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SEC filingEaton delivered strong top-line growth and cash generation in Q1 2026, with revenue up 16.8% and operating cash flow more than doubling year-over-year; however, net income and EPS declined due to higher acquisition-related expenses and a less favorable effective tax rate profile.
Revenue for Q1 2026 totaled $7.5 billion, an increase of 16.8% compared to $6.4 billion in Q1 2025. This growth reflects continued execution against Eaton’s strategic priorities, including organic expansion and portfolio evolution. Gross profit rose to $2.7 billion, up 8.4% year-over-year, while gross margin held at 35.6%. The margin outcome demonstrates resilience amid ongoing input cost volatility and supply chain dynamics, supported by pricing discipline and operational efficiency initiatives.
Net income for the quarter was $866.0 million, a decrease of 10.2% from $964.0 million in Q1 2025. Diluted EPS was $2.22, down 9.4% from $2.45 in the prior-year period. The decline in earnings reflects two primary factors identified in management’s discussion: higher acquisition and divestiture costs, which increased Other expense — net, and a less favorable effective tax rate profile. Specifically, the effective tax rate increased due to greater levels of income in higher-tax jurisdictions and the absence of a prior-year benefit related to foreign unrecognized tax benefits.
Operating cash flow strengthened significantly, totaling $507.0 million — more than double the $238.0 million generated in Q1 2025. This improvement reflects enhanced working capital management and robust underlying business performance. Capital expenditures were $193.0 million, up from $147.0 million in the prior-year quarter. Free cash flow totaled $314.0 million. As noted in management’s discussion, the Company plans to increase capital expenditures over the next several years to expand production capacity across various markets to support anticipated growth — a strategic commitment reflected in this quarter’s outlay. These investments align with Eaton’s focus on deploying capital toward businesses that provide opportunities for above-market growth, strong returns, and alignment with secular power management trends.