Hubbell (HUBB) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales grew 6% to $1.45 billion, with 2% organic growth and 5% from acquisitions, offset by divestitures; adjusted operating profit rose 8% and adjusted EPS increased 7% to $4.37.

• Adjusted operating margin expanded 40 basis points to 22.8%, and free cash flow reached $206 million, up 7% year-over-year.

• Raised full-year 2024 outlook, now expecting 7–8% sales growth, adjusted EPS of $16.20–$16.50, and double-digit free cash flow growth.

• Strong organic growth and margin expansion in Electrical Solutions, led by data center and renewables; Utility Solutions saw robust transmission/substation growth but continued telecom weakness.

• Portfolio transformation continued with acquisitions and the sale of the residential lighting business, supporting higher growth and margins.

Financial highlights

• Q2 net sales: $1.45B (+6% y/y); organic sales +2%, acquisitions +5%, divestitures -3%.

• Adjusted operating margin: 22.8% (+40bps y/y); adjusted operating profit: $331M (+8% y/y).

• Adjusted EPS: $4.37 (+7% y/y); free cash flow: $206M (+7% y/y), on track for ~$800M full-year target.

• Net income attributable to Hubbell: $213.6M (+3% y/y); adjusted net income: $236.5M (+7% y/y).

• Adjusted EBITDA for Q2: $350.8M (+8% y/y); adjusted EBITDA margin ~24%.

Outlook and guidance

• Full-year 2024 adjusted EPS guidance raised to $16.20–$16.50; sales growth expected at 7–8% (3% organic, 5% M&A).

• Adjusted operating margin guidance: 21.0–21.5% (up to +50bps y/y); free cash flow guidance: ~$800M.

• Utility Solutions: strong transmission/substation, margin expansion expected in 2H; Electrical Solutions: continued strength in high-growth verticals.

• Ongoing restructuring and productivity initiatives to optimize cost structure through 2024.

• Longer-term: mid-single-digit organic growth, attractive incremental margins, and strong free cash flow.