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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)

Microsoft Excel
3 months ended: Sep 30, 2026 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 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of products sold -65.30 -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 34.70% 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 -14.28 -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 -2.66 -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 0.00 0.50 0.00 12.53 0.00 0.00
Operating income 17.76% 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 -2.21 -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 -0.23 -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 15.31% 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 -3.25 -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 12.06% 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 -0.01 -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 12.05% 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: 2026-09-30), 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).

An analysis of the common-size income statement reveals a period of significant margin expansion followed by a moderate contraction and increased financial volatility. From early 2021 through late 2024, the organization demonstrated a consistent ability to reduce the relative cost of products sold, which drove substantial growth in both gross and operating profit margins. However, the trend shifted in 2025 and 2026, characterized by rising production costs and a notable increase in interest expenses.

Gross Profitability and Cost Management
Gross profit margins exhibited a steady upward trajectory from 32.14% in March 2021 to a peak of 38.93% in September 2024. This growth was primarily driven by a sustained reduction in the cost of products sold, which fell from 67.86% to 61.07% over the same period. Following this peak, a reversal occurred; cost of products sold increased to 66.53% by March 2026, causing gross margins to contract to 33.47% before a slight recovery to 34.70% by September 2026.
Operating Expense Trends
Selling and administrative expenses remained relatively stable, generally fluctuating between 14% and 17% of net sales. A slight improvement in efficiency is observed in 2025 and 2026, where expenses occasionally dipped to the 14% range. Research and development spending remained highly consistent as a percentage of sales, hovering between 2.66% and 3.41%, indicating a disciplined and steady investment in innovation regardless of fluctuations in overall revenue or gross margin.
Operating Income and Net Profitability
Operating income margins showed significant growth, rising from approximately 12% in 2021 to peak levels near 19.6% in late 2024. An anomaly is noted in September 2021, where operating income spiked to 24.70% due to a one-time gain on the sale of a business representing 12.53% of net sales. Net income attributable to ordinary shareholders followed a similar growth pattern, increasing from 9.76% in March 2021 to a high of 16.03% in September 2025. However, a sharp decline to 9.62% was recorded in June 2026 before recovering to 12.05% by the end of the analyzed period.
Financial Costs and Non-Operating Items
Interest expense as a percentage of net sales was negligible and stable for several years, typically remaining below 1%. A significant shift occurred in 2026, with interest expenses rising sharply to a peak of 2.36% in June 2026. This increase in financial costs exerted downward pressure on the income before income taxes and net income during the latter part of the period, offsetting some of the operational gains.

Overall, the data indicates a strong operational performance peak between 2023 and 2024, where the combination of lower production costs and stable operating expenses maximized profitability. The subsequent period in 2025 and 2026 suggests a more challenging environment, marked by the erosion of gross margins and a substantial increase in the cost of debt servicing, leading to a compression of the net profit margin.

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