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Eaton (ETN) just posted record quarterly sales, up 28% from a year earlier. Yet investors have reason to worry about how much it keeps from each sale. Eaton’s gross margin, the share of sales left after production costs, has slipped over the past year. Fast growth offers less value to a shareholder when each dollar earns less. So why is Eaton keeping less of each sales dollar just as demand for its products grows?

Eaton Points To Commodity Costs And Factory Expansions

During its November 3, 2026 call, management said most of the year-over-year margin decline in its Electrical Americas segment came from higher commodity costs. The company…