Why did Hubbell change its inventory accounting method, and what is the effect?

The company switched certain U.S. inventories from LIFO to FIFO, which it says provides better matching of costs and revenues, conforms to a single inventory method and improves comparability with peers. The change lowered cost of goods sold by $29 million in the second quarter and $20 million for the first half, contributing $0.42 and $0.29 per diluted share, respectively.

How did Hubbell's 2025 earnings outlook change?

Hubbell raised its 2025 diluted EPS outlook to $16.25-$16.75 and its adjusted diluted EPS outlook to $17.65-$18.15. The company expects full-year total and organic net sales growth of 4-6% and anticipates approximately $20 million of restructuring and related investment.

How strong was Hubbell's cash generation in the quarter?

Net cash provided by operating activities was $261 million in the second quarter of 2025, versus $240 million a year earlier. Free cash flow was $221 million, compared with $206 million in the prior-year period.

What does the company say about non-GAAP adjusted measures?

Adjusted EPS excludes amortization of acquisition-related intangible assets, which the company expects to be about $1.40 per share for 2025, along with transaction, integration and separation costs. Management says these measures help investors assess underlying performance in light of its acquisition and divestiture strategy.

HUBB 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed July 29, 2025. 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, 2025, in a press release furnished as Exhibit 99.1.

Net sales were $1,484.3 million^a for the quarter, compared with $1,452.5 million a year earlier, and GAAP diluted EPS was $4.56 versus $4.01. Adjusted diluted EPS was $4.93 versus $4.44 in the prior-year quarter. Operating margin was 22.7% and adjusted operating margin was 24.4%.

The company changed its accounting for certain U.S. inventories from LIFO to FIFO during the quarter, which it says better matches costs and revenues and improves comparability with peers. The change decreased cost of goods sold by $29 million^b in the second quarter ($0.42 per diluted share) and by $20 million for the first half ($0.29 per diluted share). Segment information for prior periods has been recast to reflect the new method, and the company states this is not a restatement.

Hubbell raised its 2025 outlook: diluted EPS of $16.25^c-$16.75 and adjusted diluted EPS of $17.65-$18.15. It anticipates full-year total and organic net sales growth of 4-6%, an adjusted tax rate of 22.0%-22.5%, and free cash flow conversion of approximately 90% on adjusted net income.

Utility Solutions net sales rose 1% to $936 million^d, with Grid Infrastructure up approximately 7% and Grid Automation down approximately 13%. Electrical Solutions net sales rose 4% to $549 million on organic growth of 4%, led by datacenter markets.

02—Key points

Key Highlights

Second-quarter net sales of $1,484.3 million, up from $1,452.5 million; GAAP diluted EPS of $4.56 versus $4.01 and adjusted diluted EPS of $4.93 versus $4.44.
Operating margin of 22.7% (adjusted 24.4%), compared with 21.1% (adjusted 23.2%) a year earlier.
Inventory accounting changed from LIFO to FIFO for certain U.S. inventories, reducing second-quarter COGS by $29 million ($0.42 per diluted share) and first-half COGS by $20 million ($0.29 per diluted share).
2025 diluted EPS outlook raised to $16.25-$16.75; adjusted diluted EPS outlook raised to $17.65-$18.15.
Full-year 2025 total and organic net sales growth expected at 4-6%, with free cash flow conversion of approximately 90% on adjusted net income.
Grid Infrastructure grew approximately 7% organically, while Grid Automation sales fell approximately 13% on weak meters and AMI project activity.
Second-quarter operating cash flow of $261 million and free cash flow of $221 million, versus $240 million and $206 million in the prior-year quarter.

03—Questions

Frequently Asked Questions

Why did Hubbell change its inventory accounting method, and what is the effect?
The company switched certain U.S. inventories from LIFO to FIFO, which it says provides better matching of costs and revenues, conforms to a single inventory method and improves comparability with peers. The change lowered cost of goods sold by $29 million in the second quarter and $20 million for the first half, contributing $0.42 and $0.29 per diluted share, respectively.
How did Hubbell's 2025 earnings outlook change?
Hubbell raised its 2025 diluted EPS outlook to $16.25-$16.75 and its adjusted diluted EPS outlook to $17.65-$18.15. The company expects full-year total and organic net sales growth of 4-6% and anticipates approximately $20 million of restructuring and related investment.
Which segments drove performance in the second quarter?
Utility Solutions net sales rose 1% to $936 million, with Grid Infrastructure up approximately 7% and Grid Automation down approximately 13%. Electrical Solutions net sales rose 4% to $549 million, with 4% organic growth driven by datacenter markets.
How strong was Hubbell's cash generation in the quarter?
Net cash provided by operating activities was $261 million in the second quarter of 2025, versus $240 million a year earlier. Free cash flow was $221 million, compared with $206 million in the prior-year period.
What does the company say about non-GAAP adjusted measures?
Adjusted EPS excludes amortization of acquisition-related intangible assets, which the company expects to be about $1.40 per share for 2025, along with transaction, integration and separation costs. Management says these measures help investors assess underlying performance in light of its acquisition and divestiture strategy.

04—Continue

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