Hubbell Reports Fourth Quarter 2024 and Full Year Results

Shelton, CT, Feb. 04, 2025 (GLOBE NEWSWIRE) —

HUBBELL REPORTS FOURTH QUARTER 2024 AND 
FULL YEAR RESULTS

• Q4 diluted EPS of $3.64; adjusted diluted EPS of $4.10 (up 11% y/y)
• Q4 net sales -1% (organic -3%; net M&A +3%)
• Q4 operating margin 19.3%; adjusted operating margin 21.8% (up 240bps y/y)
• FY 2024 diluted EPS of $14.37; adjusted diluted EPS of $16.57
• FY 2025 diluted EPS expected range of $16.00-$16.50; adj. diluted EPS of $17.35-$17.85

SHELTON, CT. (February 4, 2025) – Hubbell Incorporated (NYSE: HUBB) today reported operating results for the fourth quarter and full year ended December 31, 2024.

“Hubbell delivered double-digit growth in operating profit, earnings per share and free cash flow in the fourth quarter” said Gerben Bakker, Chairman, President and CEO. “While organic growth was below our expectations in the quarter, continued operational execution resulted in significant margin expansion and we delivered earnings per share ahead of our prior outlook range.”

Mr. Bakker continued, “On a full year basis, Hubbell delivered strong financial results and demonstrated our ability to compound off a multi-year base of significant outperformance. We made strong progress in unifying our HES segment to compete collectively, achieved attractive growth across key utility and electrical verticals, proactively managed price/cost/productivity and drove significant shareholder value creation through portfolio transformation and strategic capital allocation.”

Mr. Bakker concluded, “We are confident in our ability to deliver on our initial 2025 outlook which anticipates continued attractive growth in net sales, operating margin, operating profit and free cash flow. Our outlook is consistent with our long-term financial framework which we believe will deliver differentiated performance for shareholders in 2025 and beyond.”

Certain terms used in this release, including “Net debt”, “Free Cash Flow”, “Organic net sales”, “Organic net sales growth”, “Restructuring-related costs”, “adjusted EBITDA”, and certain other “adjusted” measures, are defined under the section entitled “Non-GAAP Definitions.” See page 8 for more information.

FINANCIAL HIGHLIGHTS

The comments and year-over-year comparisons in this segment review are based on fourth quarter results in 2024 and 2023.

Utility Solutions segment net sales in the fourth quarter of 2024 increased 4% to $847 million compared to $811 million reported in the fourth quarter of 2023. Organic net sales decreased 5% compared to the fourth quarter of 2023, while acquisitions added 9%. Grid Infrastructure net sales increased approximately 12% and Grid Automation net sales decreased by approximately 11%. Segment operating income in the fourth quarter of 2024 was $166 million, or 19.6% of net sales, compared to $143 million, or 17.6% of net sales in the same period of 2023. Adjusted operating income was $194 million, or 22.9% of net sales, in the fourth quarter of 2024 as compared to $174 million, or 21.4% of net sales in the same period of the prior year. Changes in operating income and operating margin were primarily due to the impact of acquisitions, price/cost/productivity management, prior year investments and favorable business mix, partially offset by volume declines.

Electrical Solutions segment net sales in the fourth quarter of 2024 decreased to $487 million compared to $534 million in the fourth quarter of 2023. Organic net sales decreased 1% in the quarter, while a divestiture reduced segment net sales by 8%. Segment operating income in the fourth quarter of 2024 was $92 million, or 19.0% of net sales, compared to $83 million, or 15.5% of net sales in the same period of 2023. Adjusted operating income was $97 million, or 20.0% of net sales, in the fourth quarter of 2024 as compared to $88 million, or 16.5% of net sales in the same period of the prior year. Changes in operating income and operating margin were driven primarily by portfolio transformation and favorable business mix, price/cost/productivity management and business simplification initiatives.

Adjusted diluted EPS in the fourth quarter 2024 excludes $0.44 of amortization of acquisition-related intangible assets and $0.02 of transaction, integration, and separation costs. Adjusted diluted EPS in the fourth quarter 2023 results exclude $0.32 of amortization of acquisition-related intangible assets and $0.21 of transaction, integration, and separation costs.

