Hubbell’s first quarter results fell short of Wall Street’s expectations, prompting a negative market reaction. Management attributed the performance to persistent cost inflation from raw materials and tariffs, as well as anticipated softness in grid automation. CEO Gerben Bakker noted that while Electrical Solutions delivered mid-single-digit organic growth, grid infrastructure only returned to organic growth after a period of customer inventory normalization. Utility Solutions faced a challenging comparison due to last year’s strong results in grid automation, creating a headwind for overall sales. However, Bakker emphasized, “Our segment unification efforts and our strategy to compete collectively are driving outgrowth in key vertical markets, most notably evidenced by strong data center growth in first quarter.”
Is now the time to buy HUBB? Find out in our full research report (it’s free).
Hubbell (HUBB) Q1 CY2025 Highlights:
- Revenue: $1.37 billion vs analyst estimates of $1.38 billion (2.4% year-on-year decline, 1.3% miss)
- Adjusted EPS: $3.50 vs analyst expectations of $3.72 (6% miss)
- Adjusted EBITDA: $285.7 million vs analyst estimates of $301.6 million (20.9% margin, 5.3% miss)
- Management reiterated its full-year Adjusted EPS guidance of $17.60 at the midpoint
- Operating Margin: 17.5%, up from 16.3% in the same quarter last year
- Organic Revenue was flat year on year (2.3% in the same quarter last year)
- Market Capitalization: $21.3 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Hubbell’s Q1 Earnings Call
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Jeffrey Sprague (Vertical Research) pressed for clarity on whether the $0.50 sensitivity in EPS guidance fully reflects tariff impacts; CEO Gerben Bakker confirmed it is a sensitivity analysis, not a revised outlook, and emphasized ongoing mitigation efforts.
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Charles Stephen Tusa (JPMorgan) asked how quickly price increases would flow through and whether any pre-buying was occurring; management indicated price realization should accelerate in Electrical Solutions and saw no evidence of widespread pre-buying.
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Nigel Coe (Wolfe Research) questioned the company’s exposure to Chinese imports and the potential for market share gains; Bakker explained that exposure has been reduced and supply chain adjustments are ongoing, but he does not see a broad competitive advantage or disadvantage versus peers.
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Christopher Snyder (Morgan Stanley) inquired about price/cost dynamics and whether the company expects a margin tailwind in the back half of the year; CFO William Sperry confirmed expectations for a positive shift as price increases outpace cost inflation later in the year.
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Julian Mitchell (Barclays) pressed on the assumptions behind volume growth in the second half and the impact on margin outlook; Sperry cited a strong order book, easier year-over-year comparisons, and improvements in both distribution and telecom products as drivers of the anticipated volume recovery.
Catalysts in Upcoming Quarters
In upcoming quarters, our analysts will be tracking (1) the effectiveness and customer acceptance of recent price increases aimed at offsetting input cost inflation and tariffs, (2) the pace of order growth and backlog conversion in both utility and electrical markets, and (3) the progression of margin trends as price realization and cost mitigation strategies take hold. Developments in utility capital spending and further supply chain adjustments will also be key watchpoints.
Hubbell currently trades at $399.06, up from $362.46 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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