Hubbell Q2 2024 Earnings Report
Key Takeaways
Hubbell Incorporated reported solid performance in the second quarter of 2024, with strong operational execution and a return to adjusted operating margin expansion. The company's vertical market strategy drove strong sales growth in datacenters and renewables, while unification and simplification efforts contributed to significant operating margin expansion in the HES segment. The company is raising its full year 2024 outlook.
Diluted EPS was $3.94; adjusted diluted EPS was $4.37.
Net sales increased by 6%, with organic growth of 2% and net M&A contributing 5%.
Operating margin was 20.7%; adjusted operating margin was 22.8%, a 40bps year-over-year increase.
The FY24 outlook was raised, with diluted EPS projected at $14.30-$14.60 and adjusted diluted EPS at $16.20-$16.50.
Hubbell
Hubbell
Forward Guidance
For the full year 2024, Hubbell anticipates diluted earnings per share in the range of $14.30-$14.60 and anticipates adjusted diluted earnings per share in the range of $16.20-$16.50. The Company continues to expect full year 2024 free cash flow of approximately $800 million.
Positive Outlook
- Full year 2024 total sales growth of 7-8%.
- Organic net sales growth of approximately 3%.
- Acquisitions net of the residential lighting business divestiture contributing approximately 5% to full year sales growth.
- Adjusted tax rate of approximately 22.5%.
- Full year 2024 free cash flow of approximately $800 million.
Challenges Ahead
- Diluted EPS and Adjusted EPS ranges are based on an adjusted tax rate of approximately 22.5% and include approximately $0.35 of anticipated restructuring and related investment.
- Ongoing softness in the telecommunication markets.
- Ongoing softness in the residential market of Electrical Solutions.
- Potential for a significant economic slowdown.
- Continued inflation, stagflation or recession, higher interest rates, and higher energy costs.