Net cash provided by operating activities was $432 million in the fourth quarter of 2024 versus $346 million in the comparable period of 2023. Free cash flow was $364 million in the fourth quarter of 2024 versus $284 million reported in the comparable period of 2023.

SUMMARY & OUTLOOK

For the full year 2025, Hubbell anticipates total sales growth and organic sales growth of 4-5%. Hubbell expects 2025 GAAP diluted earnings per share from continuing operations in the range of $16.00 to $16.50 and adjusted diluted earnings per share from continuing operations (“Adjusted EPS”) in the range of $17.35 to $17.85. Adjusted EPS excludes amortization of acquisition-related intangible assets, which the Company expects to be approximately $1.35 per share for the full year. The Company believes Adjusted EPS is a useful measure of underlying financial performance in light of our acquisition strategy.

The diluted earnings per share and Adjusted EPS ranges are based on an adjusted tax rate of 22.0 to 22.5% and include approximately $20 million of anticipated restructuring and related investment. The Company expects full year 2025 free cash flow conversion of 90% or greater on adjusted net income.

CONFERENCE CALL

Hubbell will conduct an earnings conference call to discuss its fourth quarter 2024 and full year financial results today, February 4, 2025 at 10:00 a.m. ET. A live audio of the conference call will be available and can be accessed by visiting Hubbell’s “Investor Relations – Events/Presentations” section of www.hubbell.com. Audio replays will also be available at the conclusion of the call by visiting www.hubbell.com and selecting “Investors” from the options at the bottom of the page and then “Events/Presentations” from the drop-down menu.

FORWARD-LOOKING STATEMENTS

Certain statements contained herein may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements generally relate to our expectations and beliefs regarding our financial results, condition and outlook, projections of future performance, anticipated growth and end markets, changes in operating results, market conditions and economic conditions, expected capital resources, liquidity, financial performance, pension funding and results of operations, plans, strategies, opportunities, developments and productivity initiatives, competitive positioning, and trends in particular markets or industries. In addition, statements related to our long-term financial framework achieving differentiated long-term performance for shareholders, our outlook for 2025+, and all statements set forth in the “Summary & Outlook” section above, as well as other statements that are not strictly historic in nature are forward-looking. These statements may be identified by the use of forward-looking words or phrases such as “believe”, “expect”, “anticipate”, “intend”, “depend”, “plan”, “estimated”, “predict”, “target”, “should”, “could”, “may”, “subject to”, “continues”, “growing”, “prospective”, “forecast”, “projected”, “purport”, “might”, “if”, “contemplate”, “potential”, “pending”, “target”, “goals”, “scheduled”, “will”, “will likely be”, and similar words and phrases. Such forward-looking statements are based on our current expectations and involve numerous assumptions, known and unknown risks, uncertainties and other factors which may cause actual and future performance or the Company’s achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: business conditions, geopolitical conditions (including the wars in Ukraine and the Middle East, as well as trade tensions with China) and changes in general economic conditions in particular industries, markets or geographic regions, and ongoing softness in the telecommunication markets and residential market of Electrical Solutions, as well as the potential for a significant economic slowdown, macro-economic effects of the U.S. government federal deficit, continued inflation, stagflation or recession, higher interest rates, and higher energy costs; our ability to offset increases in material and non-material costs through price recovery and volume growth; effects of unfavorable foreign currency exchange rates and the potential use of hedging instruments to hedge the exposure to fluctuating rates of foreign currency exchange on inventory purchases; the outcome of contingencies or costs compared to amounts provided for such contingencies, including those with respect to pension withdrawal liabilities; achieving sales levels to meet revenue expectations; unexpected costs or charges, certain of which may be outside the Company’s control; the effects of significant increases in trade tariffs, import quotas and other trade restrictions or actions taken by the United States, Mexico, the United Kingdom, and other countries, including changes in U.S. trade policies that may be made by the current or a future presidential administration and changes in trade policies in other countries made in response to changes in U.S. trade policies; failure to achieve projected levels of efficiencies, cost savings and cost reduction measures, including those expected as a result of our lean initiatives and strategic sourcing plans, regulatory issues, changes in tax laws and policies including changes in current U.S. income tax rates, multijurisdictional implementation of the Organisation for Economic Co-operation and Development’s comprehensive base erosion and profit shifting plan, or changes in geographic profit mix affecting tax rates and availability of tax incentives; the impact of and ability to fully manage and integrate acquired businesses, including the 2023 acquisitions of EI Electronics LLC, Indústria Eletromecânica Balestro Ltda.; and Northern Star Holdings, Inc. (the Systems Control business), as well as the failure to realize expected synergies and benefits anticipated when we make an acquisition due to potential adverse reactions or changes to business or employee relationships resulting from completion of the transaction, competitive responses to the transaction, the possibility that the anticipated benefits of the transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the acquired business, diversion of management’s attention from ongoing business operations and opportunities, and litigation relating to the transaction; the impact of certain divestitures, including the benefits and costs of the sale of the residential lighting business; the ability to effectively develop and introduce new products, expand into new markets and deploy capital; and other factors described in our Securities and Exchange Commission filings, including in the “Business”, “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Forward-Looking Statements” and “Quantitative and Qualitative Disclosures about Market Risk” sections in the Annual Report on Form 10-K for the year ended December 31, 2023 and Quarterly Reports on Form 10-Q.

