Hubbell Incorporated (NYSE: HUBA, HUBB) reported operating results for the first quarter ended March 31, 2014. The firm’s net sales in the first quarter of 2014 were $759.5 million, an increase of 3 percent compared to the $740.1 million reported in the first quarter of 2013. Hubbell’s operating income was $104.8 million, or 13.8 percent of net sales, compared to $97.7 million, or 13.2 percent of net sales, for the comparable period of 2013.
Hubbell reported net income in the first quarter of 2014 of $64.2 million, a decrease of 3 percent compared to the $65.9 million reported in the first quarter of 2013. Earnings per diluted share were $1.08, a decrease of 2 percent compared to the $1.10 reported in the first quarter of 2013. Free cash flow (defined as cash flow from operations less capital expenditures) was $30.7 million in the first quarter of 2014 versus $29.7 million reported in the comparable period of 2013.
Hubbell’s electrical segment net sales in the first quarter of 2014 increased 5 percent to $538.8 million compared to $515.3 million reported in the first quarter of 2013. Acquisitions added 4 percent to sales in the quarter while organic volume was essentially flat as severe weather conditions in January and February negatively impacted demand.
The manufacturer’s power segment net sales in the first quarter of 2014 were $220.7 million compared to $224.8 million reported in the first quarter of 2013. The sales decline was primarily due to weaker demand for construction related products that were impacted by unfavorable weather conditions while spending for distribution and transmission was relatively flat.
“The first quarter results were generally in line with our expectations given the adverse weather conditions that hampered much of the U.S. during January and February,” said David G. Nord, president and CEO, in a press release. “However, we were encouraged by the incoming order rates for March, which did improve significantly but were not enough to offset the weakness experienced in the first two months.”
Despite these headwinds, Nord said the organization remained focused on the things that it can control including executing productivity programs and careful cost management. These efforts resulted in Hubbell expanding its operating margins by 60 basis points compared to last year despite flat organic sales.
“Looking to our full year outlook for 2014, we expect overall sales to increase in the 5 to 6 percent range with completed acquisitions contributing between 3 and 4 percent of the growth,” Nord said. “Despite the lower than anticipated demand to start the year, the relative strength of our March orders gives us cautious optimism about the remainder of the year.”
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