In This Article:
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Sales: $1.365 billion, impacted by the divestiture of residential lighting.
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Operating Profit: $264 million, with margins down 40 basis points.
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Utility Solutions Sales: $857 million, down 4% from prior year.
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Electrical Solutions Growth: Mid-single-digit organic growth, with strong data center contributions.
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Adjusted EPS Outlook: Maintained for 2025, with organic growth expected at 6% to 8%.
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Free Cash Flow: Targeting 90% or greater of net income.
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Tariff and Inflation Impact: $135 million cost impact expected to be neutralized within 2025.
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Grid Infrastructure Orders: Up double digits year-over-year in the first quarter.
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Share Repurchase: $125 million worth of shares repurchased in Q1.
Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Hubbell Inc (NYSE:HUBB) reported strong operating performance in the Electrical Solutions segment with mid-single-digit organic growth and margin expansion.
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The company experienced a return to organic growth in the grid infrastructure business, driven by strong transmission and substation markets.
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Hubbell Inc (NYSE:HUBB) is effectively managing cost inflation and tariffs through proactive pricing and productivity measures.
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The company maintains a positive long-term outlook, supported by strong order trends and favorable end markets.
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Hubbell Inc (NYSE:HUBB) has a robust balance sheet, allowing for potential acquisitions and shareholder returns, with a focus on strategic capital deployment.
Negative Points
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Grid automation sales were down due to challenging prior year comparisons, impacting overall performance.
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The company faced headwinds from increased raw material prices and tariffs, creating a $10 million drag on margins.
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There is uncertainty regarding the full offset of reciprocal tariffs within the 2025 calendar year due to LIFO accounting lag.
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Utility Solutions segment experienced a decline in sales, with grid automation contracting by 15%.
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The macroeconomic environment remains dynamic, requiring cautious and proactive cost management.
Q & A Highlights
Q: Can you clarify the guidance sensitivity related to tariffs and its impact on the earnings range? A: Yes, the guidance range of $16.85 to $17.35 includes a $0.50 sensitivity related to tariffs. This is a sensitivity analysis rather than a definitive guide, as we are taking actions to neutralize the impact. (Daniel Innamorato, Vice President of Investor Relations)
Q: How should we think about the second quarter in terms of sales growth and margin impact from LIFO accounting? A: We expect mid-single-digit year-over-year sales growth in Q2, with a $20 million LIFO-related cost impact. This will be offset in the second half of the year. (William Sperry, Senior Vice President and Chief Financial Officer)