Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you elaborate on the channel inventory situation and your visibility into it? A: Gerben Bakker, CEO: The inventory situation has been frustrating, but we have better visibility with IOUs (Investor-Owned Utilities) compared to public markets. We have long-standing relationships with VIP customers, which gives us better insights. We are seeing signs of normalization, especially in the public market, which started to grow in 2024. While it's not an immediate resolution, we expect a gradual improvement into 2025.
Q: What is your exposure to tariffs, particularly from Mexico, Canada, and China? A: William Sperry, CFO: Our exposure to Chinese tariffs has decreased significantly due to divestitures and reshoring efforts. For Mexico and Canada, the situation is fluid, but we are preparing to manage any impacts through pricing and productivity measures. Mexico is our second-largest source after the US, but we haven't quantified the exact exposure.
Q: Can you discuss the Electrical segment's margins and the outlook for 2025? A: William Sperry, CFO: The Electrical segment achieved a 20% margin in Q4, partly due to exiting lower-margin lighting businesses. We expect continued strength in high-margin areas like data centers and renewables. The segment has opportunities for further margin expansion through efficiency initiatives and business simplification.
Q: What are your expectations for pricing in 2025, and how did it perform in Q4? A: Dan Innamorato, VP Investor Relations: Pricing was positive in both segments in Q4, with more than 1 point overall, slightly higher in Electrical than Utility. We expect favorable pricing to continue across the portfolio, except in telecom markets where pricing has declined.
Q: How are you managing the telecom business amid margin pressures and growth challenges? A: William Sperry, CFO: The telecom business margins were high at its peak but have since declined. We have rightsized the business throughout 2024 to align with current volumes, allowing us to grow profitably as demand returns. We aim for selective growth to maintain attractive margins.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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