Q3 2024 Hubbell Inc Earnings Call

Dan Innamorato; Vice President, IR; Hubbell Inc

Gerben Bakker; Chairman of the Board, President, Chief Executive Officer; Hubbell Inc

William Sperry; Chief Financial Officer, Executive Vice President; Hubbell Inc

Jeffrey Sprague; Analyst; Vertical Research Partners

Steve Tusa; Analyst; JPMorgan Chase & Co.

Nigel Coe; Analyst; Wolfe Research

Julian Michelle; Analyst; Barclays Capital Inc

Joseph O'Dea; Analyst; Wells Fargo & Company

Chris Snyder; Analyst; Morgan Stanley

Christopher Glynn; Analyst; Oppenheimer & Co. Inc

Brett Linzey; Analyst; Mizuho Securities Co., Ltd

Nicole DeBlase; Analyst; Deutsche Bank Securities Inc.

Scott Graham; Analyst; Seaport Research Partners LLC

Operator

Good day. Thank you for standing by. Welcome to the Third Quarter 2024 for Hubbell Incorporated earnings conference call.
(Operator Instructions)
Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dan Marotta, VP of Investor Relations.

Dan Innamorato

Thanks, operator. Good morning, everyone, and thank you for joining us. Earlier this morning, we issued a press release announcing our results for the third quarter of 2024. For the press release and slides are posted to the Investor section of our website at Hubbell.com.
I'm joined today by Chairman, President and CEO, Gerben Bakker and Executive Vice President and CFO, William Sperry. Please note, our comments this morning may have statements related to the expected future results of our company in our forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Please note the discussion of forward-looking statements in our press release and consider it incorporated by reference into this call. Comments may also include non-GAAP financial measures. Those measures are reconciled with comparable GAAP measures are in included in the press release and slides. Now let me turn the call over to Gerben.

Gerben Bakker

Great. Good morning and thank you for joining us to discuss Hubbell's Third Quarter 2024 results. Hubbell delivered strong operating performance in the quarter, generating 14% year over year, adjusted earnings per share and operating profit growth as well as 180 basis points of adjusted operating margin expansion. We are raising our full year outlook this morning, and we remain confident in delivering double digit adjusted operating profit growth in 2024.
In our Utility Solutions segment, Grid modernization and electrification continue to drive strong growth in transmission, substation and grid automation markets as utility customers invest in grid infrastructure upgrades to accommodate electrification driven load growth and energy connect new sources of renewable generation. We believe that we are at the early stages of a multiyear T & D investment cycle and that Hubbell's leading positions and service levels position us for sustained GDP plus growth over the long term. As anticipated, telecom markets remained weak and utility distribution markets continued to reflect the impact of customer inventory normalization. Operational execution was strong in the quarter and Utility Solutions return to year-over-year operating margin expansion.
Electrabel solutions delivered another quarter of strong core operating performance with solid organic growth and 190 basis points of adjusted operating margin expansion.
Performance in the quarter was led by strength in data center and renewable markets where we are executing effectively on our strategy to compete collectively in high growth verticals, which specified positions innovative new products and an integrated solution-oriented service model for customers. From an operational standpoint, we continue to simplify our business to drive productivity and operating efficiencies, which, along with portfolio transformation efforts, contributed to robust margin expansion in the quarter.
Overall, while we continue to navigate pockets of challenges in certain large high margin businesses published proving the ability to compound off of recent outperformance. As we look ahead, our portfolio and strategy uniquely position Hubbell to capitalize on grid modernization and electrification megatrends, we are confident in our ability to deliver on our increased full year outlook as well as to achieve differentiated performance for our shareholders over the long term.
Before I turn it over to Bill to discuss the quarter in more detail, I would like to provide some additional context on recent storm activity and the potential implication to our business. First and foremost, our thoughts are with all the people and communities impacted by these catastrophic. Hubbell has a large manufacturing presence in the US. Southeast and three of our manufacturing facilities were impacted and encountered disruptions as a result of hurricane saline and Milton, however, all have quickly return to full operation, and I'm relieved that all of our employees are safe.
I am proud of how Hubble and our employees have responded in support of all of those in need during this time as well as the collective efforts to serve our customers and ensure that critical infrastructure and the impact that community is restored safely and efficiently. When we highlight service as a key differentiator in our industry stores are prime examples where our customers depend on trusted partners who can reliably serve their needs at scale and with agility. Our dedicated emergency response team is unique in this regard, providing customers with 24 seven support dedicated storm inventory, prioritize production engineering to support to identify alternative restoration solutions and logistics capability to expedite delivery and never charging premiums or fees viewing it as our obligation and privilege to make a positive impact during these times of critical need. Bill will provide you with more specifics on the financial impact of the storms in the third quarter in a few minutes, as well as the anticipated contribution of storm related orders in the fourth quarter. As we have highlighted many times over the years, the impact of storms typically represents only a small portion of full year revenues. But more importantly, they highlight the ongoing need to harden our critical infrastructure in order to mitigate against the increasing impact of extreme weather events as well as the mission critical nature of Hubbell product offerings and our commitments to service excellence for our customer. More details of the quarter.