Eaton Shares Drop After Company Posts Mixed Q3 Results

Eaton Corporation PLC (NYSE:ETN) shares are trading lower Tuesday after the company reported mixed third-quarter financial results and issued earnings per share guidance below estimates.

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What To Know: Eaton reported adjusted third-quarter earnings per share of $3.07, beating the consensus estimate of $3.05. The company reported third-quarter revenue of $6.99 billion, missing the consensus estimate of $7.08 billion, according to Benzinga Pro.

Eaton said third quarter sales rose 10% year-over-year, driven by 7% organic growth and 3% growth from acquisitions. Segment margins reached a record 25%, representing a 70-basis point improvement from a year ago. Operating cash flow was $1.4 billion and free cash flow was $1.2 billion in the quarter.

The company highlighted strong demand and order acceleration, with a 7% increase in twelve-month rolling average orders for the Electrical Americas segment and an 11% increase for the Aerospace segment. Backlog grew 18% in Electrical and 15% in Aerospace compared to last year.

“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,” said Paulo Ruiz, CEO of Eaton.

Q4 Outlook: Eaton sees adjusted earnings per share between $3.23 and $3.43, versus the consensus estimate of $3.38. The company also guided for GAAP earnings per share between $2.75 and $2.95, versus the consensus estimate of $3.08.

FY25 Outlook: Eaton lowered its GAAP earnings per share guidance from a range of $10.41 to $10.61 to an updated range of $10.29 to $10.49, versus the consensus estimate of $10.98. The company affirmed its adjusted earnings per share guidance of between $11.97 and $12.17, versus the consensus estimate of $12.04.

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ETN Price Action: At the time of writing, Eaton shares are trading 6.73% lower at $360.35, according to data from Benzinga Pro.

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