HUBB - Earnings call transcript Q2 2018

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Operator

Good morning. My name is Amanda, and I’ll be your conference operator today. At this time, I’d like to welcome everyone to the second quarter 2018 results conference call. [Operator Instructions] Thank you. Ms. begin may you Lee, your conference. Maria

Maria Lee

been Vice that company, Good note Litigation statements I defined release earnings am into consider and Amanda. Chief Hubbell Officer, Please our announced have in morning, Bill comments quarter forward-looking slide Financial hubbell.com. this Chairman, expected please this include everyone, us. by www. at incorporated joining Executive Private morning. Reform it website as Senior may the and Investors our Nord; for related Therefore, for statements XXXX. our its thanks Dave and joined Sperry. future and to section note morning our press call. posted and Securities statements Chief Officer, of the this reference and of by President Thanks, President results today results and the XXXX release second our by the press The Act forward-looking to discussion of our are of materials

addition, Those the measures non-GAAP and in are financial press the materials. comments measures. earnings are release to GAAP measures, slide comparable include reconciled may In in included the also

turn to over the me Dave. let Now call

Dave Nord

everybody. Thanks, Thanks us. Good joining morning, Maria. for

on to bit that you You we Bottom said feel the It we commitments. guidance performance reflected we can year, in the in or months at about today line year. EPG, you from continue deliver the our see was our and our ability today second of even meet ago And later. ability overall which we through exceed the our full our just the is, quarter and full confident we’re remain to that’s results markets had for release more in a see as you, we’ll walk a quarter good to tell and raised can results. Hubbell, expectations strong press I’ll for obviously a for our couple confident

I from key results, Page a on what into performance. at really on quarter Before minutes on second Bill see details just we takeaways few spend the wanted the gets our the X. Starting to of some

continue the we’ve only are markets at to taking material of positively. First, all high the our growing growing, X% trend growth of laid to line expectations. end with end our they’re X% but out. each And Price to assumption range end markets from our end-market previously overall upfront X%. cost, in we’re X% Not to

We additional than in material on previously certainly We of headwind traction results continue good pricing little the the from we and acquisition than saw integration bit marketplace. on Hubbell’s with overall. which on better ahead execution continue offset to the largest strong expectations sales costs by we’re actions, to history, Aclara, more that’s performance. but trend more On seeing see well a anticipated, in trending

strong flow the raise to on increased List for this of put been for that of our business place, our cash reflecting X. confidence quarter that first the year XXXX after performance. Section expect the an the XXX% is, to in guidance, our raising in XXX specifically We tariffs and have is of EPS impact note guidance the of adjusted on List underlying some the inclusive finally, X free quarter was good track we’re net softer And we Our continue and news and of year. income in we’re excess deliver back a

we reclass have of increases. and also, the And to doing absorbs guidance, expense. through talked where previously to thought about where – mitigation it accounting disclosed Aclara offsetting including of We’re some remember, we price at that R&D our actions as previously change CapEx

of items the certainly of raise reflective while to these is guidance So the we think that performance the strong ability absorbing business.

the of wanted turn but I to to as I the key I do, to – by Bill, like in the a it over before before just accomplishments quarter. couple So team highlight

growth think, first group, a while Vega operating customers, executing simultaneously plant from for which with performance. from travel customer to shows they’re Rico, consecutive received doing. we a focused a I the how for no Puerto in Darrin’s also in quality high delivering months, on award team, great all, accomplishment It check and Commercial of had Construction levels key we business, through Energy and and of the X strong is chance our everyone’s see gas And the team. Baja and part product our of defects Industrial in to

they tell island. impacted amount the of to fall last from day Hurricane tremendous takes their I showing I spirits. was a talking the wanting that the after heard severely people, stories recall were hurricane crush first-hand up work. a about You the it can the go plant you But certainly to lot destruction people with at Maria. to There to to

