SHELTON, Conn. – Hubbell Incorporated today reported operating results for the third quarter ended September 30, 2024.
“Hubbell delivered strong operating performance in the third quarter, generating solid operating margin expansion and double digit growth in operating income,” said Gerben Bakker, Chairman, President and CEO.
Bakker continued, “In our Utility Solutions segment, transmission, substation and grid protection and controls markets were strong as utility customers invest to accommodate load growth and interconnect new sources of renewable generation. As anticipated, telcom markets remained weak in the quarter and utility distribution markets continued to reflect the impact of customer inventory normalization. Utility Solutions returned to year-over-year operating margin expansion in the quarter. Our Electrical Solutions segment delivered another quarter of strong operating performance, with solid organic growth and continued margin expansion. Performance in the quarter was led by strength in datacenter and renewables verticals, as well as productivity, operating efficiencies and portfolio transformation efforts.”
Bakker concluded, “As grid modernization and electrification megatrends accelerate, Hubbell remains uniquely positioned to continue achieving differentiated long term performance for our customers and shareholders.”
THIRD QUARTER FINANCIAL HIGHLIGHTS
The comments and year-over-year comparisons in this segment review are based on third quarter results in 2024 and 2023.
Utility Solutions segment net sales in the third quarter of 2024 increased 11% to $933 million compared to $838 million reported in the third quarter of 2023. Organic net sales decreased approximately 4% in the quarter while acquisitions added 15%. Grid Infrastructure net sales increased approximately 15% and Grid Automation net sales increased approximately 4%. Segment operating income was $211 million, or 22.6% of net sales, in the third quarter of 2024 as compared to $187 million, or 22.3% of net sales in the same period of 2023. Adjusted operating income was $236 million, or 25.3% of net sales, in the third quarter of 2024 as compared to $201 million, or 24.0% of net sales in the prior year period. Changes in operating income and operating margin were primarily due to the impact of acquisitions, price/cost/productivity management and prior year investments, partially offset by volume declines in enclosures products primarily driven by telcom markets.
Electrical Solutions segment net sales in the third quarter of 2024 decreased to $510 million compared to $538 million reported in the third quarter of 2023. Organic net sales increased 3% in the quarter, while a divestiture reduced segment net sales by 8%. Segment operating income was $93 million, or 18.3% of net sales, compared to $90 million, or 16.6% of net sales in the same period of 2023. Adjusted operating income was $99 million, or 19.4% of net sales, in the third quarter of 2024 as compared to $94 million, or 17.5% of net sales in the same period of the prior year. Changes in operating income and operating margin were driven primarily by volume growth, price/cost/productivity management and the impact of portfolio transformation and mix.
Adjusted diluted EPS in the third quarter 2024 excludes $0.40 of amortization of acquisition-related intangible assets and $0.04 of transaction, integration, and separation costs. Adjusted diluted EPS in the third quarter 2023 excluded $0.25 of amortization of acquisition-related intangible assets.
Net cash provided by operating activities was $227 million in the third quarter of 2024 versus net cash provided by operating activities of $194 million in the 2023 period. Free cash flow was $189 million in the third quarter of 2024 versus $159 million in the comparable period of 2023.
SUMMARY & OUTLOOK
For the full year 2024, Hubbell anticipates diluted earnings per share in the range of $14.20-$14.40 and anticipates adjusted diluted earnings per share (“Adjusted EPS”) in the range of $16.35-$16.55. Adjusted EPS excludes amortization of acquisition-related intangible assets, which the Company expects to be approximately $1.75 for the full year, a $0.22 loss on disposition of the residential lighting business, and $0.17 of transaction, integration, and separation costs. The Company believes Adjusted EPS is a useful measure of underlying performance in light of our acquisition and divestiture strategy.
Hubbell anticipates full year 2024 total sales growth of approximately 6% and organic net sales growth of approximately 1%, as compared to full year 2023. The Company anticipates acquisitions net of the residential lighting business divestiture contributing approximately 5% to full year sales growth.
The diluted EPS and Adjusted EPS ranges are based on an adjusted tax rate of 22.0% to 22.5% and include approximately $0.35 of anticipated restructuring and related investment. The Company continues to expect full year 2024 free cash flow of approximately $800 million.
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