Power management company Eaton reported strong earnings in its fourth quarter, with its data center unit helping revenue top analyst estimates.

The company made $5.4 billion in sales for the quarter across all segments, up 12 percent year-over-year. 2022 as a whole brought record profits, margins, and adjusted earnings per share.

Data center, utility and industrial markets were highlighted as being particularly strong, but specific data center numbers were not disclosed.

– Sebastian Moss

But with the new year come new concerns - the global economy remains uncertain, with companies tightening budgets amid recession fears.

Hyperscale cloud companies, which have led spending in the data center market, are warning of slowing revenues. At the same time, their parent companies have laid off tens of thousands of employees.

Responding to questions about the possible cyclical nature of the data center market and slowdown concerns, Eaton's CEO and chairman Craig Arnold said in an earnings call that the company's own data showed that the market remained healthy.

"We anticipated this question because we too are reading some of the conflicting headlines in terms of what's going on in the data center market," he said.

Arnold admitted that "there's a little bit of a cause for some concern given what some of the hyperscale guys did with respect to their own outlook. But I can tell you that, for us, the data center market continues to be very strong. And even the hyperscale guys are still talking about mid-teens kind of growth over the next three to four years. And so those are very strong numbers."

He pointed to artificial intelligence, autonomous driving, and 5G as reasons for people to need more data centers.

"We think the data center market is going to be a great market for quite a number of years to come, and it's supported by our order intake and our negotiations," he said. "We have lots of visibility into the data center market, and it feels good."

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