we’ll line, to power, had year, the quite in has, lastly improvements first for performance the level that is to obviously margin focus them. which and team They work his side. all we personal an are are electric been ZoneScan, and burden. price in Of quarter and second arrangements. no second the mean, Electrical so have see you doing job, had their their a commitment business, testimony back that getting for organization I Power is the to they doing their and do which build help ease target the It quarter. continuing which The our on great compliment can course, we was with there. a in team the But and Aclara, team the culture above to portfolio The and it the in hand. up Hubbell last that cost international discipline all took product, just the America, plant the to commitment is Pacific. orders loss, Obviously, make throughout integration we the diversifying they on that, and over the announced working, despite the other the getting said part well team to Lighting, and of their water great of alternative South They’re in AMI. is second is quarter they shows had some in above great is is coming to a that of Kevin the in sure. meter order for big Power continue Asia Synergize I Orders They XX% innovation. business AMI from Europe, in And RF, revenue see would plan. Caribbean, on the

track with the in detail into news. pleased good all The get that little a minute. integration’s a in we’re So more and on will and Bill very performance, just

a start to year, the me let into good to to more get think turn over and it I all, So in Bill all details.

Bill Sperry

second Dave, time for the quarter that Thank you, and performance thank performance was the top was taking Hubbell’s very engine join us. line. and strong, you, of in everybody, the to

is end-market X%. You see X%, very growth consistent organic really, broad billion, coming sales from to constructive of That end growth. of and markets contributing backdrop, $X.XX representing that organic

in you addition, inorganic XX% growth another line as In adding the to story. top invested acquisitions we’ve our see successfully

about margin headwinds to we OP, and points expansion help well. to basis And – the of growth there performance as flow very talk For year. that, from really price our that increase expansion cash very of XX% outcome And the prior cash performance $X.XX, business to facing. executed overcome volume well. We to we we’ll importance growth earnings and sales strong and XX.X%, more are is flow that cost of A strategy. all XX of and that earnings productivity using the saw margin executing solid driving

X% I’m sales of on growth, organic. and this see from with engine success, in So which Page by lot of let’s XX%, The arrows the is the driven acquisitions, green start you’ll but obviously, support. consistent end-market there, a very And largely strong the X.

look expansion. prior we for separate private the In between Distribution, there of non-res important public seventh are conditions enjoying non-res indicators On out Transmission starts and Electrical they’re non-res. there peak sides terms leading and much the in year of appears in still to that strong. momentum, the at XX% both here, us continued growth We’re you market, and The first very it & of are side, below When and more supportive obviously. private. the

For projects really midsized growth there. the to Transmission, are small powering

side, Distribution strong. also the On

And influence, by coming also, general very well been business. but been for to is storms has few we’re there side all heavy a and gas has double and oil as gas, seeing on distribution the Nature’s strong invested well. similar as growing. on We’re construction the seeing in there. us our the On fires a of spending to to nice digits, there, with build Mother distribution last in been the of digits. has supportive system very you been the million the But about some $XXX business, over Southeast. years, hardening mid-single volume know, as as weather particular, good welcome in caused more rebound very Power we’ve And exposure gas Industrial back California Industrial, side, Oil has resi to

very, a performance. end-market picture underlying supportive So sales our very

they’re XXX at So to The revenue as million of coming point. selling having Aclara where between basis in we points a as below we expense being expense, was as the from at $XXX you terms margin down see and absorbing Page margin S&A on about have saved you XX% the on gross on and of you’ll break administrative as profit headwinds base year percentage bit and But see we’ll gross profit, as about benefit we sales. the price a of S&A, the operating X on larger and right, $XXX material can look last and lower of growing see little million. a efficient

profit operating into on Page X. translates that So

million $XX $XXX of to see new You income operating million.

XX earnings. share you earnings, the help XX% $X.XX of increase of and a That Then that coming kind see that. dollar expansion. you from if very And to You see to $X.XX, through inorganic basis organic healthy through representing volume see both points XX% in flows per earnings in drive to increase of is margin increase.

a lower While were very have of rates, tax helpful, we which acquisition. the we higher that did expense interest offsetting of some because had

improvement. operating an it’s that So driving story that’s really earnings

margin all and expansion three now amongst Page X% we kind XXX quarter very that saw start of basis of businesses the that and So strong expansion. I’ll on with sales two groups the had growth break comprise segment. organic we to contributing XX.X%, with earnings. a our saw Very, We’ll segment. points margin the growth X driving expansion down margin each segments. to Electrical We of the that three Electrical for

Industrial growth, within the growers Highest at and X%. single double digits in were digits. that’s So gas organic the sales in the high all

So good consistent growth across-the-board.

