Eaton Corporation plc is an intelligent power management company that operates across several key business segments, providing a wide range of products for markets including data centers, utilities, industrial, commercial, machine building, residential, aerospace, and mobility **[0001551182-24-000035_etn-20240630.htm:23]** **[0001551182-24-000019_exhibit10112312023.htm:0]** **[0001551182-24-000006_etn-20231231.htm:4]**. In 2023, Eaton reported revenues of $23.2 billion, serving customers in over 160 countries **[0001551182-24-000035_etn-20240630.htm:23]** **[0001551182-24-000006_etn-20231231.htm:4]**. The company's business strategy is aligned with global trends such as electrification, energy transition, and digitalization, positioning it for growth in these expanding markets **[0001551182-24-000035_etn-20240630.htm:23]** **[0001551182-24-000006_etn-20231231.htm:4]**.

1. **Electrical Americas** - Focuses on electrical components, systems, and services, including power distribution, circuit protection, and lighting products.
2. **Electrical Global** - Provides electrical components, systems, and services similar to Electrical Americas, serving a global market.
3. **Aerospace** - Supplies systems for commercial and military use, contributing significantly to the aerospace industry.
4. **Vehicle** - Includes drivetrain and powertrain systems, catering to the automotive sector.
5. **eMobility** - Focuses on electrical components for vehicles, supporting the transition to electric mobility.

3f8a4ac582389b669a0e6a445235a1b92035c56298e864065f70fd5fa786a6f5

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from Debt [USD, Millions]

Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

0d3ac5cb62d20f883e8760232c871a0b2a418c783175ddee9e16f0f98c272dcd

| Geographical Segment | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | Q1 2022 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| United States ($M)   | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     |
| Canada ($M)          | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     |
| Latin America ($M)   | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     |
| Europe ($M)          | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     |
| Asia Pacific ($M)    | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     |

8a6efaefe2dc789eec165d4dff77e59a517a83418491e524f70abe8ea8d03c1d

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

Interest Expense [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD]

EPS - Diluted [USD]

28750fcf059e140b0e0c8645962ace5ee4e0d81e98fc50f9f41c2026049cd407

**Organic Change in Backlog (Electrical) (%)**

**Organic Change in Backlog (Aerospace) (%)**

**Organic Change in Backlog (%)**

**Organic Change in Customer Orders (Overall) (%)**

**Organic Change in Customer Orders (Electrical) (%)**

**Organic Change in Customer Orders (Aerospace) (%)**

**Book-to-Bill Ratio (Electrical) **

**Book-to-Bill Ratio (Aerospace) **

f890f5687ea7d9feb8303581b6390696f9b880acfc16e4610df6696b0ab4c8d4

| Metric [USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Electrical Americas  | **2,300**  **[0001157523-23-000204_a53306075ex99.htm:1]**  | **2,294**  **[0001551182-23-000008_etn-20230331.htm:7]**  | **2,500**  **[0001157523-23-001199_a53493804ex99.htm:1]**  | **2,594**  **[0001157523-23-001583_a53709552ex99.htm:4]**  | **2,700**  **[0001157523-24-000149_a53890459ex99.htm:1]**  | **2,690**  **[0001551182-24-000013_etn-20240331.htm:20]**  | **2,877**  **[0001551182-24-000035_etn-20240630.htm:22]**  | **2,963**  **[0001551182-24-000038_etn09302024exhibit99.htm:4]**  |
| Electrical Global    | **1,400**  **[0001157523-23-000204_a53306075ex99.htm:2]**  | **1,500**  **[0001551182-23-000008_etn-20230331.htm:7]**  | **1,600**  **[0001157523-23-001199_a53493804ex99.htm:1]**  | **1,503**  **[0001157523-23-001583_a53709552ex99.htm:4]**  | **1,500**  **[0001157523-24-000149_a53890459ex99.htm:2]**  | **1,500**  **[0001551182-24-000013_etn-20240331.htm:20]**  | **1,606**  **[0001551182-24-000035_etn-20240630.htm:22]**  | **1,573**  **[0001551182-24-000038_etn09302024exhibit99.htm:4]**  |
| Aerospace            | **812**  **[0001157523-23-000204_a53306075ex99.htm:2]**    | **803**  **[0001551182-23-000008_etn-20230331.htm:7]**    | N/A             | **867**  **[0001157523-23-001583_a53709552ex99.htm:4]**    | **895**  **[0001157523-24-000149_a53890459ex99.htm:2]**    | **871**  **[0001551182-24-000013_etn-20240331.htm:20]**    | **955**  **[0001551182-24-000035_etn-20240630.htm:22]**    | **946**  **[0001551182-24-000038_etn09302024exhibit99.htm:4]**    |
| Vehicle              | **707**  **[0001157523-23-000204_a53306075ex99.htm:2]**    | **739**  **[0001551182-23-000008_etn-20230331.htm:7]**    | N/A             | **753**  **[0001157523-23-001583_a53709552ex99.htm:4]**    | **723**  **[0001157523-24-000149_a53890459ex99.htm:2]**    | **724**  **[0001551182-24-000013_etn-20240331.htm:20]**    | **723**  **[0001551182-24-000035_etn-20240630.htm:22]**    | **696**  **[0001551182-24-000038_etn09302024exhibit99.htm:4]**    |
| eMobility            | **139**  **[0001157523-23-000204_a53306075ex99.htm:2]**    | **147**  **[0001551182-23-000008_etn-20230331.htm:7]**    | N/A             | **163**  **[0001157523-23-001583_a53709552ex99.htm:4]**    | **165**  **[0001157523-24-000149_a53890459ex99.htm:2]**    | **158**  **[0001551182-24-000013_etn-20240331.htm:20]**    | **189**  **[0001551182-24-000035_etn-20240630.htm:22]**    | **167**  **[0001551182-24-000038_etn09302024exhibit99.htm:4]**    |

5f852117a1ff8177b9d7ad2cdfaf08fc543a7b01fa38bfd4d9aaeb7169bcf4ed

a361bba2a28b2c00d9cacdec7453f4f31097ae3316035a261eb980bab689ef80

1. Given that only **16%** of the announced mega projects have started and cancellations, though modest, are at **10%**, how confident are you that the remaining projects will proceed as planned, and what contingency plans do you have if they do not?  **[ETN_3405087_1]** 

2. With the significant **$1.5 billion** investment in capacity, particularly in electrical products, can you elaborate on the potential risks of overcapacity if market demand slows, and how will this impact your return on invested capital?  **[ETN_3405087_28]** **[ETN_3405087_18]** 

