01—Abstract
Summary
Summary of the 8-K filed July 30, 2024. Cited figures are marked; the original filing is the authoritative source.
Hubbell Incorporated reported results for the second quarter and six months ended June 30, 2024 in a press release furnished as Exhibit 99.1.
Second-quarter net sales were $1,452.5 milliona, up 6% from $1,365.9 million, with organic net sales growth of 2% and net acquisitions adding 5%. Diluted EPS was $3.94 (versus $3.82), and adjusted diluted EPS was $4.37 (versus $4.07). GAAP operating margin was 20.7% and adjusted operating margin was 22.8%, up 40 basis points year over year.
Operating cash flow was $239.6 millionb and free cash flow was $205.7 million in the quarter. By segment, Utility Solutions net sales rose 12% to $926.5 million, driven by acquisitions, while organic sales declined and telecom markets were weak. Electrical Solutions net sales declined 2% to $526.0 million, but organic net sales grew 7%, with GAAP operating margin rising to 20.0% from 16.5%, aided by volume growth and productivity and offset by a 9% drag from the divestiture of the residential lighting business.
Hubbell raised its full-year 2024 outlook, now guiding to diluted EPS of $14.30c-$14.60 and adjusted diluted EPS of $16.20-$16.50, total sales growth of 7-8%, organic net sales growth of approximately 3%, and free cash flow of approximately $800 million. The company also reported net debt to total capital of 30%, down from 34% at year-end 2023.
02—Key points
Key Highlights
- Second-quarter net sales of $1,452.5 million, up 6%, including organic growth of 2% and acquisitions adding 5% net of divestitures.
- Diluted EPS of $3.94 and adjusted diluted EPS of $4.37, compared with $3.82 and $4.07 a year earlier.
- Utility Solutions net sales rose 12% to $926.5 million on acquisitions, while organic sales declined and telecom markets were weak.
- Electrical Solutions organic net sales grew 7%, and GAAP operating margin expanded to 20.0% from 16.5%.
- Full-year 2024 outlook raised: adjusted diluted EPS of $16.20-$16.50 and total sales growth of 7-8%, with organic growth of approximately 3%.
- Free cash flow of $205.7 million in the second quarter; full-year free cash flow expected at approximately $800 million.
- Total debt was $2,003.2 million at June 30, 2024, with net debt to total capital of 30%, versus 34% at December 31, 2023.
03—Questions
Frequently Asked Questions
Did Hubbell raise its 2024 guidance?
Yes. The company raised its full-year 2024 outlook, now expecting diluted EPS of $14.30-$14.60 and adjusted diluted EPS of $16.20-$16.50, with total sales growth of 7-8% and organic net sales growth of approximately 3%.
What drove the growth in Utility Solutions?
Utility Solutions net sales rose 12% to $926.5 million, driven by acquisitions. Organic net sales declined about 1%, with customer inventory normalization affecting utility distribution markets and weakness in telecom markets. The filing notes strong growth in transmission/substation infrastructure and grid automation, and Utility T&D end-customer demand remains strong.
How did Electrical Solutions perform?
Segment net sales declined 2% to $526.0 million because a divestiture reduced sales by 9%, but organic net sales grew 7%. Operating margin improved to 20.0% from 16.5%, driven by volume growth, price and productivity, and portfolio transformation and mix. The filing cites strong sales growth in datacenters and renewables.
What were the one-time items affecting results?
The company recorded a $5.3 million pre-tax loss on the sale of its residential lighting business, which closed in the first quarter of 2024 for a cash price of $131 million. Adjusted EPS excludes $0.40 of acquisition-related intangible amortization and $0.03 of transaction, integration and separation costs in the second quarter.
04—Continue