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Call sheet · Q2'26

Eaton (ETN)

Q2'26 earnings call · held July 31, 2026 · compared with the Q1'26 call · management-credibility review
7/12
Disclosure score
2 high, 4 medium, 1 low flags
Financial quality
Bottom line
Boyd is crushing it at $1.8B run-rate while the core Americas business is drowning in capacity costs despite 18% growth. The market sees record backlog and assumes near-term riches, but management admitted only 20% converts soon, with 80% pushing to 2028+. The binding constraint isn't demand, it's the inability to convert capacity investments to margins: 'temporary negative price costs' forced them to panic-pull Q4 pricing into Q3. Most revealing quote: 'I would be shocked if they cannot over deliver', Ruiz on Boyd, suggesting the acquisition is the only thing working. My view changes if Q3 Americas margins break 29% without Boyd contribution.

The 30-second version

  • Boyd's liquid cooling business is running at $1.8B annualized rate, not the $1.4B Eaton will recognize
  • Electrical Americas hit 18% organic growth but margins cratered to 27.5% despite all the capacity coming online
  • Data center backlog exploded to 307 gigawatts (15 years of work), but only 20% converts near-term

What changed this quarter

MetricQ1'26Q2'26Change
Revenue$7.5B (17% YoY)$8.5B (21% YoY)+400 bps growth acceleration
Adjusted EPS$2.81 (Q1 record)$3.15 ($0.10 beat)+12% sequential
Electrical Americas Revenue14% organic18% organic+400 bps acceleration
Electrical Americas Margins25.6%27.5%+190 bps sequential BUT still below expectations
Electrical Global Revenue9% organic18% organicDOUBLED growth rate
Data Center Revenue Growth~50% YoY65% YoY+1500 bps acceleration
Boyd Thermal RevenueNot disclosed$432M in Q220% above internal guidance
Total Company Book-to-Bill1.2x1.2xFlat despite massive growth
Americas Book-to-BillNot disclosed1.3xExpanding despite 18% growth
Operating Cash FlowUp 245% YoYUp 23% YoYMassive deceleration

Accountability tracked

7 new promises made4 narrative shifts flagged7 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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