Eaton posts record $8.53B revenue, raises outlook on AI data center

Eaton Corporation shares surged nearly 8% on July 31, 2026, after the power management company reported record second-quarter results and raised its full-year outlook, signaling that the artificial intelligence data center buildout remains robust.

Revenue for the quarter ended June 30, 2026, jumped more than 21% year-over-year to a record $8.53 billion, surpassing the LSEG-compiled consensus estimate of $8.13 billion. Adjusted earnings per share rose nearly 7% to $3.15, a second-quarter record, beating the $3.07 expected.

The stock rebound reversed a slide that had erased roughly 17% of Eaton’s value from late June highs through July 29, 2026, as a broader AI hardware sell-off and a disappointing quarter from rival Vertiv weighed on the sector.

Eaton’s acquisition of Boyd Thermal, completed in March 2026, is proving pivotal. Management raised Boyd’s full-year sales estimate to $1.8 billion from $1.7 billion, with the contribution to Eaton’s top line now expected to be $1.5 billion, up from $1.4 billion. Chief Executive Officer Paulo Ruiz said he would be “shocked” if the company does not overdeliver on that guidance, noting Boyd beat its second-quarter estimate by 20%. Ruiz highlighted Boyd’s market leadership in liquid cooling and its aerospace pedigree, which brings stringent technical standards to the data center environment.

The combined electrical businesses delivered 18% organic growth and 27% total growth, with margins of 24.5%. On a rolling 12-month basis, orders accelerated to 38% year-over-year growth, yielding a book-to-bill of 1.2 times and a 43% backlog increase.

Within that, Electrical Americas posted record revenue and operating profit with 18% organic growth. Chief Financial Officer David Foster said the pipeline of negotiations is up 60% year-to-date, and orders rose 41%, leading to a book-to-bill of 1.3 times and a backlog of $3.8 billion, up 33% from a year earlier.

Electrical Global revenue soared 44%, including 18% organic growth and a 25% boost from Boyd, with backlog doubling.

Aerospace sales hit an all-time high despite missing estimates, and the division’s book-to-bill was 1.2 times, driving 28% backlog growth.

The mobility division, which Eaton plans to divest in the first quarter of 2027 via a Reverse Morris Trust transaction, saw a 2% organic revenue decline offset by foreign exchange. In June 2026, the company agreed to combine the unit with Dana in a deal valuing it at $5.1 billion, a move that would remove a drag on earnings and sharpen focus on higher-margin businesses.

Eaton’s total U.S. data center backlog has grown to 307 gigawatts, representing 15 years at 2025 build rates, up from 12 years in the prior update. Only about 20% converts in the near term, with the majority delivering revenue in 2028 and beyond, providing extended visibility. The company expects double-digit data center market growth in 2026 and sees robust demand across electric vehicles and commercial aerospace.

For the full year, Eaton raised its organic growth outlook to 11% to 13%, up from 9% to 11% and above the 10.5% FactSet consensus. Segment margins are still seen at 24.1% to 24.5%. Adjusted earnings per share are now projected at $13.40 to $13.60, up from $13.05 to $13.50 and above the $13.24 estimate. For the third quarter, organic growth is expected at 13.5% to 15.5%, margins at 24.6% to 25%, and adjusted EPS at $3.46 to $3.56, all beating consensus.

The CNBC Investing Club with Jim Cramer reiterated its $450 price target on Eaton but maintained a 2 rating, looking for a better opportunity to upgrade and buy.