3. Your Electrical Global margins lag behind those of Electrical Americas. Beyond restructuring efforts, what specific strategies are you implementing to drive growth and margin improvement in **Europe**, especially given the current market challenges there?  **[ETN_3405087_27]** 

4. Given the growing backlog in your Electrical segment, are there risks of Eaton becoming a bottleneck in the industry, and how are you addressing potential capacity constraints and lead times to ensure timely delivery to your customers?  **[ETN_3405087_18]** **[ETN_3405087_28]** 

5. With pricing moderation expected and historical pricing patterns returning, how confident are you in maintaining margin expansion in **2025**, especially if input costs rise or market competition intensifies?  **[ETN_3405087_22]** 

a5470771fe831373a4c163a6863fbc5f1ea31fceb1fb2d7d307bb3ee6f85f4e5

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q4 2024 and FY 2024

**Guidance:**
1. **Organic Growth**:
   - FY 2024: **8% to 9%** (low end expected due to aerospace strikes and vehicle market slowdown)  **[ETN_3405087_6]** .
   - Q4 2024: **6% to 7%**  **[ETN_3405087_6]** .

2. **Segment Margins**:
   - FY 2024: Increased by 20 basis points to **23.7%** at the midpoint  **[ETN_3405087_6]** .
   - Q4 2024: **23.6% to 24%**  **[ETN_3405087_6]** .

3. **Adjusted EPS**:
   - FY 2024: **$10.75 to $10.81** per share  **[ETN_3405087_6]** .
   - Q4 2024: **$2.78 to $2.84** per share  **[ETN_3405087_6]** .

4. **Capital Spending**: **$900 million to $1 billion**  **[ETN_3405087_7]** .

5. **Share Repurchase**: Approximately **$2 billion**  **[ETN_3405087_7]** .

6. **Tax Rate**: Approximately **18%**  **[ETN_3405087_7]** .

7. **Restructuring Program**: Costs of **$50 million** with **$75 million** savings  **[ETN_3405087_7]** .

8. **2025 Initial View**: End market growth of **6% to 8%**, incremental margins of **30% to 35%**  **[ETN_3405087_6]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024 and FY 2024

**Guidance:**
1. **Organic Growth**:
   - FY 2024: **8% to 9%**  **[ETN_3395691_6]** .
   - Electrical Americas: **11.5% to 13.5%**  **[ETN_3395691_6]** .
   - Aerospace: **10% to 12%**  **[ETN_3395691_6]** .
   - E-mobility: **17% to 23%**  **[ETN_3395691_6]** .
   - Q3 2024: **8% to 9%**  **[ETN_3395691_6]** .

2. **Segment Margins**:
   - FY 2024: Increased by 50 basis points to **23.5%**  **[ETN_3395691_6]** .
   - Electrical Americas: **28.9%**  **[ETN_3395691_6]** .
   - Q3 2024: **23.5% to 23.9%**  **[ETN_3395691_6]** .

3. **Adjusted EPS**:
   - FY 2024: **$10.65 to $10.75** per share  **[ETN_3395691_6]** .
   - Q3 2024: **$2.73 to $2.83** per share  **[ETN_3395691_6]** .

4. **Free Cash Flow**: **$3.4 billion to $3.6 billion**  **[ETN_3395691_6]** .

5. **Operating Cash Flow**: **$4.2 billion to $4.4 billion**  **[ETN_3395691_6]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024 and FY 2024

**Guidance:**
1. **Organic Growth**:
   - FY 2024: **7% to 9%**  **[ETN_3381534_6]** .
   - Electrical Americas: **10% to 12%**  **[ETN_3381534_6]** .
   - Q2 2024: **6.5% to 8.5%**  **[ETN_3381534_6]** .

2. **Segment Margins**:
   - FY 2024: Increased by 40 basis points to **23%**  **[ETN_3381534_6]** .
   - Electrical Americas: **28%**  **[ETN_3381534_6]** .
   - Q2 2024: **22.4% to 22.8%**  **[ETN_3381534_6]** .

3. **Adjusted EPS**:
   - FY 2024: **$10.20 to $10.60** per share  **[ETN_3381534_6]** .
   - Q2 2024: **$2.52 to $2.62** per share  **[ETN_3381534_6]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: Q1 2024 and FY 2024

**Guidance:**
1. **Organic Growth**:
   - FY 2024: **6.5% to 8.5%**  **[ETN_3371574_7]** .
   - Electrical Americas and Aerospace: **9% to 11%**  **[ETN_3371574_7]** .
   - eMobility: **30%**  **[ETN_3371574_7]** .
   - Q1 2024: **6% to 8%**  **[ETN_3371574_7]** .

2. **Segment Margins**:
   - FY 2024: **22.4% to 22.8%**  **[ETN_3371574_7]** .
   - Q1 2024: **21.3% to 21.7%**  **[ETN_3371574_7]** .

3. **Adjusted EPS**:
   - FY 2024: **$9.95 to $10.35** per share  **[ETN_3371574_7]** .
   - Q1 2024: **$2.21 to $2.31** per share  **[ETN_3371574_7]** .

4. **Operating Cash Flow**: **$4 billion to $4.4 billion**  **[ETN_3371574_7]** .

5. **Share Repurchase**: **$1.5 billion to $2.5 billion**  **[ETN_3371574_7]** .

6. **Restructuring Costs**: **$375 million** over 3 years, with **$175 million** in 2024 and **$50 million** savings  **[ETN_3371574_7]** .

387544b1f7f7460ff711a87e2638f228ad2546adb0ec9be20c08ca4dd8341563

Backlog for Aerospace segment (USD millions)

Organic change in backlog for Aerospace segment (percentage)

Organic change in customer orders for Aerospace segment (percentage)

Book-to-bill for Aerospace segment (ratio)

Backlog for Electrical Americas segment (USD millions)

Organic change in backlog for Electrical Americas segment (percentage)

Organic change in customer orders for Electrical Americas segment (percentage)

Book-to-bill for Electrical Americas segment (ratio)

Backlog for Electrical Global segment (USD millions)

Organic change in backlog for Electrical Global segment (percentage)

Organic change in customer orders for Electrical Global segment (percentage)

Book-to-bill for Electrical Global segment (ratio)

7c538b0ccbdea61c345e1775396fcca535a0939d9090d27d939870619b225e88

United States

Canada

Latin America

Europe

Asia Pacific

Rest of World

Total Revenue

72a619004db419cdf3b68a86c9040c24809578b1e306d3af85b8b279d0420e3c

1. **Backlog Growth and Demand Outlook**  
   **Q:** Can backlog continue to grow through this year?  
   **A:** Craig Arnold said that backlog is up **27%** year-over-year and continues to grow. Despite initial expectations, they may keep building backlog due to strong demand and record-high negotiations. They haven't seen a slowdown in orders, indicating robust demand across markets.

