Eaton (NYSE:ETN) Chief Executive Officer Paulo Ruiz told investors at Morgan Stanley’s Laguna Conference that the company’s strategy is gaining momentum, supported by strong electrical-market demand, manufacturing capacity additions and a portfolio increasingly focused on data centers and aerospace.
Ruiz said Eaton initially forecast 8% organic growth for 2026, later raised that outlook to 10%, and most recently said it could achieve 12%. He said the company had a “very strong” July and August and was targeting the high end of its existing guidance ranges for the third quarter and full year.
Manufacturing ramps and 2027 setup
Eaton has been expanding capacity across 24 facilities, with 16 now in ramp-up phases, according to Ruiz. He said the company experienced the greatest disruption from those projects in the fourth quarter of the prior year and the first quarter of 2026, but production rates have since improved.
In Electrical Americas, revenue per day rose 25% in the second quarter compared with January of the prior year, Ruiz said. He added that the business increased revenue about 16% over five quarters, including an 8% sequential increase from the first to second quarter.
Ruiz said pricing actions taken in April and August, along with selective backlog repricing, should support price-cost trends. Record backlogs and continued end-market strength also provide a favorable foundation looking toward 2027, he said, while declining to provide formal guidance for that year.
Additional factors expected to affect the 2027 setup include Boyd beginning to count as organic growth in the second quarter of next year and Eaton’s planned separation of its Mobility business through a Reverse Morris Trust transaction with Dana. Ruiz said both developments are expected to help growth and margins.
Data-center portfolio expands
Ruiz said Eaton deployed $13 billion in capital on acquisitions and portfolio actions, concentrating on data centers and aerospace. The company plans to continue pursuing bolt-on activity, particularly in electrical markets, but does not expect to undertake acquisitions as large as Boyd over the next couple of years.
The CEO highlighted acquisitions including Resilient Power, Fibrebond and Boyd as examples of Eaton’s effort to broaden its data-center offering. Fibrebond provides modular power infrastructure, which Ruiz said can address skilled-labor shortages, cut construction time and potentially free space inside data-center buildings for revenue-generating servers.
Fibrebond generated $375 million in revenue during the 12 months before its acquisition, Ruiz said, and more than $600 million in the 12 months after it joined Eaton. The company is expanding an existing Fibrebond site and has announced a new Arkansas factory, initiatives Ruiz said would each double capacity.
Boyd adds liquid-cooling capabilities. Ruiz said the business generated $1.1 billion of revenue last year and Eaton raised its 2026 expectation to $1.8 billion. He pointed to Boyd’s engineering staff and its presence across multiple future silicon platforms as key reasons for the acquisition.
800-volt DC opportunity and rising content
Ruiz said Eaton is positioning itself for an eventual transition to 800-volt DC data-center architectures. He identified four areas where the company aims to lead: medium-voltage solid-state transformers, DC breakers, power electronics and liquid cooling.
Eaton has received orders for 10 solid-state-transformer prototypes and is preparing flexible manufacturing lines that can produce either uninterruptible power systems or solid-state transformers, Ruiz said. The company is also seeing larger bids emerge during the second half of the year.
The transition from cloud data centers to AI data centers has already increased Eaton’s content opportunity, according to Ruiz. He said content per megawatt increased to $3 million in AI applications from $1.5 million in cloud applications before the Boyd acquisition, and to $3.4 million after the acquisition. He said $3.4 million per megawatt remains the appropriate figure for investors to use while designs continue to evolve.
Broad demand beyond data centers
Data-center revenue rose about 65% and orders increased about 85%, Ruiz said, while the company’s data-center negotiation pipeline climbed more than 130%. He cited 342 gigawatts of announced data-center projects, compared with approximately 50 gigawatts of installed operating capacity today, though he cautioned that much of this activity would unfold over a longer cycle rather than becoming 2027 or 2028 revenue.
Ruiz also pointed to commercial and institutional markets, utilities, industrial facilities, machine original-equipment manufacturers, distributed IT and aerospace as additional growth avenues. Utility demand is being supported by electrification, grid hardening, aging infrastructure and generation additions, he said.
Electrical Global posted 18% organic growth, with Asia-Pacific and Europe, Middle East and Africa both growing 20% organically and global energy infrastructure growing at a high-teens rate, Ruiz said. Data-center growth in the global segment matched the 65% growth rate reported in North America, while total global backlog increased 103% year over year. Excluding Boyd, legacy electrical-global backlog rose 54%, he said.
Ruiz said Eaton’s 2030 electrical revenue target of $31 billion should be viewed as a floor, citing stronger-than-modeled data-center growth, acquisitions and the expected Mobility separation. He said the company may provide investors with a mid-cycle review next year.
About Eaton (NYSE:ETN)
Eaton plc is a power management company that helps businesses, utilities, data centers, industrial facilities and other customers manage electrical, hydraulic and mechanical power more safely and efficiently. Its products and systems support power distribution, circuit protection, power quality, backup power, industrial automation and energy management.
The company also supplies aerospace systems, including hydraulic, fuel, motion-control and air-management equipment, as well as components and systems for commercial and military aircraft.
