01—Abstract
Summary
Summary of the 10-Q filed May 1, 2024. Cited figures are marked; the original filing is the authoritative source.
Hubbell Incorporated's Form 10-Q for the quarter ended March 31, 2024 reports first-quarter net sales of $1,399.1 milliona, up from $1,285.4 million a year earlier, with the filing stating growth of 9% that included 2% organic growth from price realization and 6% from acquisitions net of divestitures.
Profitability declined: operating income fell to $228.5 millionb from $248.8 million, operating margin contracted to 16.3% from 19.4%, and net income attributable to Hubbell Incorporated was $147.8 million versus $181.9 million, with diluted earnings per share of $2.73 compared with $3.37. The filing attributes margin contraction primarily to material and other cost inflation, lower volume, and continuing investments, partly offset by favorable price realization and operational productivity. Interest expense, net rose to $21.1 million from $9.7 million, and a $5.3 million pre-tax loss was recorded on the disposition of the residential lighting business.
Balance sheet and cash flow items show a lower debt load and a modest cash build. Long-term debt was $1,895.7 millionc at March 31, 2024, down from $2,023.2 million at December 31, 2023, after the company made $125 million of principal payments on its term loan. Cash and cash equivalents rose to $388.2 million, helped by $122.9 million of proceeds from the disposal of the residential lighting business.
Operating cash flow was $92.2 milliond compared with $113.7 million a year earlier. The company paid $65.5 million in dividends and repurchased $10.0 million of shares in the quarter, with $290.0 million remaining under its repurchase authorization. The filing states that the Utility Solutions segment's organic sales were essentially flat, while the Electrical Solutions segment grew organically by 5.5%.
The filing describes the 2023 acquisitions of EI Electronics, Balestro and Systems Control, which are reported in the Utility Solutions segment, as contributing to growth and to higher amortization and integration costs. Adjusted operating margin was 19.7% compared with 20.7% in the prior year period, and adjusted net income attributable to Hubbell Incorporated was $195.2 million, flat year over year. The company reported no material changes to its risk factors and stated that its disclosure controls were effective as of March 31, 2024.
02—Key points
Key Highlights
- Net sales rose to $1,399.1 million from $1,285.4 million, with the filing citing 2% organic growth and 6% growth from acquisitions net of divestitures.
- Operating income declined to $228.5 million from $248.8 million, and operating margin contracted to 16.3% from 19.4%, driven mainly by material and other cost inflation and lower volume.
- Diluted EPS was $2.73 versus $3.37 a year earlier; net income attributable to Hubbell Incorporated was $147.8 million versus $181.9 million.
- Adjusted net income attributable to Hubbell Incorporated was $195.2 million, flat compared with the prior year, excluding amortization of acquisition-related intangibles and other specified items.
- Long-term debt fell to $1,895.7 million from $2,023.2 million after $125 million of term loan principal payments; the 2021 Credit Facility of $750 million remained undrawn.
- Net interest expense increased to $21.1 million from $9.7 million, reflecting higher debt balances from the Systems Control acquisition and higher market interest rates.
- The residential lighting business was sold for proceeds of $122.9 million, resulting in a pre-tax loss of $5.3 million recorded in other expense.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, Hubbell kept $0.10.
- Revenue$1.40B100.0%
- Cost of revenue−$965.5M69.0%
- Gross profit$433.6M31.0%
- Operating costs−$205.1M14.7%
- Operating income$228.5M16.3%
- Interest, other & tax−$91.4M6.5%
- Net income$137.1M9.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 1, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $1.40B$1.29B | +8.8% |
| Cost of Revenue | $965.50M$837.10M | +15.3% |
| Gross Profit | $433.60M$448.30M | −3.3% |
| SG&A Expenses | $219.20M$199.50M | +9.9% |
| Operating Income | $228.50M$248.80M | −8.2% |
| Net Income | $137.10M$181.90M | −24.6% |
| EPS (Basic) | $2.55$3.39 | −24.8% |
| EPS (Diluted) | $2.53$3.37 | −24.9% |
| Shares Outstanding (Basic) | 53.70M53.60M | +0.2% |
| Shares Outstanding (Diluted) | 54.00M53.90M | +0.2% |
05—Questions
Frequently Asked Questions
How did Hubbell's first-quarter 2024 sales and profitability compare with the prior year?
Net sales increased 9% to $1,399.1 million, but operating income fell to $228.5 million from $248.8 million, and operating margin contracted to 16.3% from 19.4%. The filing attributes the margin decline mainly to material and other cost inflation, lower volume, and continuing investments, partly offset by favorable price realization and productivity.
What drove the change in the Utility Solutions and Electrical Solutions segments?
Utility Solutions net sales rose to $894.0 million from $781.6 million, largely due to acquisitions, while organic sales were flat, with weakness in Telcom and channel inventory management offsetting grid automation and metering strength. Electrical Solutions net sales were $505.1 million versus $503.8 million, with organic net sales growing 5.5% on electrification and renewables demand, offset by the residential lighting divestiture.
How did the company's debt and liquidity change during the quarter?
Long-term debt decreased to $1,895.7 million from $2,023.2 million after $125 million of term loan principal payments, and total debt to total capital was 42% at March 31, 2024. Cash and cash equivalents rose to $388.2 million, and the full $750 million revolving credit facility was available.
What did the company return to shareholders in the quarter?
Hubbell paid $65.5 million in dividends on common stock and repurchased $10.0 million of shares. Remaining authorization under its October 2022 repurchase program was $290.0 million at March 31, 2024.
What were the key acquisitions and divestitures affecting comparability?
The company acquired Systems Control for approximately $1.1 billion in the fourth quarter of 2023, along with EI Electronics and Balestro, all reported in Utility Solutions. It sold its residential lighting business for a cash purchase price of $131 million, closing in the first quarter of 2024 with a $5.3 million pre-tax loss.
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