Eaton Corporation (ETN) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 2025 results with adjusted EPS of $2.72, up 13% year-over-year, and segment margins of 23.9%, driven by strong performance in Electrical Americas, Aerospace, and Electrical Global segments.

• Organic growth accelerated to 9%, led by 13% growth in Electrical Americas and Aerospace, with robust backlog increases and book-to-bill ratios above 1.0.

• Net sales rose 7% year-over-year to $6.4 billion, with net income attributable to shareholders up 17% to $964 million.

• Completed the $1.45 billion acquisition of Fibrebond, enhancing data center solutions and modular power offerings.

• Guidance, cash flow, and share repurchase plans reaffirmed for 2025, with leadership transition announced.

Financial highlights

• Q1 sales reached $6.4 billion, up 7% year-over-year, with organic sales growth of 9% and segment operating margin at a record 23.9%, up 80 basis points.

• Adjusted EPS was $2.72, up 13%; net income attributable to shareholders was $964 million.

• Gross profit margin improved to 38.4%, and segment operating profit rose to $1.52 billion.

• Operating cash flow was $238 million, with free cash flow at $91 million for the quarter.

• Book-to-bill ratio for key segments at 1.1, reflecting strong backlog growth.

Outlook and guidance

• 2025 organic growth guidance raised to 7.5–9.5%, with adjusted EPS expected at $11.80–$12.20, up 11% at midpoint.

• Segment margin guidance set at 24.0–24.4%; Q2 2025 adjusted EPS outlook of $2.85–$2.95 and organic growth of 6–8%.

• Segment-specific organic growth guidance: Electrical Americas 12–14%, Aerospace 8–10%, Vehicle (5.5)–(3.5)%.

• Free cash flow guidance for 2025 at $3.7B–$4.1B; capex projected at ~$900 million.

• Multi-year restructuring program to complete in 2026, with $475 million in charges and $375 million mature year benefits.