2. **Margins and Investment Impact**  
   **Q:** Why are margins expected to be flat despite growth?  
   **A:** They're investing heavily in capacity expansion, bringing on new facilities, and ramping up spending in the second half. This includes depreciation and startup costs, which will offset margin expansion despite **8–9%** sales growth.

3. **Capacity Expansion and Investments**  
   **Q:** What's the timing and impact of capacity additions?  
   **A:** They're adding **2 million** square feet of capacity, starting in the second half of this year. Investments address capacity constraints in areas like transformers and switchgear, ensuring they meet customer demand and aren't a bottleneck for growth.

4. **Data Center Growth and AI Impact**  
   **Q:** How is AI affecting data center orders?  
   **A:** Current data center growth is driven by conventional centers, with **90%+** of orders not tied to AI yet. AI-related data centers are a future growth area, expected to extend the build-out cycle for several additional years.

5. **Pricing Power and Price vs Cost**  
   **Q:** How is price vs cost developing, and what's pricing power into 2025?  
   **A:** They are now balanced on price versus cost, recovering inflation and maintaining margins. They expect continued advantageous pricing power due to demand exceeding capacity, even though year-over-year price impact will be less in the second half.

6. **European Market Outlook**  
   **Q:** What's happening with electrical markets in Europe?  
   **A:** The European electrical market has been weaker than expected, impacting their Electrical Global business. Mega trends are present, but macroeconomic factors are holding back growth, and they don't expect a second-half turnaround.

7. **Competition from Cleveland-Cliffs**  
   **Q:** Are you concerned about Cleveland-Cliffs entering transformers?  
   **A:** Craig Arnold isn't worried about Cleveland-Cliffs' **$150 million** transformer investment, considering it modest. He doesn't expect it to impact Eaton's growth rate or the industry significantly.

8. **CEO Succession**  
   **Q:** Any update on CEO succession?  
   **A:** Craig Arnold will retire at the end of May next year upon turning **65**. The Board is working on selecting the next leader, and an announcement will be made when ready.

9. **Aerospace Margins and Outlook**  
   **Q:** Why were Aerospace margins down, and what's the outlook?  
   **A:** Aerospace margins can be lumpy due to mix and timing. Despite a year-over-year decline, they're confident in a second-half improvement, based on solid orders and visibility.

10. **Buybacks and Capital Allocation**  
    **Q:** What's the plan for share buybacks this year?  
    **A:** They've bought back **$740 million** in the first half and plan to buy back around **$2 billion** for the year, likely leaning toward the higher end of the range.

11. **Transformer Demand and Capacity Constraints**  
    **Q:** How long will transformer demand exceed capacity?  
    **A:** They expect transformer demand and capacity misalignment to persist for several years due to their widespread use and the need to build grid resiliency.

ae5aa86a80c5b3a7732f15977bbd26a142fa4f784bd2863479a45c2bdd7f16fb

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

0a65c8536edc4c394885367d5251f8cdcf72166634e1aa846d8766c423be2bc4

| Name                   | Position                                                                 | Start Date         | Short Bio                                                                                                                                                                                                 |
|------------------------|--------------------------------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Craig Arnold           | Chairman and Chief Executive Officer                                     | June 1, 2016       | Craig Arnold joined Eaton in 2000 and has been a director since September 1, 2015. He became Chairman and CEO on June 1, 2016  **[0001308179-24-000169_letn2024_def14a.htm:6]** **[0001551182-24-000006_etn-20231231.htm:17]** .                                                                    |
| Olivier Leonetti       | Executive Vice President and Chief Financial Officer                     | February 2024      | Olivier Leonetti joined Eaton in February 2024. He previously served as CFO of Johnson Controls International plc and Zebra Technologies Corporation  **[0001551182-24-000006_etn-20231231.htm:17]** .                                                |
| Heath B. Monesmith     | President and Chief Operating Officer - Electrical Sector                 | July 5, 2022       | Heath B. Monesmith has been with Eaton since 2017, serving in various roles including President and COO of the Industrial Sector before his current position  **[0001551182-24-000006_etn-20231231.htm:17]** **[0001551182-23-000004_etn-20221231.htm:15]** .                                      |
| Paulo Ruiz             | President and Chief Operating Officer - Industrial Sector                 | July 5, 2022       | Paulo Ruiz joined Eaton in 2019 and has held various leadership roles, including President of Energy Solutions and Services  **[0001551182-24-000006_etn-20231231.htm:17]** **[0001551182-23-000004_etn-20221231.htm:15]** .                                                                      |
| Taras G. Szmagala, Jr. | Executive Vice President and Chief Legal Officer                          | June 24, 2022      | Taras G. Szmagala, Jr. has been with Eaton since 2017, previously serving as Senior Vice President of Public and Community Affairs and Corporate Communications  **[0001551182-24-000006_etn-20231231.htm:17]** **[0001551182-23-000004_etn-20221231.htm:15]** .                                   |
| Ernest W. Marshall, Jr.| Executive Vice President and Chief Human Resources Officer                | July 1, 2018       | Ernest W. Marshall, Jr. has been with Eaton since July 1, 2018, serving as the Chief Human Resources Officer  **[0001551182-24-000006_etn-20231231.htm:17]** **[0001551182-23-000004_etn-20221231.htm:15]** .                                                                                     |
| Daniel R. Hopgood      | Senior Vice President and Controller                                      | April 1, 2021      | Daniel R. Hopgood has been with Eaton since 2017, previously serving as Senior Vice President of Global Financial Services and Systems  **[0001551182-24-000006_etn-20231231.htm:17]** **[0001551182-23-000004_etn-20221231.htm:15]** .                                                            |
| Peter Denk             | President - Mobility Group                                                | April 1, 2023      | Peter Denk has been with Eaton since 2018, previously serving as President - Vehicle Group, North America  **[0001551182-24-000006_etn-20231231.htm:17]** .                                                                                           |
| Nandakumar Cheruvatath | President - Aerospace Group                                               | September 1, 2015  | Nandakumar Cheruvatath has been with Eaton since September 1, 2015, serving as President of the Aerospace Group  **[0001551182-24-000006_etn-20231231.htm:17]** .                                                                                     |
| Mike Yelton            | President - Americas Region, Electrical Sector                            | April 1, 2023      | Mike Yelton has been with Eaton since 2019, previously serving in various leadership roles within the Electrical Sector  **[0001551182-24-000006_etn-20231231.htm:17]** .                                                                              |
| Gregory R. Page        | Non-Executive Chair of the Eaton Board of Directors (effective June 1, 2025) | June 1, 2025  **[0001308179-24-000169_letn2024_def14a.htm:7]** **[0001308179-23-000228_letn2023_def14a.htm:8]** **[0001308179-23-000228_letn2023_def14a.htm:21]**  | Gregory R. Page has been a director of Eaton since 2003 and was elected Lead Director in 2022. He is also a director of 3M and Deere & Company and serves as non-executive chairman of Corteva, Inc.  **[0001308179-24-000169_letn2024_def14a.htm:7]** **[0001308179-23-000228_letn2023_def14a.htm:8]** **[0001308179-23-000228_letn2023_def14a.htm:21]** . |

