Eaton to Post Q4 Earnings: What's in Store for the Stock This Season?

Eaton Corporation ETN is expected to report an improvement in both top and bottom lines when it reports fourth-quarter 2025 results on Feb. 3, before market open. The Zacks Consensus Estimate for earnings is currently pegged at $3.33 per share on revenues of $7.11 billion.

Fourth-quarter earnings estimates have gone down 0.6% over the past 60 days. The bottom-line projection indicates 17.67% increase from the year-ago quarter’s number. ETN expects its earnings to be in the range of $3.23 to $3.43 per share. The Zacks Consensus Estimate for quarterly revenues indicates a year-over-year increase of 13.87%.

ETN Stock’s Earnings Surprise History

Eaton’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 0.70%.

What the Zacks Model Unveils

Our proven model does not predict an earnings beat for Eaton this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you can see below.

Eaton Corporation, PLC Price and EPS Surprise

Eaton Corporation, PLC price-eps-surprise | Eaton Corporation, PLC Quote

You can uncover the best stocks before they are reported with our Earnings ESP Filter.

ETN’s Earnings ESP: Eaton has an Earnings ESP of -0.13%.

ETN’s Zacks Rank: Eaton currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Here are some stocks in the same sector that, according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported. 

Mueller Water Products MWA, Trimble Inc. TRMB and Watts Water Technologies WTS carry a Zacks Rank #2 (Buy) each at present. Currently, the Earnings ESP of MWA, TRMB and WTS are +5.00%, +1.91% and +0.59%, respectively.

Factors Likely to Have Driven ETN’s Q4 Earnings Performance

Eaton’s broad product portfolio and improvement in end market conditions continue to drive strong order wins, steadily increasing. Its strong backlog offers a reliable pipeline of future revenues, contributing to the company’s solid performance. A book-to-bill ratio of more than 1 on a rolling 12-month basis indicates a stable demand for Eaton’s products, which continues to support its earnings.

Electrification, global megatrends, the energy transition and reindustrialization have been driving growth across nearly 75% of Eaton’s end markets and are expected to support strong fourth-quarter results. Surging demand from power-intensive AI data centers has been creating new opportunities and further bolstering earnings.

Eaton’s ongoing investment in research and development has strengthened the quality of its existing products while supporting the development of new solutions for customers. This steady stream of innovation enables ETN to secure more orders and expand its market footprint, ultimately driving earnings growth. For the fourth quarter, the company expects organic revenues to increase 8.5-9.5%.

The ongoing repurchase of shares, through free cash flow, is also likely to have had a positive impact on the fourth-quarter earnings of the company.

ETN Stock Returns Better Than Its Industry

Eaton’s trailing 12-month return on equity (“ROE”) is 24.36%, ahead of the industry average of 19.27%. ROE is a financial ratio that measures how well a company uses its shareholders’ equity to generate profits. The company's current ROE indicates that it is using shareholders’ funds more efficiently than peers.

Eaton’s Shares Trading at a Premium

The company is currently valued at a premium compared with its industry on a forward 12-month P/E basis. Eaton is trading at 25.61X compared with its industry’s 23.03X.

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This article originally published on Zacks Investment Research (zacks.com).

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