by +2 points at both low and high end	Raised
GAAP EPS	FY2026	$10.88 - $11.33	$10.36 - $10.56	Lowered by $0.44 at midpoint (from $11.105 to $10.46); guidance range shifted lower	Raised

Reaffirmed unchanged this quarter: Segment margins (24.1-24.5%)

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Electrical Americas	$3.951B	$3.35B	+17.9%
Electrical Global	$2.517B	$1.753B	+43.6%
Aerospace	$1.222B	$1.08B	+13.1%
Mobility	$0.841B	—	-0.5%

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Organic sales growth	14%	—	—
Electrical Americas 12-month rolling orders growth	+41%	—	—
Electrical Global 12-month rolling orders growth	+33%	—	—
Aerospace 12-month rolling orders growth	+17%	—	—
Electrical Americas total backlog growth YoY	+33%	—	—
Electrical Global total backlog growth YoY	+103%	—	—
Aerospace total backlog growth YoY	+28%	—	—
Book-to-bill ratio (Electrical & Aerospace, rolling 12-month)	1.2	—	—

Management tone

No transcript available for this quarter; tone analysis below draws on press release framing, quantitative signals in the print, and the multi-quarter arc.

The press-release framing — "Raising our full-year organic growth guidance," "Strong performance and sustained demand across end markets," "Data centers remain a key growth driver" — is the same posture Eaton has held for multiple quarters, but the numbers behind it have tightened. Prior quarter's FY26 organic guide of 9-11% is now 11-13%, a 200bp raise, and Q3 is guided at 13.5-15.5% — above the raised FY midpoint of 12%. The "raise as we go" posture is now demonstrably playing out, with Q2 organic at 14% running +300-500bps above the just-issued guide.

The Electrical Americas margin debate that dominated last quarter's coverage recedes materially. Electrical Americas Q2 operating margin printed 27.5%, up 190bps sequentially, and CEO Ruiz explicitly called out sequential margin expansion "especially in Electrical Americas." On the total-segment level, however, margin at 23.1% was only 10bps above the guide high end and was down 80bps YoY — so the price-cost unwind is progressing in Americas even as consolidated margin still runs below prior-year levels, likely reflecting Boyd dilution and mix. The FY26 segment margin guide of 24.1-24.5% was reaffirmed — management is not yet ready to raise the margin framework.

The GAAP-to-adjusted divergence is the story management is not addressing. FY26 adjusted EPS was raised $0.225 at midpoint while FY26 GAAP was cut $0.445. The Q2 GAAP EPS of $2.11 also missed the $2.29-$2.39 guide range. Non-operating items — intangible amortization (Boyd, Ultra PCS), acquisition/divestiture charges, and higher interest expense ($201M vs $71M prior year on the Boyd-funded debt build) — are running structurally higher. Without a transcript, we don't have management's framing, but the GAAP guide cut alongside the adjusted raise is the quiet negative on an otherwise strong print.

Electrical Global remains a mixed read once you back out Boyd. Reported +44% revenue and +103% backlog headline as an international inflection, but 18% organic revenue growth is in line with Americas and 33% organic 12M orders trails Americas' +41%. The AI-power narrative continues to be Americas-anchored on organic terms; the international story is largely a Boyd-inclusion effect at this stage.

Answers to last quarter's watch list

Q2 organic growth print against the 9-11% guide — Q2 organic came in at 14%, +300-500bps above the guide. The raised FY26 framework of 11-13% is not yet threatened; Q3 is guided at 13.5-15.5%.

Resolved positively

Electrical Americas segment margin sequential recovery from Q1 — Q2 Electrical Americas operating margin printed 27.5%, up 190bps sequentially and explicitly highlighted by the CEO. The sequential recovery management outlined last quarter (April 1st price increase) has materialized.

Resolved positively

GAAP-to-adjusted EPS bridge — Widened materially. Q2 GAAP EPS of $2.11 missed the guide range, and FY26 GAAP guide was cut $0.445 at midpoint while adjusted was raised $0.225. Higher intangible amortization ($255M vs $129M prior year) and interest expense ($201M vs $71M) are the mechanical drivers.

Resolved negatively

Boyd quarterly revenue progression — Not disclosed as a standalone figure, but Boyd contributed 25 points of Electrical Global's revenue growth this quarter (its first full post-acquisition quarter), implying roughly $440M of Q2 contribution on the prior-year Global base of $1.75B. Status: Partially resolved (standalone figure still not broken out)

Mobility spin-off Form 10 filing and standalone financial framework — The Q2 disclosure advances the transaction structure: definitive agreements signed June 10 with Dana for a Reverse Morris Trust, ~$1.1B cash distribution to Eaton, Eaton shareholders to own ≥50.1% of combined company, targeted Q1 2027 close. Status: Resolved (structure known); Form 10/S-4 filings still pending

Order rate normalization in Electrical Americas TTM — Q2 12M rolling orders came in at +41%, holding the rolling rate above prior quarters' pace. Backlog +33% YoY continues the strong build.

Resolved positively

What to watch into next quarter

Q3 organic growth print against the 13.5-15.5% guide — third consecutive quarter of the guide-vs-actual gap. A print above 15.5% would suggest the raised FY26 11-13% framework is still conservative; below 13.5% would be the first miss-vs-guide since Q4 FY25 and damage the raise-into-strength narrative.

Electrical Global organic vs Boyd decomposition — this quarter's +44% reported revenue and +103% backlog is the standout headline, but organically Global grew 18%, matching Americas. Watch whether the organic Global rate accelerates in Q3 or whether the international story remains primarily a Boyd-inclusion effect.

FY26 GAAP EPS guide cadence — cut $0.445 at midpoint this quarter vs a $0.225 adjusted raise. Watch whether Q3 brings another GAAP cut. A stabilization would suggest the non-operating step-up has washed through; another cut would confirm structural.

FY26 segment margin guide — reaffirmed at 24.1-24.5% despite Q2 total-segment margin of 23.1% running below the FY band and Q3 guided at 24.6-25.0%. Watch whether Q3's implied second-half margin ramp materializes.

Boyd standalone quarterly revenue — needs standalone disclosure at Q3. Implied Q2 contribution of ~$440M sets a baseline; a run-rate above $450M/quarter would imply upside vs the acquisition thesis.

Mobility separation Form 10 / S-4 filings — Q1 2027 close puts Dana stockholder vote materials within a plausible Q3/Q4 FY26 window. Any slippage would begin to strain the timeline.

Sources

Eaton Q2 2026 earnings press release (SEC Form 8-K Exhibit 99): https://www.sec.gov/Archives/edgar/data/1551182/000155118226000027/etn06302026exhibit99.htm
Tradefeeds consensus estimates as of 2026-07-31

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