4e3d850fd439ce5062a75d50c701141c2dcfe3d0431010c6886ca2ceb6911e95

| Program Details          | Program 1       | Program 2       |
|--------------------------|-----------------|-----------------|
| Approval Date            | February 27, 2019  **[0001551182-24-000041_etn-20240930.htm:14]** **[0001551182-24-000041_etn-20240930.htm:36]**  | February 23, 2022  **[0001551182-24-000041_etn-20240930.htm:14]** **[0001551182-24-000041_etn-20240930.htm:36]**  |
| End Date/Duration        | N/A             | Three-year period commencing on February 23, 2022  **[0001551182-24-000041_etn-20240930.htm:14]** **[0001551182-24-000041_etn-20240930.htm:36]**  |
| Total Additional Amount  | **$5.0 billion**  **[0001551182-24-000041_etn-20240930.htm:14]** **[0001551182-24-000041_etn-20240930.htm:36]**  | **$5.0 billion**  **[0001551182-24-000041_etn-20240930.htm:14]** **[0001551182-24-000041_etn-20240930.htm:36]**  |
| Remaining Authorization  | N/A             | **$3,086 million** as of the end of September 2024  **[0001551182-24-000041_etn-20240930.htm:44]**  |
| Details                  | Renewed in 2022 | Repurchases depend on market conditions, market price, capital levels, and other considerations  **[0001551182-23-000024_etn-20230630.htm:12]** **[0001551182-24-000013_etn-20240331.htm:11]** **[0001551182-24-000041_etn-20240930.htm:14]** **[0001551182-23-000029_etn-20230930.htm:13]** **[0001551182-23-000008_etn-20230331.htm:10]** **[0001551182-24-000035_etn-20240630.htm:12]** **[0001551182-22-000020_etn-20220630.htm:35]** **[0001551182-24-000006_etn-20231231.htm:78]**  |

986ca36ffe11e6f580d94fd91e950506f89cadd5c3af90bec91a187a13ab07a2

**Quarterly guidance for Q4 2024:**
- **Organic Growth**: 6% to 7%  **[ETN_3405087_6]**  (no prior guidance)  
- **Segment Margins**: 23.6% to 24%  **[ETN_3405087_6]**  (no prior guidance)  
- **Adjusted EPS**: $2.78 to $2.84  **[ETN_3405087_6]**  (no prior guidance)

**Annual guidance for FY 2024:**
- **Organic Growth**: 8% to 9%  **[ETN_3405087_6]**  (no change from 8% to 9%  **[ETN_3395691_6]** )  
- **Segment Margins**: 23.7%  **[ETN_3405087_6]**  (raised from 23.5%  **[ETN_3395691_6]** )  
- **Adjusted EPS**: $10.75 to $10.81  **[ETN_3405087_6]**  (raised from $10.65 to $10.75  **[ETN_3395691_6]** )  
- **Capital Spending**: $900 million to $1 billion  **[ETN_3405087_7]**  (no prior guidance)  
- **Share Repurchase**: $2 billion  **[ETN_3405087_7]**  (no prior guidance)  
- **Tax Rate**: 18%  **[ETN_3405087_7]**  (no prior guidance)  
- **Restructuring Program**: Costs of $50 million with $75 million savings  **[ETN_3405087_7]**  (no prior guidance)

**Annual guidance for 2025:**
- **End market growth**: 6% to 8%  **[ETN_3405087_6]**  (no prior guidance)  
- **Incremental margins**: 30% to 35%  **[ETN_3405087_6]**  (no prior guidance)  

67dd823f6f1d0ddbf1d924caf1d1a2c2d4fe45fb30460b23c98fb81ad2e5bc07

19afdd6bdbb237628f80c83733a7424338232cf5bc844b3d0b61ac95d90d7d13

- Total Revenue: $6,240 million (+5% YoY)  **[0001551182-25-000003_etn12312024exhibit99.htm:4]** **[0001551182-24-000006_etn-20231231.htm:93]** **[0001551182-24-000006_etn-20231231.htm:56]**   
- Electrical Americas: $2,906 million (**+9%** YoY)  **[0001551182-25-000003_etn12312024exhibit99.htm:4]** **[0001551182-24-000006_etn-20231231.htm:93]** **[0001551182-24-000006_etn-20231231.htm:56]**   
- Aerospace: $972 million (**+9%** YoY)  **[0001551182-25-000003_etn12312024exhibit99.htm:4]** **[0001551182-24-000006_etn-20231231.htm:93]** **[0001551182-24-000006_etn-20231231.htm:56]**   
- Vehicle: $647 million (**-10%** YoY)  **[0001551182-25-000003_etn12312024exhibit99.htm:4]** **[0001551182-24-000006_etn-20231231.htm:93]** **[0001551182-24-000006_etn-20231231.htm:56]**   
- eMobility: $148 million (**-10%** YoY)  **[0001551182-25-000003_etn12312024exhibit99.htm:4]** **[0001551182-24-000006_etn-20231231.htm:93]** **[0001551182-24-000006_etn-20231231.htm:56]**   

8d0490b1b0785e1a3114367503d5882d33e76ce1fe9d0a049b4e7feba82e094b

| Name              | Start Date | End Date | Reason for Change |
|-------------------|------------|----------|-------------------|
| Ernst & Young LLP | 1923  **[0001551182-24-000006_etn-20231231.htm:38]**  | Present  | Current auditor   |

