• Adjusted Earnings Per Share Growth: 14% year-over-year increase.
• Operating Profit Growth: 14% year-over-year increase.
• Adjusted Operating Margin Expansion: 180 basis points increase.
• Sales Growth: 5% overall increase.
• Free Cash Flow Growth: 19% increase.
• Utility Segment Sales Growth: 11% increase, with 15% from acquisitions and -4% organic.
• Utility Segment Operating Margin: 130 basis points expansion to over 25%.
• Electrical Segment Organic Growth: 3% increase.
• Electrical Segment Operating Margin Expansion: 190 basis points increase.
• Full-Year EPS Guidance: Raised to $16.35 to $16.55.

• Warning! GuruFocus has detected 5 Warning Sign with FOR.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Hubbell Inc (NYSE:HUBB) reported a 14% year-over-year growth in adjusted earnings per share and operating profit.
• The company achieved a 180 basis point expansion in adjusted operating margin.
• Utility Solutions segment showed strong growth driven by grid modernization and electrification trends.
• Electrabel solutions delivered solid organic growth and 190 basis points of adjusted operating margin expansion.
• Hubbell Inc (NYSE:HUBB) raised its full-year outlook, confident in delivering double-digit adjusted operating profit growth for 2024.

Negative Points

• Telecom markets remained weak, impacting overall performance.
• Utility distribution markets were affected by customer inventory normalization.
• Hubbell Inc (NYSE:HUBB) faced disruptions in three manufacturing facilities due to recent storm activity.
• Organic sales were slightly down, with net M&A contributing to growth.
• Interest expenses increased due to acquisitions, offsetting some financial gains.

Q & A Highlights

Q: Can you confirm the revenue contribution from Systems Control and provide insights on grid infrastructure's organic performance? A: Systems Control contributed approximately $120 million in revenue for the quarter. The grid infrastructure segment experienced around a 6% organic decline, but this was offset by strong performance in other areas.

Q: How is the storm impact affecting channel inventory, and what is the status of inventory normalization? A: The recent storms have helped flush out inventory, particularly in specific regions and with certain customers. This process is aiding in inventory normalization, although it varies by location and customer.

Q: What is the outlook for pricing in the utility segment for next year, and how are customer negotiations progressing? A: Pricing traction has been positive, especially outside of the telecom sector. We expect pricing to remain a lever, albeit at more modest levels, as we continue to focus on our value proposition, including service and quality.

Q: Can you provide insights into the organic growth expectations for the utility segment next year, considering current destocking trends? A: We anticipate organic growth in the utility segment starting at the beginning of next year, as inventory levels normalize and end-market demand remains strong. Transmission is expected to continue its double-digit growth.

Q: How is the telecom segment expected to perform next year, and what are the implications for margins? A: The telecom segment is down about 30% this year, but we are being selective in pursuing volume to maintain profitability. We expect steady growth from here, with margins returning to attractive levels as volumes stabilize.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.