Revenue: Hubbell posted $1.4 billion in sales for the first quarter of 2024, marking a high single-digit growth with organic growth contributing about 2% and acquisitions about 6%.
Operating Profit: Operating profit was reported at $275 million, translating to a 3% increase year-over-year, with an operating margin of 19.7%, indicating a 1 point decrease.
Earnings Per Share (EPS): EPS remained flat at $3.60 compared to the previous year.
Free Cash Flow: Hubbell reported a free cash flow of $52 million for the quarter.
Capital Expenditures: Capital expenditures increased by 20% to $40 million in the quarter.
Future Guidance
Full Year Outlook: Hubbell reaffirmed its full year 2024 outlook for double-digit adjusted operating profit growth.
Restructuring Investments: Expectations for full-year restructuring investments have been increased from $0.25 to $0.35 per share.
Long-term Strategy: Hubbell plans to share more details on its long-term strategy and outlook on the upcoming Investor Day on June 4.
Trends, Market Conditions, Sentiment
Market Strength: Notable strength in Electrical Solutions was emphasized, driven by organic growth and margin expansion, particularly from renewables and data centers experiencing double-digit growth.
Utility T&D Markets: Core utility transmission and distribution (T&D) markets reported solid performance, while utility distribution markets face challenges due to channel inventory normalization.
Acquisition Contributions: Positive contributions from recent acquisitions in the utility segment, including Systems Control, Balestro, and EIG, delivering strong quarterly results.
Telecom Weakness: Telecom markets reported significant sales and margin declines, with an anticipated persistence of this weakness into the second quarter.
Investment Levels: Hubbell accelerated investment levels in innovation, engineering, capacity, and lean, which are expected to deliver higher long-term growth and productivity levels.
Utility Investment Mode: Key takeaways from Hubbell’s Utility Connect Customer Conference indicate that utilities are in investment mode, expecting a multiyear T&D investment cycle due to aging infrastructure, renewables, electrification, and load growth.
Operational Execution: Hubbell highlighted positive price/cost productivity in both segments for the quarter amidst an inflationary operating environment.
Notable Quotes
Gerben Bakker on Market Positioning: “Our leadership in attractive utility T&D markets positions us well to meet the grid modernization and electrification needs of our customers.”
Bill Sperry on Financial Performance: “Overall, the enterprise performed solidly, a little bit better than we anticipated. And we appreciate you taking time to discuss Hubbell’s performance.”
Gerben Bakker on Future Outlook: “Hubbell is well on track to achieve our full year 2024 outlook for double-digit adjusted operating profit growth, which we are reaffirming today.”
William Sperry on Balance Sheet Strength: “After investing $1.25 billion, we’re still a very, very solid balance sheet, very easily absorbed and very well positioned to continue to invest in acquisitions and CapEx.”
Gerben Bakker on Customer Engagement: “This was the first time Hubbell held a customer event of this magnitude…and I’d like to thank Greg Gums and his leadership team for creating a unique forum for us to engage with our customers.”
