Hubbell (HUBB) Q4 2024 earnings summary

Executive summary

• 2024 results exceeded expectations with 5% net sales growth, 9% adjusted operating profit growth, 90bps margin expansion, 8% adjusted EPS growth, and 13% free cash flow growth year-over-year.

• Achieved double-digit growth in adjusted operating profit, EPS, and free cash flow in Q4 2024, despite flat sales and organic volume below expectations.

• Strong progress on business simplification, operational efficiencies, and strategic capital deployment, including Systems Control acquisition and Residential Lighting divestiture.

• Secular growth captured in transmission, substation, grid protection, renewables, and datacenter verticals.

• Portfolio transformation and business simplification initiatives supported margin expansion.

Financial highlights

• Q4 2024 net sales were $1.346B, down 1% year-over-year; organic sales -3%, net M&A +3%.

• Q4 adjusted operating profit up 11% to $291M; adjusted EPS up 11% to $4.10; full-year adjusted EPS $16.57, up 8%.

• Free cash flow for Q4 up 28% to $364M; FY24 FCF $811M, with >90% conversion on adjusted net income.

• Adjusted operating margin expanded by 240bps in Q4 and 90bps for the full year.

• Net debt to total capital improved to 24% at year-end 2024 from 34% in 2023.

Outlook and guidance

• 2025 outlook anticipates 4–5% organic growth, continued margin expansion, and strong growth in operating profit, EPS, and free cash flow.

• 2025 adjusted EPS guidance: $17.35–$17.85; free cash flow conversion of at least 90%.

• Utility Solutions segment expected to grow 4–6% organically, with strength in transmission, substation, and grid protection; telecom and utility distribution to return to growth.

• Electrical Solutions segment expected to grow 3–5% organically, with mid-teens growth in data centers and solid growth in renewables and T&D markets.

• First quarter 2025 expected to contribute low 20s percent of annual EPS, with growth accelerating in subsequent quarters.