For business, of of a restructuring the cost drag volume with are modest had story, all off. they management very as point their impressively flat margins but really our creating price pay starting benefits their about improved volume Lighting growth a and to

try and volume switch segment very there the be strong story on discussed, strategy of Distribution, as the X, But organic supportive really as million for see sales positive to see a Page can. there the underlying for to you acquisition the Transmission a to not very share to Electrical very, that. important chase Also, & unproductive we team is quarter. fronts the the $XXX segment. incrementals for growth we’ll So price as And and power. Lighting in disciplined XX% you the strong the of there. increase providing X% the and lion’s we’ve both here,

they improved two the million. of XX% still margins are points, price lower first coming higher a price and material see Aclara better up income Power. since had cost the down there an referenced cost result a costs, for David did having For quarter. income, in a than you see but second margins to comments, increase headwind and increase so as higher they to The an you operating the on have managed and did they headwind pricing in his as position starting have as set in in less $XX that half They –

our very second a of performance for the was flow quarter. cash free So part important

on to good for You quarter. a can chart, second the the strong of $XXX cash important have half million us see prior It a was to free very improvement year, top of very flow.

had on top I and essentially recall think And of that, we we breakeven first about coming costs. tax the onetimers of out from $XX a transaction million of had quarter, you’ll Aclara quarter. reform

of that million, this So amount for so you year-to-date income. we’re had in of And the And the we ahead quarter gets supportive free having within of half $XXX for million of expect million cash for expect year. million the year-to-date CapEx second that flow what essentially, year at operating spending us line is promised the year. of $XXX cash full the net cash about flow that operating we of support we about $XXX of we’ve $XX to flow

show a what’s to would that years. portfolio, we of wanted you useful the something the also talked be we’ve had thought we’ve the consistently about EBITDA in lot on given We growing a the in changes Page measure Not show XX. But quite over business. to it

see for the on both the are on the interest very EBITDA. And double-digit healthy and burden taxes bottom, the you So largely between offset. top a and of quarter growth year-to-date, the year-to-date rates the

the good income we’re as Maria burdening comment noncash really to showing the this measure on was so growth a structure. capital I measure, that’s well of a So XX what is amortization And is both quite to you. that the business of that in why that’s as ask trajectory the to show earnings on cash net indicator to simple going Page

Maria Lee

Thanks, Okay. Bill.

cash of the the approximately of structure, quarter ended U.S. was second XX% of outside which million $XXX we On capital held the with

repatriated year-end, term the pay As commercial paper to million both down for from debt, in cash $XXX used decrease some and we it of about international cash and loan.

at February. looks it’s it actually X-month borrowings been While to fund increased QX in results significantly million of acquisition CP had period, like the in flat for the as Aclara the pretty $XX

from level. hard the balance the into of lot a reducing work went that So QX team from

see prepayable Aclara the in also paying issued started we with down amortization loan, we million of which $XXX the can You our connection acquisition. term

our available. is allocation senior is four million rates all leverage backs notes, of priorities. commercial also of capital long-term facility one our mid-Xs, low have and We and a in program tranches that we the have our to credit $XXX fully paper Reducing with

Our to reduce year-end by about under Bill. X.X hand turn it and to total on just I’ll is And debt that, back we our track approximately with X.X debt-to-EBITDA XX% ratio net to capital by remain to times XXXX.

Bill Sperry

I Maria of capital as mentioned. think more I’d also on kind allocation, comment largely

at quarter We able and of the We mentioned as $XX about been some Friday. more paydown anticipate here debt be mentioned, our balance the doing halfway dividend invest million bought small the and the in shares through. well. to announced So growing back we sheet rest through worth of think I we’ve year. $XX as I the to Maria CapEx, got acquisitions on million poised in

the think, the flow highlighted each are of closer Page business. of that midpoint. to end-market supportive all XX. markets balance capital state the end to and the the of fact So our this very cash top growth us performing of Dave outlook allocation the our the strategy of I continuing support essentially, range sheet, was the profitable and that, of rather than

point. we’ve what raise done the So bottom here is essentially

starting previously X% Resi to here. So & was noon, raising at to Transmission X%, X% was X%. at we’re X% to to X% Distribution that

