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Eaton Corp. plc (NYSE:ETN)

Common-Size Income Statement
Quarterly Data

Eaton Corp. plc, common-size consolidated income statement (quarterly data)

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3 months ended: Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021
Net sales 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of products sold -66.53 -64.41 -63.18 -61.72 -63.05 -61.63 -61.07 -61.45 -62.05 -62.68 -62.54 -62.65 -63.88 -65.64 -65.86 -66.72 -67.25 -67.50 -67.24 -67.80 -67.98 -67.86
Gross profit 33.47% 35.59% 36.82% 38.28% 36.95% 38.37% 38.93% 38.55% 37.95% 37.32% 37.46% 37.35% 36.12% 34.36% 34.14% 33.28% 32.75% 32.50% 32.76% 32.20% 32.02% 32.14%
Selling and administrative expense -14.49 -17.03 -14.30 -15.81 -16.35 -16.43 -16.07 -16.20 -16.08 -17.25 -16.02 -16.14 -16.81 -16.49 -14.78 -15.30 -15.89 -16.31 -15.65 -16.94 -16.80 -16.94
Research and development expense -2.66 -2.83 -2.89 -2.90 -2.73 -3.10 -3.24 -3.26 -3.09 -3.18 -3.37 -3.18 -3.19 -3.26 -3.10 -3.11 -3.22 -3.41 -3.38 -3.09 -2.95 -3.15
Gain on sale of business 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.50 0.00 12.53 0.00 0.00
Operating income 16.32% 15.73% 19.63% 19.56% 17.87% 18.83% 19.62% 19.09% 18.79% 16.89% 18.07% 18.03% 16.13% 14.61% 16.25% 14.87% 13.64% 13.28% 13.73% 24.70% 12.27% 12.04%
Interest expense, net -2.36 -1.42 -0.99 -0.96 -1.01 -0.52 -0.67 -0.46 -0.46 -0.50 -0.44 -0.56 -0.72 -0.91 -0.82 -0.70 -0.59 -0.66 -0.67 -0.75 -0.71 -0.81
Other income (expense), net -0.55 0.55 -0.30 -0.36 0.01 0.14 -0.26 0.35 0.49 0.45 0.60 0.88 -0.10 0.20 0.39 -0.62 0.77 0.17 -0.04 -1.34 0.33 0.23
Income before income taxes 13.41% 14.86% 18.34% 18.25% 16.88% 18.46% 18.69% 18.98% 18.82% 16.84% 18.23% 18.35% 15.31% 13.90% 15.82% 13.55% 13.81% 12.78% 13.03% 22.61% 11.89% 11.47%
Income tax expense -3.76 -3.21 -2.28 -3.79 -2.90 -3.32 -3.13 -3.04 -3.17 -3.01 -2.36 -3.18 -2.61 -2.24 -2.38 -2.11 -2.28 -1.78 -1.54 -9.81 -2.19 -1.68
Net income 9.65% 11.65% 16.06% 14.45% 13.97% 15.13% 15.56% 15.93% 15.65% 13.83% 15.87% 15.17% 12.70% 11.65% 13.45% 11.44% 11.53% 11.01% 11.48% 12.80% 9.70% 9.78%
Net income for noncontrolling interests -0.02 -0.03 -0.03 0.00 0.00 -0.02 0.00 -0.03 -0.02 -0.02 -0.03 -0.02 -0.02 -0.02 -0.04 -0.02 0.00 -0.02 0.00 -0.02 0.00 -0.02
Net income attributable to Eaton ordinary shareholders 9.62% 11.62% 16.03% 14.45% 13.97% 15.12% 15.56% 15.90% 15.64% 13.81% 15.84% 15.15% 12.68% 11.64% 13.41% 11.42% 11.53% 10.98% 11.48% 12.78% 9.70% 9.76%

Based on: 10-Q (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).

The financial trajectory from early 2021 through mid-2026 is characterized by a significant period of margin expansion followed by a notable contraction in the final year of the period. Profitability reached a peak in late 2024 and 2025 before experiencing downward pressure in early to mid-2026.

Gross Profitability and Cost Management
A sustained improvement in gross margins is observed from March 2021 through September 2024. The cost of products sold decreased from a high of 67.98% in June 2021 to a low of 61.07% by December 2024, resulting in gross profit expanding from 32.14% to 38.93% over the same period. However, this trend reversed starting in 2025, with the cost of products sold climbing back to 66.53% by June 2026, bringing the gross profit margin down to 33.47%.
Operating Expense Trends
Selling and administrative expenses remained relatively stable, generally fluctuating between 14% and 17% of net sales. A period of relative efficiency was noted between September 2022 and December 2025, where expenses frequently dipped toward the 14-15% range. Research and development expenses showed high consistency, typically remaining between 2.6% and 3.4% of net sales, indicating a steady commitment to innovation regardless of fluctuations in overall profitability.
Operating Income and Non-Recurring Items
Operating income exhibited an upward trend, rising from approximately 12% in 2021 to a peak of 19.63% in September 2025. A significant anomaly occurred in September 2021, where operating income spiked to 24.70% due to a one-time gain on the sale of a business totaling 12.53% of net sales. Excluding this event, the underlying operational growth peaked in 2024 and 2025 before declining to 16.32% by June 2026.
Net Income and Financial Costs
Net income attributable to ordinary shareholders followed the general trend of the operating margin, growing from 9.76% in March 2021 to a peak of 16.03% in December 2025. A sharp decline is evident in the first half of 2026, with net income falling to 9.62% by June 2026. This decline is exacerbated by a substantial increase in net interest expense, which rose from a historical range of 0.4% to 0.9% to a peak of 2.36% in June 2026, suggesting increased debt servicing costs or higher interest rates impacting the bottom line.

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