Eaton Corporation PLC (NYSE:ETN) reported record third-quarter earnings on Tuesday, narrowly topping profit forecasts, but its stock fell 8.3% after revenue came in slightly below analyst expectations despite hitting a new quarterly high.
The intelligent power management company posted adjusted earnings of $3.07 per share, just above the $3.05 consensus estimate. Revenue rose 10% year-over-year to $7 billion, marking a record for the third quarter, but missed the projected $7.07 billion. The increase included 7% organic growth and 3% from acquisitions.
Eaton maintained its full-year adjusted EPS guidance of $11.97 to $12.17, in line with the analyst consensus of $12.09, even as investors reacted negatively to the modest revenue shortfall.
“We continued to see strong demand in the quarter with order acceleration, as well as sustained growth in our backlog and positive book-to-bill ratio, driven primarily by our Electrical Americas and Aerospace businesses,” said Paulo Ruiz, Eaton’s Chief Executive Officer.
“Looking ahead, our strategy to lead, invest and execute for growth will continue to position us well to capitalize on the generational growth opportunities driven by digitalization and AI, reindustrialization, infrastructure spending and more.”
Segment operating margins reached a record 25.0%, exceeding the high end of guidance and improving 70 basis points from a year earlier. The Electrical Americas division delivered standout results, with sales up 15% to $3.4 billion and operating margins of 30.3%.
The Aerospace segment also performed strongly, with sales up 14% to $1.1 billion and record operating margins of 25.9%. However, other divisions weighed on overall growth — the Vehicle segment saw an 8% decline to $639 million, and eMobility dropped 19% to $136 million.
For the fourth quarter, Eaton expects organic sales growth of 10–12% and adjusted earnings per share between $3.23 and $3.43, compared with Wall Street’s forecast of $3.36.