X%, Industrial to to Oil X%, actually X% to X%, gas X% there, to we X%. to Non-res was that positive We’re raising to was X% was X%. X% X% raised raising performance that X%. X% formerly to at to X%. seeing raising to to X% that so and

the end-market bottom effectively X% up X% of takes X%. to ends to the X% growth the those year from So expected to raising of effect all for

necessarily second seeing really, the but experienced we’re we the half, through. that half see, of in not a we recognition strength acceleration carrying again, that in first So that

half the pretty second on we’ve revisit price on really that from us, the cost And it’s we the had to to see in had material So a our quarter, with in you tariffs all. XX, increase it you did we price that Page in picture that can we’re we the cost that you tailwind cost reverse, And time importantly, discussing see more And the really the in at of tariffs spent that, price those had first the May wanted the all. excluded having go worth headwind traction was into material the Dave anticipating headwind fact discussing the has half. we’ve clear second increase the and maybe mentioned you create need that to to thought the this but quarter. traction with EPG picture,

with The with drivers with our that business red see see other and business. and is What price. material List we X, offsetting the areas. switches we’re us and Systems and commercial inflation connectors which impact XX is of was think, our essentially, Power SKUs of And when as you see the and XXX direct on that, our you and really, impact the that List So was on X Page essentially GFCI, industrial impacts affecting it immaterial. you are can start we one the cost business. is XXX, in largely indirect Section Industrial Commercial here,

In analyzing. one of in that’s so if order to that. but imports, using to impact price there And List a hard price the the offset price of it’ll Lighting environment are Lighting spending that that We’re Dave see to impacts process and has from very be those you. the raise of And It China are two impact reduce Asia, to realignment. say and that striving reacting remediating from lower-cost about notably. China time X you’ll us implementing price China still interesting, quarters. are will we shared impacts, we’re to as more – some to business, absorbing from chain, lists. Right in with the is fourth And of is primarily of already the magnitude everything chain of supply second to to levers, the now, in order of switching one we’re from supply see impact those lever with interesting we Mexico would we’re remediation be factors third we other particularly those, a as affects been something both U.S. those and is each our I guidance of $X.XX Chinese having that constructive from in anticipating influencing

about tariffs, us quarter. X a short, from X, and by in List in hurting $X.XX So

for offset And objective our our absorbing as well. that X in is We’re those List guide. impacts to

talk year. with balance I going the Dave our So for to that, was to back switch the about to of outlook

Dave Nord

Thanks, low maybe Obviously, as Yes, the better remainder XX%. some of Aclara, market I’ll of Aclara It XX%. there, acquisitions, development it’s well uptick XX% the the as product so are XX% new the on some we’re year modest went highlight that driving end-market specifically growth taking date, We was the All Great. sales in Bill. performance through outperformance drivers just think with XX. right. up and but end Page to the we see Still how of to our to of Bill the clearly growth. big end markets. more

mentioned the tightening raising I to As $X.XX $X.XX, earlier, $X.XX and we’re and adjusted EPS of $X.XX. to range. EPS EPS Diluted of

We’re the adjusted sure. year. the go for through raising on that. A we the $X.XX improved to lot attributing The by performance, bottom as operational

necessary my team there’s survive, can the to we’ve actions impact of of X is you from this XXX will uncertainty. but experience the not you recent Bill on assure view As whole X focused and think X, can early. List on that tell mentioned, and I that. – operate List is ultimately But in got I mitigate still all the everyone and Washington, industry we I that can think a I that XXX

that We’re continue to mitigate here, going it’s operating need accordingly we do to necessary what’s the operate to to on basis it’s and it.