About the Company

Hubbell Incorporated is a leading manufacturer of utility and electrical solutions enabling customers to operate critical infrastructure safely, reliably and efficiently. With 2024 revenues of $5.6 billion, Hubbell solutions electrify economies and energize communities. The corporate headquarters is located in Shelton, CT.

Contact:        

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NON-GAAP DEFINITIONS
References to “adjusted” operating measures exclude the impact of certain costs, gains or losses. Management believes these adjusted operating measures provide useful information regarding our underlying performance from period to period and an understanding of our results of operations without regard to items we do not consider a component of our core operating performance. Adjusted operating measures are non-GAAP measures, and include adjusted operating income, adjusted operating margin, adjusted net income attributed to Hubbell Incorporated, adjusted net income available to common shareholders, adjusted earnings per diluted share, and Adjusted EBITDA. These non-GAAP measures exclude, where applicable:

• Amortization of all intangible assets associated with our business acquisitions, including inventory step-up amortization associated with those acquisitions. The intangible assets associated with our business acquisitions arise from the allocation of the purchase price using the acquisition method of accounting in accordance with Accounting Standards Codification 805, “Business Combinations.” These assets consist primarily of customer relationships, developed technology, trademarks and tradenames, and patents, as reported in Note 7—Goodwill and Other Intangible Assets, under the heading “Total Definite-Lived Intangibles,” within the Company’s audited consolidated financial statements set forth in its Annual Report on Form 10-K for Fiscal Year Ended December 31, 2023. The Company excludes these non-cash expenses because we believe it (i) enhances management’s and investors’ ability to analyze underlying business performance, (ii) facilitates comparisons of our financial results over multiple periods, and (iii) provides more relevant comparisons of our results with the results of other companies as the amortization expense associated with these assets may fluctuate significantly from period to period based on the timing, size, nature, and number of acquisitions. Although we exclude amortization of these acquired intangible assets and inventory step-up from our non-GAAP results, we believe that it is important for investors to understand that revenue generated, in part, from such intangibles is included within revenue in determining adjusted net income attributable to Hubbell Incorporated.
• Transaction, integration, and separation costs associated with our business acquisitions and divestitures. The effects that acquisitions and divestitures may have on our results fluctuate significantly based on the timing, size, and number of transactions, and therefore results in significant volatility in the costs to complete transactions and integrate or separate the businesses. The size of acquisition and divestiture actions taken by the Company in the fourth quarter of 2023 has resulted in a significant increase in these costs, as a result we believe excluding costs, relating to these fourth quarter transactions provides useful and more comparative information to investors to better assess our operating performance.
• Gains or losses from the disposition of a business. The Company excludes these gains or losses because we believe it enhances management’s and investors’ ability to analyze underlying business performance and facilitates comparisons of our financial results over multiple periods. In the first quarter of 2024 the Company recognized a $5.3 million pre-tax loss on the disposition of the residential lighting business.
• The income tax effect directly related to the disposition of the residential lighting business. In the first quarter of 2024 the Company recognized $6.8 million of income tax expense on the sale of the residential lighting business, primarily driven by differences between book and tax basis in goodwill.
• Income tax effects of the above adjustments, which are calculated using the statutory tax rate, taking into consideration the nature of the item and the relevant taxing jurisdiction, unless otherwise noted.

