Hubbell (HUBB) Q3 Earnings call transcript Oct 29, 2024

Hubbell Incorporated, a leading global manufacturer of electrical and electronic products, recently held an earnings call to discuss their third quarter 2024 performance. The call, led by VP of Investor Relations, Daniel Innamorato, featured Chairman, President, and CEO, Gerben Bakker, and Executive Vice President and CFO, William Sperry, who provided insights into the company's financial health and growth prospects.

Operational Performance and Outlook

Hubbell reported a 14% year-over-year adjusted earnings per share growth, accompanied by a 180 basis point expansion of adjusted operating margin. The company's strong operational performance was evident in the Utility Solutions segment, which experienced a 14% increase in adjusted operating profit. The Utility Solutions segment is capitalizing on grid modernization and electrification trends, with a focus on grid infrastructure upgrades and renewable energy interconnection. Hubbell's positioning in these markets is expected to yield sustained growth over the long term.

Trends and Challenges

The earnings call revealed several key trends and challenges facing Hubbell Incorporated. While the Utility Solutions segment is experiencing growth driven by grid modernization and electrification, the Telcom markets remain weak due to customer inventory normalization. The company is addressing these challenges by operational execution and simplifying its business to drive productivity and operating efficiencies. Hubbell is also focusing on its strategy to compete in high-growth verticals, such as data centers and renewable markets, with a solution-oriented service model for customers.

Storm Impact

Hubbell's manufacturing facilities in the Southeast were impacted by Hurricanes Helene and Milton, resulting in disruptions. However, all facilities have returned to full operation, and Hubbell's emergency response team is providing 24/7 support to customers during this time. The company's ability to respond to these crises highlights its commitment to reliability and service excellence.

M&A and Portfolio Transformation

Hubbell is actively pursuing M&A opportunities to strengthen its Electrical and Utility segments. The acquisition of Systems Control has already shown promising results, with strong growth and attractive margins. The company is also simplifying its business to improve productivity and streamline operations, which is contributing to robust margin expansion.

Looking Ahead

Hubbell is raising its full-year outlook, expressing confidence in delivering double-digit adjusted operating profit growth in 2024. The company is uniquely positioned to capitalize on grid modernization and electrification megatrends, positioning itself for attractive GDP+ growth through the cycle. Hubbell's strategic focus on grid infrastructure, renewable energy, and grid automation is expected to drive long-term growth and differentiated performance for its shareholders.

Conclusion

Hubbell Incorporated's third quarter 2024 earnings call highlighted a company that is navigating challenges while capitalizing on growth opportunities. The company's focus on grid modernization and electrification, operational execution, and portfolio transformation is positioning it for sustained growth over the long term. With a strong operational performance, strategic focus, and commitment to service excellence, Hubbell is well-positioned to deliver value for its shareholders.