Power management and equipment company Eaton announced record sales numbers as data center demand is rising and concerns grow about their effect on the grid.
Eaton makes products for the data center, utility, industrial, commercial, machine building, residential, aerospace, and mobility markets.
Eaton’s sales in this quarter were $6.4 billion, a record and up 8% from the second quarter of 2023. The company said segment margins were 23.7%, also a quarterly record.
“We continue to see strong demand across our markets – due to electrification, energy transition, and reindustrialization,” said Craig Arnold, Eaton’s chairman and chief executive officer. “We’re making capacity investments in key product lines to support structurally higher growth, and we remain confident in our outlook. As a result, we are increasing our guidance for the year.”
The U.S. grid will have to double or triple by 2050 to keep up with economy-wide electrification and the energy transition, according to the Energy Information Administration, and Eaton appears to be positioned to capitalize.
According to a study published by EPRI in May, data centers could consume up to 9% of U.S. electricity generation by 2030 — more than double the amount currently used. One trend is the growing size of each data center. It’s no longer uncommon to see companies asking for 500 MW of power for a single campus. Dominion Energy noted it is receiving requests to power larger data center campuses that require total capacity ranging from 300 MW to as many as “several gigawatts.”
While the discourse around data center growth has picked up over the past year, Eaton may have been ahead of the curve. The company acquired an Ireland-based data center energy equipment supplier, Power Distribution Inc., in 2020. Last year, Eaton broke ground on a $100 million plant expansion for manufacturing voltage regulators and three-phase transformers to meet surging utility demand.
Eaton’s grid division in the Americas recorded sales of $2.9 billion, up 13% from the second quarter of 2023, while operating profits reached $859 million, up 28%.
“We’re making capacity investments in key product lines to support structurally higher growth, and we remain confident in our outlook,” Arnold while telling investors he plans to increase revenue targets.
