Hubbell (HUBB) Q1 FY26 earnings call: guidance and Q&A

Can you provide more color on the $1.5 billion high-voltage transmission outlook, its pacing, and if it's incremental to prior market views?

The $1.5 billion opportunity over 10 years is seen as incremental upside to existing transmission markets, driven by the need to move bulk power efficiently. Hubbell is well-positioned with existing products and is developing new ones, with content per mile increasing for higher voltages. This spending is not expected to squeeze out other T&D investments.

“We look at this truthfully as incremental, Jeff. We see this as upside to what's already needed. Any time you have a 765 kV, you need off ramps for that, right, where you take the power down, think highways and offshoots of that, off ramps with substations and then you step the voltages down.”

asked by Jeffrey Sprague · answered by Gerben Bakker

How should we think about the operating margin cadence and leverage through the balance of the year, especially for each segment?

The full year is expected to see 20 basis points of margin expansion, leaning heavier towards Utility Solutions with consistent expansion, while Electrical Solutions will be flattish. Inflation and price/productivity actions, while offsetting costs, are margin dilutive, resulting in a more modest margin expansion outlook.

“Keep in mind, there's a lot of inflation that's come on. And as we cover that inflation with price and productivity, that is certainly margin dilutive. So in our 20 basis point of margin expansion at the midpoint of the guide, there's about 1 point of dilution just from that price cost math.”

asked by Julian Mitchell · answered by Joseph Capozzoli

Can you unpack the 6% to 9% organic growth guidance into price versus volume, and provide an update on DMC Power's performance?

The full-year organic growth includes about 3 points from price (up from 2 points due to Q2 actions) and the rest from volume. DMC Power is exceeding expectations, positioned in high-investment areas, and demand is strong, requiring capacity additions.

“So our full year 6% to 9% organic has about 3 points price, but with the rest being volume.”

asked by Tommy Moll · answered by Daniel Innamorato

How are Section 232 tariffs changing the landscape, and what are the thoughts on segment margins?

The sum of all tariff changes (232, IEEPA repeal, 122) is neutral for the year. Hubbell was already paying 232 tariffs. Full-year margin expansion of 20 bps will be heavier in Utility Solutions, with Electrical Solutions being flattish. Price/cost management aims for neutral or better on a dollar basis.

“But the sum of all of that is about neutral to us for the year. So that impact was not significant.”

asked by Nigel Coe · answered by Daniel Innamorato

What are the grid infrastructure growth expectations for the year, and what's the outlook for electrical distribution?

Grid infrastructure is expected to see mid- to high single-digit organic growth consistently through Q2, Q3, and Q4. Electrical distribution is also performing well, driven by grid hardening and resiliency investments, with underlying demand proving solid after destocking.

“Grid infrastructure is expected to see mid- to high single-digit organic growth consistently through Q2, Q3, and Q4.”

asked by Joseph O'Dea · answered by Daniel Innamorato

Is the new >25% full-year data center growth outlook based on available capacity, or can you ship more if demand sustains?

Long-cycle data center business is booked out with little incremental capacity. For short-cycle, Hubbell is continuously adding capacity and inventory to meet strong order demand, suggesting some flexibility to ship more if demand sustains.

“Every quarter, we're adding more and more capacity and we continue to add inventory to every extent possible so that we've got stock on the shelf for that short cycle, book and bill side of products that are needed for data center.”

asked by Christopher Snyder · answered by Joseph Capozzoli

Can you discuss Aclara's sales trend in the quarter and its positioning for AMI 2.0, including when that cycle might kick off?

Aclara's decline is shrinking, and the business is expected to return to modest growth after Q1. Utilities have deselected AMI investments in favor of other areas, but the equipment will eventually need replacement. Hubbell is seeing more project discussions and recent wins, indicating stabilization and future growth.

“But we feel it's been -- it's stabilized, and maybe that's another really important that we've seen the bottom. We're now starting to come up, we're not super expecting great growth rates, but the dynamics are such that this business should grow from here.”

asked by Charles Albert Dillard · answered by Gerben Bakker

How is the supply chain behaving with higher inflation and geopolitical uncertainties, and what is the outlook for the acquisition pipeline?

The supply chain is holding up well with no significant constraints, though some aluminum sourcing was shifted due to Middle East disruptions. The M&A pipeline is healthy, with opportunities for both bolt-ons and larger deals in core areas like T&D and data centers. Share buybacks are also utilized when M&A timing is unpredictable.

“The pipeline of opportunities remains healthy and active, and we continue to remain disciplined in our approach. Share repurchases represents an additional lever that we can and will utilize to return cash to shareholders over time.”

asked by Scott Graham · answered by Joseph Capozzoli