ETN · 10-Q · 2026Q3 · Full report

Margin Drivers

Eaton Corp plc · 2026-11-03 · Importance 37 · Surprise 32

Consolidated gross margin fell to 34.7% in third-quarter 2026 from 38.3% a year earlier, primarily due to 360 basis points of commodity and wage inflation and 210 basis points of higher intangible amortization, partly offset by 200 basis points from higher sales. Nine-month gross margin declined to 34.5% from 37.9%, with 380 basis points of pressure from commodity and wage inflation and 140 basis points from amortization, partly offset by 160 basis points from higher sales. Electrical Americas’ third-quarter operating margin decreased to 29.8% from 30.3%, as inflation and growth-support costs outweighed sales gains. Electrical Global’s margin increased to 21.1% from 19.1%, while Aerospace decreased to 24.9% from 25.9% and Mobility increased to 17.2% from 13.5%, reflecting differing effects from inflation, mix, sales, acquisitions, and operating efficiencies.

Key facts

• Eaton's third-quarter 2026 gross profit margin was 34.7%, down from 38.3% in the third quarter of 2025; higher commodity and wage inflation reduced it by 360 basis points and higher intangible amortization by 210 basis points, partly offset by a 200-basis-point increase from higher sales. source
• Eaton's gross profit margin for the first nine months of 2026 was 34.5%, down from 37.9% in 2025; commodity and wage inflation reduced it by 380 basis points and higher intangible amortization by 140 basis points, partly offset by 160 basis points from higher sales. source
• Electrical Americas' third-quarter 2026 operating margin was 29.8%, down from 30.3%; higher commodity and wage inflation reduced it by 250 basis points and growth-support costs by 100 basis points, partly offset by 300 basis points from higher sales. source
• Electrical Global's third-quarter 2026 operating margin was 21.1%, up from 19.1%; higher sales added 330 basis points, Boyd Thermal added 150 basis points, and operating efficiencies added 150 basis points, partly offset by 410 basis points from commodity and wage inflation. source
• Aerospace's third-quarter 2026 operating margin was 24.9%, down from 25.9%; commodity and wage inflation reduced it by 230 basis points and unfavorable mix by 100 basis points, partly offset by 160 basis points from efficiencies and 110 basis points from higher sales. source
• Mobility's third-quarter 2026 operating margin was 17.2%, up from 13.5%; favorable mix added 270 basis points, operating efficiencies 250 basis points, and higher sales 140 basis points, partly offset by 320 basis points from commodity and wage inflation. source