41bbea739f0a7d483f17a9b23a2c845377a6080e9b34a0b91937e22b10bca9f9

fb3056894512af008a0a3a984446d1a32f1aa6c240327f82d4f704a24065890d

bc913276e4b1fca5f6ccf0a6c98ad228c4bb1fed24a7872ee2c708ce62ab87fd

a915cc9dbbd6b9dba8c8cd3887e7559532476f275362e81c94fdd7edc43758ab

- Total Revenue: $6.345 billion (**+8%** YoY from $5.88B)  **[0001551182-23-000029_etn-20230930.htm:2]** **[0001551182-24-000041_etn-20240930.htm:2]**   
- Net Income: $1.009 billion (**+13%** YoY from $889M)  **[0001551182-23-000029_etn-20230930.htm:2]** **[0001551182-24-000041_etn-20240930.htm:2]**   
- EPS (Diluted): $2.53 (**+14%** YoY from $2.22)  **[0001551182-23-000029_etn-20230930.htm:2]** **[0001551182-24-000041_etn-20240930.htm:2]**   
- Interest Expense: $29 million (-9% YoY from $32M)  **[0001551182-23-000029_etn-20230930.htm:2]** **[0001551182-24-000041_etn-20240930.htm:2]**   
- Electrical Americas: $2.963 billion (**+14%** YoY from $2.594B)  **[0001551182-23-000029_etn-20230930.htm:7]** **[0001551182-24-000041_etn-20240930.htm:7]**   
- Aerospace: $946 million (+9% YoY from $867M)  **[0001551182-23-000029_etn-20230930.htm:7]** **[0001551182-24-000041_etn-20240930.htm:7]**   
- Vehicle: $696 million (**-8%** YoY from $753M)  **[0001551182-23-000029_etn-20230930.htm:7]** **[0001551182-24-000041_etn-20240930.htm:7]**   

069cafcad97659f6ffcc44e63731d62c9569aa4e7ccb847075416ec1a64a0400

| Year | Amount Due (Millions) | Debt Type | Interest Rate (%) | % of Total Debt |
|------|-----------------------|-----------|-------------------|-----------------|
| 2024 | 3 **[0001551182-24-000041_etn-20240930.htm:4]** | Short-term debt | N/A | 0.03% = (3 / 9,395) * 100 **[0001551182-24-000041_etn-20240930.htm:4]** |
| 2024 | 714 **[0001551182-24-000041_etn-20240930.htm:4]** | Current portion of long-term debt | N/A | 7.6% = (714 / 9,395) * 100 **[0001551182-24-000041_etn-20240930.htm:4]** |
| 2031 | 1,084 **[0001551182-24-000041_etn-20240930.htm:10]** **[0001551182-24-000041_etn-20240930.htm:35]** | Euro Notes | 3.601 **[0001551182-24-000041_etn-20240930.htm:10]** **[0001551182-24-000041_etn-20240930.htm:35]** | 11.5% = (1,084 / 9,395) * 100 **[0001551182-24-000041_etn-20240930.htm:10]** **[0001551182-24-000041_etn-20240930.htm:35]** |
| 2036 | 1,084 **[0001551182-24-000041_etn-20240930.htm:10]** **[0001551182-24-000041_etn-20240930.htm:35]** | Euro Notes | 3.802 **[0001551182-24-000041_etn-20240930.htm:10]** **[0001551182-24-000041_etn-20240930.htm:35]** | 11.5% = (1,084 / 9,395) * 100 **[0001551182-24-000041_etn-20240930.htm:10]** **[0001551182-24-000041_etn-20240930.htm:35]** |

5ff7ad7dbecaf625041710fc5b2cfa674b1e954a469b21601407ef72a9ecf3f9

bf4252fbd83f64ac29eb8fe5cbde4abd9ac909924c400f32355373cf2f135a0a

1. **Industry Capacity Constraints and Growth Outlook**  
   **Q:** Can the industry meet soaring demand?  
   **A:** Craig Arnold acknowledged that the industry may not have enough capacity and labor to meet the **$25 billion** incremental market opportunity from mega projects over the next few years.  **[ETN_3371574_14]**  He believes this creates a large growth opportunity but expects the cycle to extend over multiple years due to these constraints.  **[ETN_3371574_14]** 

2. **Pricing Dynamics and Margin Outlook**  
   **Q:** What's the expected pricing contribution in 2024?  
   **A:** Craig Arnold stated that price will be a much smaller part of growth in 2024, returning to historical levels, as inflation pressures ease.  **[ETN_3371574_15]**  They expect volume to drive growth, with price contributing less than in the past few years.  **[ETN_3371574_15]** 

3. **Restructuring Program and Cost Savings**  
   **Q:** How will the $325 million cost savings impact margins?  
   **A:** Craig Arnold explained that the restructuring program will deliver **$325 million** in mature year benefits by 2027, which will fall through to the bottom line without offsetting expenses.  **[ETN_3371574_21]**  They plan to spend **$375 million** over the next few years to achieve these savings.  **[ETN_3371574_21]** 

4. **Mega Projects Margin Profile**  
   **Q:** What are the margins on mega project wins?  
   **A:** Craig Arnold stated that the margin profile of mega projects is not significantly different from the underlying business.  **[ETN_3371574_17]**  Despite their size, they expect similar profitability as they are selective in the projects they pursue due to capacity constraints.  **[ETN_3371574_17]** 

5. **Capital Allocation and Share Repurchases**  
   **Q:** Why is there $2 billion in share repurchases in 2024?  
   **A:** With **$2.6 billion** in cash at the end of 2023 and strong cash generation expected in 2024, the company plans to allocate **$2 billion** for share repurchases, while maintaining flexibility for strategic M&A.  **[ETN_3371574_16]**  Their strong balance sheet with **1.3x** net leverage allows for this capital return.  **[ETN_3371574_16]** 

6. **Election Risks to Mega Projects**  
   **Q:** Could upcoming elections impact mega projects?  
   **A:** Craig Arnold acknowledged the uncertainty of elections but is confident that mega projects will proceed since many are in red states benefiting from them.  **[ETN_3371574_18]**  He does not expect political changes to materially affect their growth outlook.  **[ETN_3371574_18]** 

7. **eMobility Growth Prospects**  
   **Q:** How does eMobility growth look amid industry noise?  
   **A:** They anticipate **30%** growth in eMobility for 2024, which is dialed back from customer requests.  **[ETN_3371574_20]**  Despite industry challenges, they remain on track for **$1.5 billion** in revenue and **11%** return on sales, with forecasts unchanged.  **[ETN_3371574_20]** 

8. **Data Center Growth and Capacity Constraints**  
   **Q:** Is capacity a concern for data center growth?  
   **A:** Craig Arnold expects data centers to be a strong growth market, projecting industry growth at a **16%** compound rate over the next five years.  **[ETN_3371574_24]**  While capacity constraints exist, they are investing to meet demand, and data centers are expected to be at the higher end of their **9%-11%** growth guidance.  **[ETN_3371574_24]** 

