Eaton’s first-quarter 2026 net sales rose to $7.451 billion from $6.377 billion a year earlier, a 17% increase driven by 10% organic growth, 4% from acquisitions and 3% from foreign currency. Net income attributable to ordinary shareholders fell 10% to $866 million from $964 million, while adjusted earnings increased 2% to $1.094 billion from $1.070 billion. Adjusted earnings per share rose 3% to $2.81 from $2.72, even as diluted GAAP earnings per share declined 9% to $2.22 from $2.45.
Gross profit increased to $2.652 billion from $2.447 billion, but gross margin narrowed to 35.6% from 38.4%. Eaton said the margin decline reflected a 400-basis-point hit from commodity and wage inflation, partly offset by an 80-basis-point gain from operating efficiencies and a 70-basis-point benefit from higher sales. Income before taxes slipped to $1.107 billion from $1.177 billion, and the effective tax rate rose to 21.6% from 18.0%.
Acquisition, integration, divestiture and transaction costs jumped to $109 million from $10 million. After tax, those charges were $87 million, or $0.22 per diluted share, versus $8 million, or $0.02, a year earlier. Eaton also recorded $140 million of intangible asset amortization expense, up from $106 million, and after-tax restructuring charges of $30 million versus $14 million.
By segment, Electrical Americas posted sales of $3.600 billion, up 20% from $3.010 billion, with operating profit of $922 million versus $904 million. Operating margin fell to 25.6% from 30.0%. Organic sales rose 14%, acquisitions added 5%, and foreign currency added 1%. Backlog climbed to $14.459 billion from $10.050 billion, up 44%, and organic backlog rose 32%. Organic customer orders increased 42%, and book-to-bill was 1.2 versus 1.0.
Electrical Global sales increased 21% to $1.945 billion from $1.610 billion, while operating profit rose 24% to $373 million from $300 million. Operating margin improved to 19.2% from 18.6%. Organic sales rose 9%, acquisitions contributed 6%, and foreign currency 6%. Backlog reached $3.162 billion, up from $1.832 billion, a 73% increase, with organic backlog up 20% and organic customer orders up 13%. Book-to-bill was 1.1, unchanged from the prior year.
Aerospace sales advanced 16% to $1.139 billion from $979 million, and operating profit jumped 35% to $304 million from $226 million. Operating margin widened to 26.7% from 23.1%. Organic sales grew 9%, acquisitions added 5%, and foreign currency 2%. Backlog rose to $5.004 billion from $3.899 billion, up 28%, with organic backlog up 15% and organic customer orders up 13%. Book-to-bill was 1.1, unchanged from a year earlier.
Eaton’s restructuring program, launched in the first quarter of 2024, has generated $374 million of charges so far. The company expects another $78 million in workforce reduction costs and $24 million in plant closing and other costs, bringing total estimated charges to $475 million. Eaton says the program should be completed in 2026 and is expected to produce $375 million of mature-year benefits.
The company also disclosed four acquisitions completed between April 2025 and March 2026: Fibrebond Corporation, Resilient Power Systems, Ultra PCS Limited and Boyd Thermal. Eaton said it announced on January 26, 2026, its intention to spin off its Mobility business into an independent public company, with completion targeted by the end of the first quarter of 2027.
Eaton said it serves customers in 180 countries and reported 2025 revenue of $27.4 billion. The market has reacted to these announcements by moving the company's shares -4.37% to a price of $404.0001. For more information, read the company's full 10-Q submission here.