it. we’re how And net that’s greater cash than flow, on obviously, working income. free So

we’re passed through I the the and noise getting dealing demonstrates some – think disciplined the quarter, that the that do first second some the quarter of getting with. can attention from that we certainly, of with

as the is you turn here. and already we bit a lower the Page Certainly, is to XX, this we you Aclara, if on showed just amortization. Key from changes lower an about, better, So quarter. update $X.XX performance talked little core amortization last waterfall

see what done. expectations. first So XXXX in is you’ve half the trending with let up year is me of shaping – summarize and we Certainly, solidly, The far how heard so line things. the our

positioned well to certainly strong this from to benefit We’re continue markets. end

to operations. off. lot We’re but more, restructuring just we actions day-to-day and will, continuing of that we are from a difficult our do continue to benefit the Certainly, part normal of paying

we repatriation from news. in tailwinds reform, some for on the the rates sheet of mentioned positive our seeing key allowed We’re balance good and history. of is earlier. – lower the And integration all that focus tax successful that’s of That’s the Maria course, both acquisition largest flexibility our

keep is have that to We’ve keep continue tariffs think inflation in at to we headwind, organization that that – us is more of think bay. the and others, commodity the battle process but that. seeing but seen we’re We getting We the I the to clearly in is turn. on – and of start I a the top to thrown at ways as traction place

So on just than a on second little stronger to planning may performance. were our I caught we it than we We price, on based the which are and little guidance get quarter do what strong to been track do. think Certainly, raised expected. demonstrate expected. our was It stronger market a we to we have do we up that could well needed

So our on we’re growth. year, priorities market for the going rest that of capitalize to continue to this

to continue products our to our price going and We’re get from differentiated service.

supporting long-term spend repurchase. to appropriately on share the actions going growth, that’s on acquisitions, R&D, whether We’re

of to right EPG. tell we’re our for we to that and this generating believe on commitments additional Aclara. going a details months those commitments at growth those you, thing continue will to a to provided can – on I’m our investors. make out on certainly in laid some to objectives confident, I Investor couple XXXX vision we’re we’re going differentiated because And deliver ago you vision doing and reality. track and represent focus our Day a March the for our at on earnings And believe that cash We’re We integrate do I

with let me it to So questions. up that, open Amanda?

Operator

Christopher question first with Your Oppenheimer. from Instructions] [Operator comes Glynn

Christopher Glynn

there. margins Electrical morning good Thanks, congratulations on

Bill Sperry

Chris. Thanks

Christopher Glynn

to better wasn’t seasonality reason fundamentals? – long-term seasonal think as lift. couple the usually of there’s some macro exactly Electrical, notion for case Is base there that the stick It last the case doesn’t the On years. with hold any year seasonality, XQ, I XQ of this

Bill Sperry

No.

I would anticipate think, typical we seasonality. Chris,

Christopher Glynn

Electrical on book-to-bill Okay. And second on quarter? anything

Dave Nord

think book-to-bill I were I of all mean, over quarter? one. our second the businesses In

the we So second quarter. in saw I strength think

Christopher Glynn

of announced I on Lighting, that the And tantamount are the stick? dumping. indications that’s Any couple of to dynamic product assumption groups the the making price early with quick a demographic ones. trade to all the headway majors place the versus offshores were seemingly And taken on by starting think increases that is working Okay. then that and accepted secondly,

Bill Sperry

Yes.

your let’s with question. start pricing So

it’s with maybe too think a And I and a we little things, and tell. than kind so dumping really what little too was Dave, we doing of have bit to but in to line early drag. expectations, but the a we I that’s of if concept think it’s point early little been not much – still on or I’m have better about sure, comment of a see And had not.

Dave Nord

reference that think I List impact on List on big X, products. particularly Lighting But X No. around is Bill made to

terms, evidence dumping, think in there least then at effectively, that one And that’s manufacturers par. be if that, on a would would cost cost-competitive, as U.S. because the with the areas advantage make a in there to could pricing competitive fact, associated so absolute referred there the then is of of, even I be that, more you it. But you could make

be to that that’s go that lot a on is where think a Chris. going. lot I seen So plays remains to that, that of but more how There’s out,

Christopher Glynn

and – this the here Obviously, take think have exceptional is to of pivot kind figured you does run The year. Okay. pause pretty for one backlog And growth or of Aclara. the as about pipeline How that to rates we a that more I to do suggesting otherwise? sneak kind in XXXX?

Dave Nord

and pipeline the we continue importantly, Well, pipeline is mean, of share pipeline. be certainly, billion a $X get talked significant pipeline. to we’ve solid. continues to fair and the still that I our qualified more $X backlog, And backlog billion that about

bodes think is it strong year-over-year well So continued for It improvement. magnitude of the July, I so. performance, only

Christopher Glynn

thank you. Okay

Dave Nord

Okay.