9. **Mix in Electrical Between Systems and Products**  
   **Q:** How will the systems vs. products mix affect margins?  
   **A:** Craig Arnold is moving away from the systems vs. products distinction, stating that profitability between them is not significantly different.  **[ETN_3371574_25]**  He suggests focusing on end markets rather than product classifications.  **[ETN_3371574_25]** 

10. **Backlog Risks and Fungibility**  
    **Q:** Are there risks in backlog conversion timing?  
    **A:** Craig Arnold is not concerned about backlog fungibility, noting they have ability to accelerate or decelerate backlog conversion to maintain attractive growth rates.  **[ETN_3371574_10]**  They have not seen issues to date and have plenty of demand over capacity.  **[ETN_3371574_10]** 

e00fd1ea565ef095b88088722311f6a205a3e97f03bedfe322715045a406b16b

- **Eaton's data center sales increased by **35%** in Q3, accelerating from **27%** in the prior quarter, with orders up **55%** on a rolling 12-month basis and negotiations up **90%**, indicating strong and accelerating growth in a key market  **[ETN_3405087_8]** .**
- **The company's win rate on mega projects stands at **40%**, higher than their underlying market share in Electrical Americas, suggesting Eaton is securing more large and complex projects, which bodes well for future growth  **[ETN_3405087_20]** .** With only **16%** of the **$1.6 trillion** in announced mega projects having started, substantial opportunities remain ahead  **[ETN_3405087_14]** .
- **Eaton expects to continue achieving pricing gains across its portfolio in 2025, contributing to revenue growth and margin expansion  **[ETN_3405087_22]** .** Additionally, they see room for improvement in operating margins through operating leverage, manufacturing efficiencies, and ongoing restructuring programs  **[ETN_3405087_10]** .

d9de6c049495e9f1de69c65b2ff94465812bb5c8caafa83232d3b2edec4141d7

- **Eaton's Electrical Americas segment achieved a remarkable 17% organic growth** in Q1, driven by robust demand in data centers and industrial markets. The company anticipates continued growth, supported by a record backlog and increasing orders, especially from data centers fueled by the rise of AI.  **[ETN_3381534_21]** ,  **[ETN_3381534_25]**
- **Eaton is strategically investing $1 billion** in capacity expansion to capitalize on growing demand, ensuring they are not constrained by capacity limitations. This includes adding new production lines, shifts, and even greenfield facilities, demonstrating confidence in sustaining high growth rates.  **[ETN_3381534_27]** ,  **[ETN_3381534_30]**
- Despite increased investments, **Eaton is maintaining strong execution and high margins**, with Electrical Americas reporting over 60% incremental margins and raising margin guidance. The company is effectively managing price-cost dynamics and expects to continue delivering strong financial performance.  **[ETN_3381534_15]** ,  **[ETN_3381534_11]**

7ab776ca6403f34f4e62c376d8ec3db3f1833296e05d222ed68a68f93bd8388b

1. **Data Center Performance**  
   **Q:** How did your data center business perform in Q3?  
   **A:** Our data center sales were up **35%** in the quarter, accelerating from **27%** growth in the prior quarter. Orders increased **55%** on a rolling 12-month basis, and negotiations are up **90%**, indicating strong momentum in the data center market.  **[ETN_3405087_8]** 

2. **Operating Leverage and Margins**  
   **Q:** Can you discuss the margin potential in Electrical Americas going forward?  
   **A:** We believe we haven't reached our maximum potential in Electrical Americas and see room for improvement. We have three levers: operating leverage on higher volume growth, improving manufacturing efficiencies in existing and new facilities, and ongoing restructuring programs that should deliver margin improvements.  **[ETN_3405087_10]** 

3. **2025 Growth Outlook**  
   **Q:** Will you outgrow the 6%-8% end market growth expected in 2025?  
   **A:** We have both an ambition and expectation to outgrow our end markets. While it's early and we're still planning for 2025, we should expect to grow faster than our end markets, though we're not ready to specify the exact magnitude yet.  **[ETN_3405087_10]** 

4. **Increased CapEx Investment**  
   **Q:** Is additional CapEx still focused on transformers and switchgear due to growth?  
   **A:** We've increased our incremental CapEx investment from **$1 billion** to **$1.5 billion**, with much of it going into markets like data centers and transformers where we've seen faster growth than anticipated. Customers are seeking multiyear commitments, reinforcing our decision to invest more to meet demand.  **[ETN_3405087_12]** 

5. **Mega Project Pipeline Progress**  
   **Q:** With only 16% of mega projects started, does 84% of orders remain ahead?  
   **A:** Yes, around **84%** of mega projects are still ahead, implying significant future orders. Cancellations are at roughly **10%**, lower than historical levels, making us optimistic about growth. While industry capacity challenges may extend project timelines, the progression remains positive with diverse projects across sectors like data centers, power, and commercial institutions.  **[ETN_3405087_14]** 

6. **Utility Market Performance**  
   **Q:** What are you seeing in the utility market; any signs of slowing?  
   **A:** Our utility business performed well in Q3, with revenues increasing **mid-teens** in Electrical Americas and **low teens** in Electrical Global. We expect the utility market to grow around **11%** per year. Customers are investing in CapEx, and factors like grid resiliency efforts and increased power demand support strong long-term prospects.  **[ETN_3405087_16]** 

7. **Backlog and Order Growth**  
   **Q:** With backlog up 25% year-over-year, will revenue accelerate next year?  
   **A:** Orders have become lumpier due to mega projects, causing fluctuations in backlog. While volume growth could accelerate as capacity comes online, we may not see the same revenue acceleration because previous growth included significant pricing tailwinds that may not repeat.  **[ETN_3405087_16]** 

8. **Capital Deployment and Data Center Cooling**  
   **Q:** Is liquid cooling important for your data center offerings; considering M&A?  
   **A:** We have significant growth opportunities in data centers without focusing on adjacencies like cooling. While we wouldn't rule out considering it, it's not required for our continued growth. We're concentrating on organic growth and executing well on existing opportunities. Our deal pipeline is good, with data centers remaining a key focus.  **[ETN_3405087_12]** 

9. **Relationships with Hyperscalers**  
   **Q:** How are your relationships with hyperscalers affecting agreements?  
   **A:** We have strong relationships with all hyperscale data center customers, our fastest-growing segment. Due to capacity challenges, discussions now involve more forward commitments, leading to more transparent and committed commercial agreements as customers ensure they have the capacity for their growth.  **[ETN_3405087_14]** 

