Eaton Projects 2025 Profit Above Estimates on Data Center Demand Surge
Eaton Corporation projects its 2025 adjusted profit to surpass Wall Street estimates, citing continued robust demand for electrical equipment driven by the proliferation of artificial intelligence (AI)-related data centers.
The growing global demand for data centers as companies prioritize AI development and adoption has fueled growth for electrical equipment manufacturers like Eaton. Shares of the company rose 2.7% in premarket trading following the announcement.
In the fourth quarter, sales for the electrical business in the Americas surged by 9%, while sales in the global electrical segment increased by 4%. However, the industry's growth could face challenges from Chinese start-up DeepSeek's innovative AI model. The model is reportedly less expensive and consumes less electricity than OpenAI's ChatGPT, raising concerns that newer technologies may have reduced power requirements.
Excluding special items, the Ireland-based company anticipates its 2025 profit to range from $11.80 to $12.20 per share, with the midpoint exceeding analysts' consensus estimate of $11.95 per share. Net sales for the quarter ended December 31st totaled $6.24 billion, an increase from $5.97 billion year-over-year. Analysts' average forecast was $6.33 billion.