Eaton , a maker of power management solutions for AI data centers and other commercial markets, delivered a solid quarter on Friday that raised more questions for us than it answered. Earnings per share for the first quarter ended in March rose more than 33% from the year-ago period to $2.72, beating the LSEG compiled analyst consensus estimate by a penny. Revenue rose 7.3% to $6.38 billion, beating the LSEG compiled analyst consensus estimate of $6.26 billion. Organic sales grew 9%, far exceeding the Bloomberg estimate for a 6.8% increase. Eaton Why we own it: Eaton has exposure to several important megatrends like electrification, energy transition, and infrastructure spending. It is also a player in generative AI, where data centers use its power management solutions and electrical equipment to keep up with the heightened demand for more computing power. We see a long runway for growth. Competitors : Parker-Hannifin , DuPont and Honeywell Most recent buy : April 3, 2025 Initiated : Nov. 15, 2023 Bottom line Has Eaton’s stock peaked? During our Morning Meeting, Jim Cramer said he’s concerned about it. In afternoon trading, shares of Eaton turned positive in a strong overall market. However, the stock has been struggling to get back to its 2025 closing high of $371 on Jan. 22, which was just days before the Chinese startup DeepSeek’s more efficient artificial intelligence model slammed the AI trade. Jim said he’s not ready to give up on Eaton, because it’s “doing quite well,” referring to the company’s largely positive first-quarter results and guidance. Indeed, the company reported accelerating organic sales growth with record first-quarter margins. However, he did say he needs to rethink the position, given the Club’s positions in DuPont and Dover also have ties to the AI trade. He also has his eye on GE Vernova in the Bullpen to fill out the electrification/power generation theme. ETN YTD mountain Eaton YTD In addition to Eaton’s revenue and EPS beats, sales at three of the company’s five segments — Electrical Americas, Electrical Global, and Aerospace were better than expected, with solid growth. The other two segments, Vehicle and eMobility missed, with the former sinking nearly 15% year over year and the latter up just 2.5%. Orders for the Electrical Americas segment, which accounts for nearly half of total company revenue, fell 4% organically on a 12-month rolling average. Excluding one large multi-year data center order in the first quarter of 2024, orders rose 4%. Jeff Marks, director of portfolio analysis for the Club, said Friday the market seemed to be aware of the order slowdown as Eaton and all multinational companies try to figure out President Donald Trump ‘s tariff endgame. Slowing order growth has been a multi-quarter trend due to tough comps going back to 2023. “Book-to-bill remained above one, with 6% growth in our large $10.1 billion backlog, providing strong visibility for our organic growth in 2025 and beyond,” CFO Olivier Leonetti said on the company’s post-earnings call. The data center end-market makes up 17% of Eaton’s total revenue, according to the company’s 2025 growth assumptions. On the call, incoming CEO Paulo Ruiz referred to the tech companies that reported earnings this week, which included Club names Amazon , Meta Platforms , and Microsoft , saying, “all the calls we have had this week, all the hyperscalers have confirmed the level of capex. So, we believe that this 15% CAGR for data centers is still intact.” Capex stands for capital expenditures, and CAGR stands for compound annual growth rate. Ruiz will become CEO following the May 31 retirement of Craig Arnold, who has been at the helm since 2016. Management also talked about the data center designs of the future that require Eaton to work with not only the hyperscaler clients, the big tech companies that run the facilities, but also with chipmakers. “Therefore, you need to have open discussions with the likes of … Nvidia and so on. Not many companies, especially foreign companies, can have a dialogue with them. So again, this is another entry barrier that creates” opportunity for Eaton in this development area of the end market, Ruiz said on the call. Eaton, which aims to manage through the tariffs, plans to adjust its costs, supply chains, and prices as needed. Ruiz said, “We will see how the tariff evolves. We expect over time to recover from a margin standpoint, but not this year.” The company expects to fully offset the impact of tariffs through USMCA, the 2020 United States-Mexico-Canada Agreement, compliance, supply chain optimization, disciplined cost containment, and commercial actions. Eaton believes its region-for-region strategy provides a competitive advantage. Guidance Eaton raised its full-year organic sales growth guidance range to 7.5% to 9.5% from 7% to 9%, but slightly lowered its segment margins outlook as a result of tariff cost pass-through. The company reaffirmed its full-year EPS guidance. The company’s second quarter adjusted EPS guidance of $2.85 to $2.95 was short of estimates. Perhaps, management was being a little conservative here. The outlook for Q2 organic sales growth and segment margins was fine. Management said on the call that these forecasts reflect the “net impact of the announced tariffs and assumes the current 90-day pause on reciprocal tariffs will persist to the end of the year.” (Jim Cramer’s Charitable Trust is long ETN, DD, DOV, AMZN, META, MSFT, NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Eaton Corporation signage at the NYSE
Source: NYSE
Eaton, a maker of power management solutions for AI data centers and other commercial markets, delivered a solid quarter on Friday that raised more questions for us than it answered.
