Hubbell (HUBB) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales grew 6% year-over-year to $1.45 billion, with 2% organic growth and 5% from acquisitions, driven by robust demand in utility, data center, and renewables, offset by telecom weakness.

• Adjusted diluted EPS rose 7% to $4.37, adjusted operating profit up 8%, and adjusted operating margin expanded 40 basis points to 22.8%.

• Free cash flow for Q2 was $206 million, up 7% year-over-year, keeping the company on track for its ~$800 million full-year target.

• Full-year 2024 outlook raised: adjusted EPS now expected at $16.20–$16.50, with 7–8% total sales growth and double-digit free cash flow growth.

• Portfolio transformation continued with the sale of the residential lighting business and acquisitions driving segment growth.

Financial highlights

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

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

• Adjusted EPS: $4.37 (+7% y/y); net income attributable to Hubbell: $213.6 million (+3% y/y).

• Free cash flow: $206 million in Q2; on track for ~$800 million for the year.

• Net debt to total capital: 30% as of June 30, 2024; total debt to total capital: 40%.

Outlook and guidance

• FY24 adjusted EPS guidance raised to $16.20–$16.50; GAAP EPS expected at $14.30–$14.60.

• Full-year sales growth projected at 7–8%, with organic growth of about 3% and 5% from acquisitions net of divestitures.

• Adjusted operating margin guidance: 21.0–21.5% for the year.

• Free cash flow for 2024 expected to be approximately $800 million.

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