10. **China Performance**  
    **Q:** How is your business performing in China amid market concerns?  
    **A:** Our China business performed very well in Q3, with growth close to **double digits**. Our outlook remains robust, thanks to specific actions like joint ventures that expanded our capabilities and capacity. Our team in China is executing effectively, and we anticipate continued strength.  **[ETN_3405087_24]** 

11. **Hurricane Impact**  
    **Q:** What was the hurricane's impact on your operations in the Carolinas?  
    **A:** The hurricane caused challenges at the end of Q3 and beginning of Q4, slightly affecting revenues in our Electrical Americas business. However, it's behind us now, all facilities are operational, and the impact was a timing issue with revenue shifting into backlog.  **[ETN_3405087_9]** 

12. **Capacity Expansion Timing**  
    **Q:** When will new capacity from investments come online?  
    **A:** The new capacity will come online over the next 2 to 3 years, with some additions already in progress. As capacity comes online, we expect it to support volume growth, though start-up inefficiencies may impact margins initially.  **[ETN_3405087_28]** 

13. **Vehicle Business Margins**  
    **Q:** How are you offsetting weakness in vehicle end markets?  
    **A:** We've improved operational execution and managed our portfolio effectively in the vehicle business, leading to strong margins of **19.4%** despite declining growth. We expect continued solid performance even if end markets remain weak.  **[ETN_3405087_26]** 

14. **Short-Cycle Europe Outlook**  
    **Q:** Is there evidence of recovery in Europe's short-cycle markets?  
    **A:** We believe we've reached the bottom in short-cycle markets like residential and MOEM in Europe. We're starting to see signs of improvement, and our outlook anticipates growth as interest rates stabilize and demand picks up.  **[ETN_3405087_24]** 

15. **Manufacturing Footprint Expansion**  
    **Q:** How is capacity expansion affecting your manufacturing footprint?  
    **A:** We're expanding capacity through a combination of adding lines to existing facilities, expanding current sites, and building new greenfield facilities. This mixed approach allows us to address capacity constraints effectively across different product areas.  **[ETN_3405087_20]** 

16. **Past-Due Backlog Situation**  
    **Q:** Is growing backlog causing bottlenecks in fulfilling orders?  
    **A:** Growing backlog reflects strong market demand and better visibility into customer requirements. Our past-due backlog has decreased, and we're working closely with customers. Lead times are competitive, and we're not a bottleneck for the industry.  **[ETN_3405087_28]** 

17. **Hyperscaler Capacity Commitments**  
    **Q:** Are hyperscalers’ CapEx plans affecting your capacity planning?  
    **A:** Yes, capacity challenges have led to hyperscalers seeking more forward commitments. This competitive dynamic is resulting in better, more committed commercial agreements, and we're adjusting our capacity planning to meet their growth needs.  **[ETN_3405087_14]** 

18. **Margin Improvement in Electrical Global**  
    **Q:** Will restructuring help close the margin gap with Electrical Americas?  
    **A:** Yes, restructuring efforts are focused on businesses with lower margins, including Electrical Global. While restructuring helps, returning to growth in Europe is crucial, as higher incremental margins on increased volume will significantly improve overall margins.  **[ETN_3405087_27]** 

19. **Hedge Fund Investors’ Concerns**  
    **Q:** What's your message to investors about future growth and margins?  
    **A:** We're confident about future growth due to strong market demand, significant investments in capacity, and our ability to outgrow end markets. Margins are expected to improve through operational efficiencies, restructuring, and leveraging higher volumes. [Overall]

20. **Aerospace Business Impact**  
    **Q:** How are strikes affecting your aerospace business?  
    **A:** We've adjusted our Q4 outlook to account for potential impacts from ongoing strikes. While the timing of resolution is uncertain, we anticipate any delayed aircraft production will shift demand into 2025 and beyond. Our aftermarket business may see a positive mix impact over time.  **[ETN_3405087_24]** 

f76f9f856b7a43e771843391be136a62dd13cae623a577adec88185721a92976

- **Weaker-than-expected performance in the European market** is impacting Eaton's Electrical Global segment due to macroeconomic pressures and **lack of reindustrialization trends** compared to the U.S. This may continue to affect overall growth.  **[ETN_3395691_15]** ,  **[ETN_3395691_10]** ,  **[ETN_3395691_18]**
- Despite strong revenue growth, Eaton anticipates **flat operating margins in the second half of the year** due to increased expenses from **capacity expansion, ramp-up costs, depreciation, and investments in commercial resources**, which could limit profitability improvements.  **[ETN_3395691_25]** ,  **[ETN_3395691_19]**
- The **impending retirement of CEO Craig Arnold in May next year** introduces leadership transition risks, potentially causing uncertainty in Eaton's strategic direction and execution.  **[ETN_3395691_23]**

3fd233759374adcb8e4198cc8845367fc90afe27144bc8b668cfd894bd4767e7

1. **Data Center Growth**  
   **Q:** How is data center demand impacting growth?  
   **A:** Data center markets are growing rapidly, with growth over **20%**  **[ETN_3381534_9]** , and negotiations up **4x**.  **[ETN_3381534_9]**  The rise of AI is accelerating demand, leading to outsized growth in orders, which will contribute significantly to future revenues.  **[ETN_3381534_9]** 

2. **Capacity Constraints and Investments**  
   **Q:** Is $1 billion investment enough to meet demand?  
   **A:** We are reassessing whether the **$1 billion** incremental investment is sufficient.  **[ETN_3381534_27]**  We aim to ensure we have enough capacity and are prepared to invest more to avoid being the bottleneck amid strong demand.  **[ETN_3381534_27]** 

3. **Margin Outlook**  
   **Q:** Why might margins decline sequentially in Electrical Americas?  
   **A:** Margins may decrease due to increased investments in capacity, commercial front end, and technology.  **[ETN_3381534_11]**  These investments are essential for supporting future growth, despite short-term impacts on margins.  **[ETN_3381534_11]** 

4. **Electrical Americas Growth**  
   **Q:** Is the guidance for Electrical Americas growth conservative?  
   **A:** Given the strong **17%** organic growth in Q1  **[ETN_3381534_21]** , we might outperform our current guidance. However, it's early in the year, so we are prudent in our outlook.  **[ETN_3381534_21]** 

5. **Long-Term Supply Agreements**  
   **Q:** Are you engaging in long-term supply agreements?  
   **A:** Yes, we're signing multiyear agreements with customers to secure capacity amid constraints.  **[ETN_3381534_12]**  These contracts help us support growing demand, particularly in data centers.  **[ETN_3381534_12]** 