Operator

with Your Rich Fargo Michael next Richard Kwas question comes Securities. Wells from

Rich Kwas

that. On on Lighting, just back

stuff to China that, of lower inflow stock sourced residential you in So would of Asia done cost be production have a or terms the affected, that’s continent? what’s kind. from or be it hey, the like because of is imports percentage understanding What stuff Mexico where really made my versus about Is the do way on some, Chinese the is that would there in the commercial. think

Bill Sperry

Yes.

Our broadly coming supply percentage a for Lighting, China. chain from has lot in a for large speaking – residential,

the of of is Commercial some the manufacturing does, really and business, terms componentry in done Industrial the In and Mexico U.S. but

really want Rich, we of think. List its out so impact those analyzing try too to understand And keep many pieces, before to giving three, and I

Rich Kwas

would right, to be to utilize if in-house the if to could you it have bring back to fair back it of back capacity it that But you have think it bring in-house would bring have the stuff? here to some you that you continent, residential

Bill Sperry

Yes.

If you’re saying we’re lever, is available supply chain would something that’s that, we say realignment an yes. evaluating,

Rich Kwas

year? think was but it’s it and the context being so think in And half Okay. cost margin business bit then better, mean, we should Lighting I you price on little to exiting the All for the right. year- about like positive of the second legacy going the the sounds – how company, we on – of how should a be indicated about in entire Power, better first quarter over-year, how but Power?

Bill Sperry

Yes.

blue going and as for red price we Rich. that material costs. chart it traction with the shows the having that cost, fourth larger Power, up, to to second quarter Power, With half the catch the than showed So take where that’s price until really

quarter, the of to see flipping. third there’s within little cost bit So a that I in with headwind still you’ll be, even Electrical though still price think Power going the

Rich Kwas

of quarter quarter? by neutral we for then think and fourth should in So the third – negative so Power, it but

Bill Sperry

Yes.

Rich Kwas

Okay. tax had you’ve the to it six Is XX% for tax now, the And then on Bill, rate months still to one, year? reform? tax updated XX%? What’s rate. And last guide for you have look then, at

Bill Sperry

Yes.

more the think the in range first the we’ve now I barn our here. is half that in XX% – in feeling probably got

expectation but think takes, good a there be obviously, for XX% So us. will and puts I still is

Rich Kwas

And longer opportunity term, then bring thoughts to that on any down further?

Bill Sperry

of sort point keep XXX looking But We basis Yes. we’re happy opportunities. yes, the for with move. we’ll first

Rich Kwas

about that. something was in and say just quick, want just clear Lighting volume flat to Did revenue you Lighting. – Real said You Lighting Okay. price, I year-over-year?

Bill Sperry

Yes. The and negative. was was point one modestly price volume the positive

for basically had did sales we for you so Lighting, on side the us And but that. profit of better flat much

be I So better it’s where get for price that on we on think, constructive out not can to and most maxing instead the us equation, being volume focused

Rich Kwas

thanks. Okay

Operator

And your Tusa JPMorgan. with comes Steve question next from

Steve Tusa

Hey guys morning. good

Bill Sperry

Steve. morning Good

Steve Tusa

rest the think just as we about in here the year on cash seasonally it what happened the first the Anything So free half? flow. abnormal here or through of

Bill Sperry

Aclara some costs. in the Yes. the say, related tax the was reform outflows first I’d to half, first transaction paying really and some abnormality quarter

up, us this to but targets, $XXX burdened of to we the To say, And it feel, flow we’re get by by shaping a have sort – collecting feels year we was similarly the it you maybe down $XX flow of the of very of getting receivables so the get where I’d operating we and a quarter CapEx. managing are intention of have cut so million strong onetimers. of were second that back and those sales is seasonally strong at are, us, cash quarter, and the important inventories in end so we seasonality around talking it to target-wise supported end there. Steve. But of lot the by after of QX, when XXX-ish cash or peak for and for So million in

Steve Tusa

just time. EPG. about than the simple, seasonal guess, $XXX back you talked I the right and using Am million math amount of higher gets differently the me math a guess at envelope everybody kind doing certain that? So doing I’m math on I it’s But like of just I does of