“Honda hydrogen is open for business,” says David Perzynski, assistant manager of hydrogen solutions development at American Honda. “(We have) the fuel cell technology, the expertise, and the supply chain to power a variety of zero-emissions products, including commercial trucking and stationary power generation.”
The company arrived with a more developed version of its Peterbilt 579EV-based HFC semi concept, which is based on one of that brand’s existing BEVs and uses the Honda fuel cell as a range-extending generator for its 120 kWh battery … or, rather, it would – if it was ever plugged into a charger.
On battery power alone, the big Pete is good for up to 150 miles of fully loaded range. With the fuel cell along for the piggyback ride, however, the truck’s range climbs to more than 500 miles at an 82,000 lb. combined vehicle weight.
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More than just a range-extender
Honda envisions a world where its hydrogen fuel cell is used in much more than transportation and logistics applications. At the ACT Expo, Honda had a scale mock-up of what a hospital-sized hydrogen backup generator could look like – and hinted that such an installation might soon become a reality.
This is all very normal for Honda
Honda FCX hydrogen fuel cell concept; via Honda.
If it seems weird that Honda is pushing hydrogen so hard these days, it shouldn’t. Honda’s been developing hydrogen fuel cells for nearly forty years, and put its first hydrogen fuel cell car (the FCX concept, above) all the way back in 1999.
Since then, it’s put a number of hydrogen fuel cell-powered vehicles into series production, including the innovative Honda CR-V HFC hybrid that lets you fill the car’s 17.7 kWh battery with electrons at home for up to 29 miles of all-electric driving, then fill up the hydrogen tank for another 241 miles of driving … and they’re not stopping there.
We had a chance to chat with David Perzynski on Quick Charge last year, where he talked us through some of Honda’s hydrogen plans in more detail. You can check it out, below.
Volkswagen of America is recalling nearly 5,700 2025 VW ID. Buzz vans because the NHTSA says the third-row bench seat is too spacious. (For real.)
According to the National Highway Traffic Safety Administration (NHTSA), the third-row bench is physically wide enough for three people, but it’s only designed to hold two, so it’s only equipped with two seat belts. That mismatch violates Federal Motor Vehicle Safety Standard number 208, which covers occupant crash protection. A bench that invites three passengers but only protects two isn’t just awkward – it’s a safety risk. It simply makes it too easy to squeeze that third person in the back “just that once” without a seatbelt, and that’s inviting trouble.
Volkswagen will fix the ID. Buzz issue by having dealers install “fixed unpadded trim parts” that adjust the seat’s usable width, and they’ll do it for free, because recall repairs are always free. It’ll probably be hard plastic on the seat to ensure a third person can’t squeeze in. Owner notification letters are expected to go out starting June 20, 2025.
Volkswagen has reported that, to date, there have been “no field claims known” of safety issues caused by the extra-wide third row bench seat.
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Electric vehicle charging and battery storage specialists Zenobē have inked a deal with Canadian leasing company 7Gen to fund more than 500 commercial EVs and their associated charging infrastructure.
Last week, Zenobē agreed to provide up to $48 million (Canadian) in debt financing to 7Gen to help expand its vehicle-as-a-service electric truck leasing program across Canada.
7Gen supports fleet operators with a comprehensive set of vehicle leasing and financing solutions that cover EV charger deployment, energy management systems, and ongoing operational support for Canadian fleet customers operating electric trucks, vans, and school buses.
Zenobē secured $1.6 billion in equity from its joint majority shareholders KKR and M&G Infracapital to fuel its global expansion into EVs and grid-scale batteries back in 2023. Since then, it’s grown to support more than 2,000 EVs and 120 charging depots across markets in the UK, Europe, Australia, and New Zealand.
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“We’re bringing our innovative funding approach to Canada and specifically to 7Gen,” says Steven Meersman, Co-Founder and Director of Zenobē. “We see momentum behind decarbonization in Canada’s supportive government policies and the clean, affordable power that will ensure a lower total cost of ownership for zero-emissions vehicles. We look forward to sharing our global experience electrifying over 120 depots to benefit 7Gen, its fleet customers and the wider electric fleet market in Canada.”
That innovative funding strategy is something Steven and I had a chance to discuss this week at the ACT Expo in Anaheim, California. “We’re being very careful in the way we approach the North American market,” he said (paraphrasing). “The market is fairly littered with the graves of other UK EV companies that have tried to find a foothold here and failed, so we’re being very careful about our partners.”
Despite living just a few minutes from his Chicago HQ, I’d never met Steven before this week. He’s a super-interesting guy and you will definitely learn a thing or two about how to build a multimillion dollar energy management company like Zenobē from our upcoming podcast (stay tuned for that). But the news here is 7Gen.
“Zenobē’s debt financing supports 7Gen’s next growth step and allows us to help our customers step up the pace of their EV adoption and benefit immediately from operational cost savings,” says Frans Tjallingii, CEO, 7Gen. “Zenobē’s team is well aligned with ours and we are thrilled to partner to scale our impact in Canada together.”
The company will begin rolling out its Zenobē-funded electric trucks in the coming weeks, with new partners and projects set to be announced shortly.
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