Hubbell (HUBB) Q2 FY26 earnings call: guidance and Q&A

What's driving the double-digit distribution strength, and is the lower Q2 transmission/substation growth just timing given strong orders?

Management confirmed strong, broad-based orders (1.2x book-to-bill) across Utility Solutions, with distribution benefiting from underlying markets and easier comps post-destock. Transmission/substation growth is expected to accelerate in H2, with Q2 being project timing noise, and orders already booking into 2027.

“Yes, I would say nothing really to say on the supply [Audio gap] chain, we are continuing to add capacity in our business. Our substation part of the business, particularly where we're adding capacity. But again, this is embedded in our guidance, supported by the orders and the backlog. So it's why we're confident that we'll see growth accelerating there as we go into the second half.”

asked by Jeffrey Sprague · answered by Gerben Bakker

Will H2 margin expansion be level-loaded or front-loaded, especially with the Q3 tariff refund?

Management confirmed that H2 margin expansion will be more front-loaded, primarily due to the timing of the IPA tariff refunds in Q3.

“Yes. You put your finger on it there, Jeff. We're anticipating it is going to be a little more front-loaded given the nature and the timing of those IEPA tariff refunds and how they roll through. but really confident in that back half margin expansion playing out.”

asked by Jeffrey Sprague · answered by Joseph Capozzoli

Is there visibility into 2027 orders, and how do customer conversations trend for next year's organic growth?

Orders are already being booked into 2027, particularly for transmission and substation projects, driven by long-term load growth and data center build-outs. Customer conversations and the order book provide confidence for continued attractive performance.

“Yes. I would -- echo here. We are seeing orders starting to be booked into 2027. That's particularly on the transmission and substation side of the business. Again, if you look at what utilities are doing, they're having a plan well into the future with some of these load growth and capacity that they're bringing online as we see higher voltage systems, those tend to book out further.”

asked by Christopher Snyder · answered by Gerben Bakker

How has the April price increase been realized, has there been pushback, and are more price actions expected in H2?

The April price increase contributed 1 point, and an additional 0.5 point is expected from a July price increase in H2. Total price realization for FY26 is now anticipated to be 3 to 4 points, offsetting increased inflation. No significant pushback was mentioned.

“So coming into the year, we were anticipating 2 points. We had the April price increase at a point, and now we're adding roughly another 0.5 point or so. So kind of think about it like 3 to 4 points for the full year, Chris.”

asked by Christopher Snyder · answered by Daniel Innamorato

What verticals are seeing capacity expansion, what's the revenue unlock, and when will it be completed?

CapEx of $175M-$190M for FY26 is largely for capacity and productivity. New capacity is continuously brought online, contributing roughly $25M in new revenue per quarter on a go-forward basis. Expansion is ongoing through H2 2026 and into 2027.

“Over the last couple of years, we continue to bring new capacity online in every quarter as that gets turned on, we continue to absorb new revenues into that capacity. It's hard to say exactly how much that translates to every quarter. But if you think about on a go-forward basis, bring on roughly $25 million of new capacity-ish. It's not always linear, but we'll continue to do that as we progress the back half '26 and as we work our way through '27.”

asked by Chad Dillard · answered by Daniel Innamorato

Can you break down the 40 bps increase in full-year operating margin between tariffs, NSI, and core price/cost productivity?

Management confirmed 30 bps from net tariffs and 40 bps from NSI. The remaining operational improvement is from volume growth (primarily Electrical, non-res, light industrial, data center) partially offset by higher investments to support this growth.

“Yes. Good morning, Nigel. Definitely, you're right on the 30 bps from net tariff to 40 bps on NSI, squares up with our math. And then we've got, we'll call it, operational, which is really volume growth, which is coming primarily from the Electrical side, nonres, light industrial, data center uptick that's being partially offset by higher levels of investment that we're anticipating making back into supporting all of this growth.”

asked by Nigel Coe · answered by Daniel Innamorato

Update on the $1.5 billion over 10 years high-voltage transmission opportunity, and project start timing.

The opportunity is broad-based where load growth and data centers are concentrated. First 765KV shipments start in 2027, and 550KV shipments begin in H2 2026. Quoting and pipeline activity for higher KV projects has doubled, confirming the multi-year opportunity.

“And our first 765 , which we talked about winning, we'll start shipping in '27. We're also seeing 550 KV, which is similarly an application used for these interconnects that we're shipping this year in the second half of this year. So you're right to point out that it's about happening at later part of this year and then certainly into next year.”

asked by Neal Burk · answered by Gerben Bakker