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Hubbell 8-K Report, Financial Results (Jan 30, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed January 30, 2024
Period End
January 30, 2024
Security
HUBB
In the record · 2016–202610-K1110-Q338-K110

HUBB filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 110 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Feb ’18Feb ’18
  2. Leadership change8-K · Mar ’20Mar ’20
  3. Leadership change8-K · Feb ’22Feb ’22
  4. Material agreement8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed January 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Hubbell Incorporated (NYSE: HUBB) reported fourth quarter and full year 2023 results in a January 30, 2024 press release furnished as Exhibit 99.1.

For Q4 2023, net sales from continuing operations were $1,345.8 milliona versus $1,219.6 million a year earlier, with diluted EPS from continuing operations of $3.16 (adjusted diluted EPS of $3.69). For full year 2023, net sales were $5,372.9 million, diluted EPS from continuing operations was $14.05 (adjusted $15.33), and operating income was $1,038.5 million versus $709.1 million in 2022. Full year free cash flow was $715.1 million.

The company made a major acquisition in the fourth quarter: Northern Star Holdings, Inc. (commercially known as Systems Control), a manufacturer of substation control and relay panels, for approximately $1.1 billionb, funded with cash and a $600 million term loan. Hubbell also agreed to sell its residential lighting business for a cash purchase price of $131 million, with closing expected in the first quarter of 2024. Total debt rose to $2,140.6 million at year-end 2023 from $1,442.6 million, and net debt to total capital was 34% versus 24% a year earlier.

For 2024, Hubbell guided to total sales growth of 8-10% and organic sales growth of 3-5%, GAAP diluted EPS from continuing operations of $14.40c-$14.90, and adjusted diluted EPS of $16.00-$16.50. The company expects full year 2024 free cash flow of approximately $800 million. Management cited strong price realization and positive volumes in the quarter, with telecom and utility distribution markets weaker and channel inventory levels largely stabilized in electrical products.

02—Key points

Key Highlights

  1. Q4 2023 net sales from continuing operations rose 10% to $1,345.8 million; organic net sales grew 8% per the headline.
  2. Full year 2023 GAAP diluted EPS from continuing operations was $14.05 versus $9.43 in 2022; adjusted diluted EPS was $15.33 versus $10.62.
  3. Full year 2023 operating income was $1,038.5 million, a 19.3% operating margin, compared with $709.1 million and 14.3% in 2022.
  4. Acquired Northern Star Holdings (Systems Control) for approximately $1.1 billion in Q4 2023, funded by cash and a $600 million term loan.
  5. Agreed to sell the residential lighting business for $131 million cash, expected to close in Q1 2024 subject to regulatory approvals.
  6. 2024 guidance: total sales growth of 8-10%, organic growth of 3-5%, GAAP diluted EPS of $14.40-$14.90, and free cash flow of approximately $800 million.
  7. Total debt rose to $2,140.6 million and net debt to total capital reached 34%, up from 24% a year earlier, reflecting acquisition financing.

03—Questions

Frequently Asked Questions

  1. How did Hubbell perform in the fourth quarter of 2023?

    Net sales from continuing operations were $1,345.8 million, up from $1,219.6 million, and GAAP diluted EPS from continuing operations was $3.16 versus $2.27. Adjusted diluted EPS was $3.69 versus $2.60. Operating income was $225.6 million, a 16.8% margin, compared with 14.1% a year earlier.

  2. What acquisitions and divestitures did Hubbell announce?

    Hubbell acquired Northern Star Holdings, Inc. (Systems Control), a maker of substation control and relay panels, for about $1.1 billion. It also agreed to sell its residential lighting business for $131 million cash, with closing expected in the first quarter of 2024.

  3. What is Hubbell's 2024 outlook?

    Hubbell expects total sales growth of 8-10% and organic sales growth of 3-5%, with closed acquisitions net of the residential lighting divestiture contributing about 5% to total sales growth. GAAP diluted EPS from continuing operations is expected at $14.40-$14.90, adjusted EPS at $16.00-$16.50, and free cash flow at approximately $800 million.

  4. How did Hubbell's balance sheet and cash flow change in 2023?

    Full year 2023 net cash from operating activities from continuing operations was $880.8 million and free cash flow was $715.1 million. Total debt increased to $2,140.6 million from $1,442.6 million, and cash and cash equivalents ended the year at $336.1 million.

  5. What end markets drove results and what were the challenges?

    Management cited strong price realization and positive year-over-year volumes. Transmission markets were robust and communication and controls grew strongly in Utility Solutions, while utility distribution was affected by channel inventory normalization and telecom markets were weak. Electrical Solutions growth was driven by price and volume, and industrial, renewables and datacenter markets were solid.

04—Continue

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