Bill Sperry

I Yes so. think

Steve Tusa

for in Is somewhere this year? the to right $X.XX-ish that $XXX range. getting I’m million million about

Dave Nord

I think that’s right, Steve.

right. think I that’s

Steve Tusa

something does on XXX good just side, And kind in is actually then mean what particular the Is Plus lastly plus, happening through that’s specifically coming of on just that pent- I here, T&D that? to to hear. well some That’s anything up way guess. driving and the pipeline there? of this

Bill Sperry

Yes.

side, on which business think us. these medium-sized and for good projects, is really small I the transmission

of some mile kind O&M But day is word and customers weather. – seems well you X% a kind of more news. is doing hardening think for kind system for know, decent be it I on so is to T&D, very it’s the D the us of supported strengthen very side, our that’s lot growing by good I much of last has healthy that. But up set to brand organic there of be some been to networks. as those think And our to a construction the support

Steve Tusa

Yes looking cash and flow absolutely thanks. great forward,

Operator

Partners. And your Research from Sprague Vertical next question with Jeffrey comes

Jeffrey Sprague

Good morning.

on that up you kind kind like nicely, based seems right I the grow through the those it D, feel you some Is seeing assuming power work obviously, normal storm comps pipeline. getting you’re hurricane do picking the just just mean and weather about good can T& done. what How that season, a correct? like? of you in benefiting and you’re on from you’re saying of comps think Just

Bill Sperry

volume it. looking analyzing last comps some We’ll way pent-up think through intended and some pun some there’s on power We’ll power we’re through Yes. but I – the year. headwind backlog volume but some power the on is there big you’re last of comps. right, those assumed big analyzing I the looking you that it there, no but But backlog through there But do the headwind would comps you’re right, demand, way same – based at from looking certainly, year. we’re it. from some is way saying and based you’re we’re certainly, at at

Jeffrey Sprague

more guess, were resisting, you’re I suggesting they’re Electrical to still you think way on And the for has also I of to make And kind there of get it example, overcome Or Power, I would and your but looking these that of in forward. that. we’re resistance CapEx was into prices like in to businesses. finding customer sort just anything perhaps market, seeing easier price than investments OpEx, a mean, going something more were that you changed

Dave Nord

No.

think material quarter more I headwind the so being affecting commonplace. first became the and of participants – the one things, broad-based all Jeff, cost the from certainly in the is just it industry, across

the Gerben then us, people other easier, you kill, was until of But we’re and from that’s felt think all thought of it of right. I And been who it to might reform the they had and days But – all talked I headwinds their able little so is cost but ideas. as I side, more to price hit. think a get material I that To would been and I some some on, industry. on, reality it. weeks tax okay. I’m interesting resistance, little cost I this be I out bit hold of these kinds is then, for call for utility has about We wanting this. share, all benefit ago. think, XX two of cautious out gain demand true in all all early that we mean, a early the certainly think the think sudden – the participants it’s it and there lasted there, headwind And about were because say reality there

So...

Bill Sperry

Right.

Jeffrey Sprague

could you’re And margin year-over-year or on elaborate perhaps impressive a in in terms sequential run Lighting that of rating of or the Right. you improvement in what little bit how meant improvement execution business? kind

Bill Sperry

Yes.

some And that service, benefited around of with operating been were from as what lot caught we’re our very performance, itself a us cost sort with and sustainable have certainly Just spending at up operating to spending inefficiencies they predictable they et we’re and – time, cetera. restructuring now of last kind were cost year, that that’s this as rates remediated, those and feels actions. all corrected dealing

back. was So welcome and come very attractive in margin Lighting the expansion to

Jeffrey Sprague

underlying the for And then actual margin itself. one at me, just one just performance Aclara last

these – Just price all is everything how of mix pick kind and trying Aclara and margin actually here? costs underlying playing to apart execution issues

Bill Sperry

Yes.

terms seasonality. performance. anticipate Aclara, similar in Steve’s namely, we quarter talking very second on – third better we’ll to about they half were have margin Hubbell of seasonality So question and strong we

that year. sort We’re the they’re the of anticipating, mid-teens for EBITDA and the year, for of towards doing

second the interest earnings net that share, on $X.XX OP. added the us $X.XX. For of we quarter, Aclara, per that And contributed of $X.XX that the they were took double helping digits of Jeff, we at expense with of

contributor Power’s, good lower but margins a earnings. than are their So to our growth and our

Jeffrey Sprague

you. Thank Great.