Adjusted EBITDA is a non-GAAP measure that excludes the items noted above and also excludes the Other income (expense), net, Interest expense, net, and Provision for income taxes captions of the Condensed Consolidated Statement of Income, as well as depreciation and amortization expense.

Net debt (defined as total debt less cash and investments) to total capital is a non-GAAP measure that we believe is a useful measure for evaluating the Company’s financial leverage and the ability to meet its funding needs.

Free cash flow is a non-GAAP measure that we believe provides useful information regarding the Company’s ability to generate cash without reliance on external financing. In addition, management uses free cash flow to evaluate the resources available for investments in the business, strategic acquisitions and further strengthening the balance sheet.

In connection with our restructuring and related actions we have incurred restructuring costs as defined by U.S. GAAP, which are primarily severance and employee benefits, asset impairments, accelerated depreciation, as well as facility closure, contract termination and certain pension costs that are directly related to restructuring actions. We also incur restructuring-related costs, which are costs associated with our business transformation initiatives, including the consolidation of back-office functions and streamlining our processes, and certain other costs and gains associated with restructuring actions. We refer to these costs on a combined basis as “restructuring and related costs”, which is a non-GAAP measure.

Organic net sales, a non-GAAP measure, represents net sales according to U.S. GAAP, less net sales from acquisitions and divestitures during the first twelve months of ownership or divestiture, respectively, less the effect of fluctuations in net sales from foreign currency exchange. The period-over-period effect of fluctuations in net sales from foreign currency exchange is calculated as the difference between local currency net sales of the prior period translated at the current period exchange rate as compared to the same local currency net sales translated at the prior period exchange rate. We believe this measure provides management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, as these activities can obscure underlying trends. When comparing net sales growth between periods excluding the effects of acquisitions, business dispositions and currency exchange rates, those effects are different when comparing results for different periods. For example, because net sales from acquisitions are considered inorganic from the date we complete an acquisition through the end of the first year following the acquisition, net sales from such acquisition are reflected as organic net sales thereafter.

There are limitations to the use of non-GAAP measures. Non-GAAP measures do not present complete financial results. We compensate for this limitation by providing a reconciliation between our non-GAAP financial measures and the respective most directly comparable financial measure calculated and presented in accordance with GAAP. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. These financial measures should not be considered in isolation from, as substitutes for, or alternative measures of, reported GAAP financial results, and should be viewed in conjunction with the most comparable GAAP financial measures and the provided reconciliations thereto. We believe, however, that these non-GAAP financial measures, when viewed together with our GAAP results and related reconciliations, provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.

Reconciliations of each of these non-GAAP measures to the most directly comparable GAAP measure can be found in the tables below. When we provide our expectations for organic net sales, adjusted effective tax rate, adjusted diluted EPS and free cash flow on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures (expected net sales, effective tax rate, diluted EPS and net cash flows provided by operating activities) generally is not available without unreasonable effort due to potentially high variability, complexity and low visibility as to the items that would be excluded from the GAAP measure in the relevant future period, such as unusual gains and losses, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions and divestitures, certain financing costs, and other structural changes or their probable significance. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results.

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Condensed Consolidated Statement of Income
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Condensed Consolidated Balance Sheet
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Condensed Consolidated Statement of Cash Flows
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Earnings Per Share
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Segment Information
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Organic Net Sales Growth
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Adjusted EBITDA
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Restructuring and Related Costs Included in Consolidated Results
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Ratios of Total Debt to Total Capital and Net Debt to Total Capital

Free Cash Flow Reconciliation