6. **Electrical Global Performance**  
   **Q:** How confident are you in Electrical Global's growth?  
   **A:** Despite a soft start, we're confident in achieving low to mid-single-digit organic growth.  **[ETN_3381534_14]**  Asia is growing, with China up **high single digits**  **[ETN_3381534_23]** , but Europe remains weak.  **[ETN_3381534_14]** 

7. **China Electrical Business**  
   **Q:** How is your China electrical business performing?  
   **A:** Our China business grew **high single digits** in Q1  **[ETN_3381534_23]** , with joint ventures growing **35%** in 2023.  **[ETN_3381534_23]**  Our strategy through JVs is yielding strong results.  **[ETN_3381534_23]** 

8. **Competitive Landscape**  
   **Q:** Are you seeing shifts in market share or new entrants?  
   **A:** We don't anticipate significant share shifts.  **[ETN_3381534_28]**  While competitors are adding capacity, we are winning mega projects and remain well-positioned, with strong channels and no material impact from new entrants.  **[ETN_3381534_28]** 

9. **Order Conversion and Lead Times**  
   **Q:** Are orders converting further out than normal?  
   **A:** Lead times haven't materially changed; orders booked should convert at consistent lead times seen over the last 1.5 years.  **[ETN_3381534_17]**  We haven't seen significant changes in order patterns.  **[ETN_3381534_17]** 

10. **Channel Inventories**  
    **Q:** How are electrical channel inventories?  
    **A:** Inventories are well-balanced.  **[ETN_3381534_24]**  Backlogs continue to grow, with a book-to-bill ratio of **1.2** in Electrical  **[ETN_3381534_24]** , indicating strong demand and balanced inventories.

f48fa3ae0f5af7c943dc42cf1f573d3f617eac90d786b2654cd146c18d4cea59

- **Sequential Margin Decline Expected Due to Increased Investments:** The company anticipates that **margins will fall off** in Q2 as a result of **incremental spending and investments** in capacity expansion, technology, and commercial initiatives. This could pressure profitability in the near term.  **[ETN_3381534_15]** **[ETN_3381534_11]** **[ETN_3381534_16]**
- **Free Cash Flow Guidance Unchanged Despite Higher Earnings:** Despite raising the **adjusted EPS guidance** by **$0.25**, the company did not increase its free cash flow guidance, potentially indicating concerns over working capital or cash flow generation. Management stated it's **too early in the year** to adjust the free cash flow outlook.  **[ETN_3381534_22]**
- **Expected Deceleration in Electrical Americas Growth:** After a strong **17% organic growth** in Q1, management expects growth in the Electrical Americas segment to decelerate due to more challenging comparisons and less contribution from price increases in subsequent quarters, which could signal a potential slowdown in growth momentum.  **[ETN_3381534_21]**

fb753f99657f1fdadb49110e83c153ba8fb91e737c963cfd7c93c58a21541940

- **Electrical Americas margins are expected to decline in Q4**, which is unusual given seasonal trends where margins typically increase, raising concerns about future profitability.  **[ETN_3405087_10]**
- **Capacity constraints may limit growth**, as significant capacity additions needed to meet demand will take 2-3 years to come online, potentially causing bottlenecks and hindering Eaton's ability to fully capitalize on strong market demand.  **[ETN_3405087_28]** **[ETN_3405087_15]**
- **Operating margins in the Electrical Global segment decreased by 310 basis points versus prior year**, primarily due to a real estate transaction in 2023, indicating challenges in maintaining profitability in certain segments.  **[ETN_3405087_4]**

84c7b6be23c3fe94bb8185948049eb09d9fc3ed07d970833925310d307461b26

- **Broad-Based Increase in Project Activity and Record Negotiations**: Eaton is experiencing a **16% growth in both mega projects and smaller projects under $1 billion**, leading to a **broad-based increase in project-related business**. The company has **not seen any slowdown** and reports that **negotiations in the electrical business continue to be at record high levels**.  **[ETN_3395691_9]**
- **Strong Growth in Key Markets with Future Upside from AI Data Centers**: Eaton's main businesses in **data centers, utility, industrial, commercial, and institutional markets are **not seeing any sluggishness**. The growth is driven by **megatrends** that are **overwhelming any weakness in smaller areas**. Additionally, the **massive increase in data center demand**, including a **backlog of data center projects close to $140 billion**, represents **eight years of production**, and **AI-related data center growth is still ahead**, offering significant future growth potential.  **[ETN_3395691_18]** **[ETN_3395691_11]**
- **Positive Outlook in Commercial Aerospace and Utility Markets**: Eaton views the **commercial aerospace industry as an outstanding industry in the short, medium, and long term**, with **one of the best growth outlooks in the company** due to its technology differentiation, large aftermarket, and attractive returns. In the **utility market**, Eaton expects **long-term growth rates in the low teens**, driven by **energy transition, electrification, climate change, and the need to build grid resiliency**.  **[ETN_3395691_30]** **[ETN_3395691_7]**

4449f4802ab190d3e2205d7403a7266a9f01017ec6294517858c16fb414d2406

- **Eaton is undertaking a significant restructuring program costing \$375 million to deliver \$325 million of mature year benefits by 2027, which may disrupt operations and create execution risks during a time of strong demand**.  **[ETN_3371574_9]**
- **The company expects price to contribute less to growth in 2024 compared to previous years, which could indicate potential pricing pressures and may impact profit margins if volume growth does not compensate**.  **[ETN_3371574_15]**
- **Eaton's reliance on mega projects for future growth may pose a risk, as delays or cancellations of these projects could adversely affect backlog and future revenues**.  **[ETN_3371574_13]**

d2371708b4fed5bb84c6a7657f0ebef466479d80b9b9b74eee49696be3330c6e

- **Eaton's restructuring program aims to deliver $325 million in mature year benefits by 2027, leading to margin expansion over the next three years without offsetting expenses**.  **[ETN_3371574_21]** **[ETN_3371574_9]** **[ETN_3371574_22]**
- **The company has a strong backlog and has won over $1 billion in mega project orders with a 40% win rate, expecting these projects to contribute positively to revenue without diluting margins**.  **[ETN_3371574_17]** **[ETN_3371574_13]**
- **Eaton plans to return $2 billion to shareholders through share repurchases in 2024 while maintaining financial flexibility for strategic M&A, supported by strong cash flow generation and a solid balance sheet with net leverage of 1.3**.  **[ETN_3371574_16]**

dece6250252faec8a5f890bb27cab3838d53d14b32c974ced783a6d6723cbfe9

Eaton Corporation PLC (ETN)

Financials