Operator

next your Wolfe Coe comes with Nigel question And Research. from

Nigel Coe

Thanks, morning. good

question of to wanted to just on kind Aclara like there. So Jeff’s on latch

So growth $X.XX if I Aclara. the came answer of the from understood EPS correctly,

$X.XX the guidance. year in full you’ve I got think

more number? talk maybe full that confident unchanged is for from So that quarter, which $X.XX about much last the how just $X.XX about you feel about in you just feel year. that How

Bill Sperry

Yes.

our now think and operating got under that I we’ve belt, Nigel, five really months feels better.

talked be I So I have picky, I’d the being given strength, margin year. good about to a that That’s David If are. good what them, for to been they’ll underlying that one for mentioned, rather of we’ve from us perspective. a think the meters. comps about real volumes were skewed feel volume their skewed, how as drivers But give we

Nigel Coe

the overall And organic in the was Okay. for quarter? Aclara growth what

Bill Sperry

didn’t it’s Well, acquisition the ownership, own but so have XX% we – anything compared our it contributing for prior they that growth. of we year, to not double-digit don’t incremental to growth had quarter. But in last it,

Nigel Coe

Right. Right.

And Great. and industrial by it the low obviously, point. then guidance for Okay. of year your took up year switching end to Industrial one full

second think high quarter. for for the growth the – said you single-digit I Industrial for

bit did of had that a deceleration a sense little a giveback, of I – the lot that of a think of in mean little Is bit of a accomplishment, you that? would implies lead it really year. back I So conservatism? half to the quite

Bill Sperry

single-digit high comment the – to mid was The Sorry. heavy industrial.

light industrial, the total of higher which portion smaller. is a So is industrial,

think we quarter was XXXX, percentage. this it it’s watch solid even is small of nice of industrial So though performing. XXXX, recovery of industrial out that first piece that, is But how XXXX margin-rich I heavy kind do so for a for us, us, a

very pleased it’s doing to see we’re So it doing. what

Nigel Coe

example, weakness you’d possible on And out light Okay. I industrial ask in And weakness and question a just the any that we just food some put weakness one quick one industrial. bucket? quick – possible Any in light there? that have for beverage,

Bill Sperry

seeing that. We’ve been not

So we cross-section it’s fine just broad us have from I’d there, and I think – growing but a our perspective. say pretty for been

Nigel Coe

Okay. Thanks lot. a

Operator

And Osha JMP your final from with question comes Joseph Securities.

Joseph Osha

Hey, Maria, good morning.

understand Aclara, down a to a drill bit especially implied good help am how that hearing rate sort I to business, million rate that certain run components, on side? inorganic from I’m imply of especially hard be that me at passive the other to last a by Can Electrical wondering should than you If bigger that a talked thinking the little companies year-on-year really, And that might on $XXX get. are be about? would it then, metering really little what secondly, of components, the I about to again, deal couple Thanks. look And impacting what’s maybe Just run business number, that you this is December. bit. appear I

Bill Sperry

Yes.

better double-digit So get million $XXX starting this or with top growth, on line, doing last the you year million should year. $XXX

So that’s straightforward.

out sure. more it’s on we impacting side, made we lengthening sure. managing in seen for And the component thing same demand components side, it’s important, supply forecasting on has But all and inventory have the it’s anticipation of made for think lead important vendor the become I are skills. time times, important lead seeing and relations those

Joseph Osha

Okay.

is the million so the year business of half the $XXX second or that my the imply Aclara? would in then, weakened And that math seasonally off on

Bill Sperry

Yes.

We’re third quarter. anticipating a strong

math check offline. have the to So not It’s we’ll

Maria Lee

up. follow can We

Joseph Osha

very thanks Alright, much.

Operator

final it back comments. Lee Ms. And over turn to to Maria closing like now I’d any for

Maria Lee

and available questions. everyone, be Thanks, the right. for All for IR us joining team will

Operator

you. call. does Thank today’s That conclude

disconnect. You may now

Hubbell (HUBB) 24 Jul 182018 Q2 Earnings call transcript