HUBB - Earnings call transcript Q3 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Ella, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hubbell Third Quarter 2018 Results Call. [Operator Instructions] Thank you. Maria Lee, you may begin your conference.

Maria Lee

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

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

the over turn call Dave. to Now let me

Dave Nord

for Thanks, let us touch the Maria. could just highlights everybody, details. a then quarter and right. the I Thanks, on into today. few from get joining Bill All

release, deliver term. us, growth of our we quarter in it ability feel that from another see - and earnings, for very generation. in growth over can obviously, cash investors We importantly, very think to about and market press confident You results long position flow was their our strong for differentiated in confident the performance strong sales,

I of Page think if quarter. X, I start couple within highlights on the just a

news. U.S., had with running rate XX% the we all from a as principally the Aclara. we’ve saw have did reform a little good obviously a arrows, green year. have adjustment the been and which organic, end or growth markets good. in end end. XX% really quarter, us growing outlook market We X% obviously, be tax continues First, the had That's the all tax certainly been saying under rate our in U.S. all to That's And quarter are lower acquisitions. at for than high the year, the sales We benefit

tax lower from more any rates generate competitive. from source You and particularly we earnings can making know if us

traction. the certainly key traction, is our element actions I pricing all been and around the little quarter year they actions. we little pricing than quarter since pricing a continue anticipated think and actually our a third is through We've quarter that had Bill through gaining our to I that better first are the later. ago. will go talking about think gain But a

So that’s good the news.

because in - anybody the drivers, - attributable nine and who's if our transportation that shortage Obviously, On that line obviously those in months any pressures tariffs actually not And you're know minimum activity to least we're side, to particularly free expectations. costs, cost. that in cash capital our of recover are are and is mean as drag acquisition, throughout trucks we’re particularly wage puts we such margins of margins, I and to-date inventory. The some our we’re we on less working And positive try to the I outcome cash headwinds the operations, to just and objective. deliver the tariff there’s so talk the the than the of that address don't also having management, were getting highlight. around struggling shortage to to talk that to very if results market at with the be that result objective that and from labor flip that, the market unique talked to And recover that's those there’s on areas even well I quarter, on some flow, in is seeing - cover and Aclara’s can’t for but dollar-for-dollar, our with can because tariff try shortages which growth post our all and our not not is costs. free the the situation, anybody that inflationary that's important some more focus in core profit truly pressure the higher us inflation you our costs. working accretive continue An has a delivering specifically performance, But again, about as on earnings. to around in for that, that, implementing significant year, strong and a kind frustrating. of flow. generating we're acquisition We've

result to and the gives that guidance of year. all narrow of raise us ability So, the the our for

second We're that, that's that, the some try did but The is of what increases. nature Certainly forecast to year. after modest we predicted But again, it news we up. moving The that at different job beginning least from our is and quarter. at that done second doing of time the and come the have the we've tax navigate composition good things benefits. you of up

on take those all the of strong positive think overcoming we're - markets that challenges. to working I and We’re challenges, leads not results, without - of working we’re we're and advantage on but pricing, working

turn to to I'll then more Bill? go bit. the Bill the through me and results it come and back outlook let detail, a So, little we'll talk over in a about

Bill Sperry

Thanks, for everybody. Good Okay. Dave. morning, Thanks joining.

start which Page a end what the cost, Strong constructive point we've nice backdrop And of markets X again, exposed on price just slides, there. hopefully capital for similar to very had to highlighted to, Dave first of has. allocation. I from a now. the is I'm couple I'm that demands, everybody our constructive of going we’re cash last demand, that quarters list on strong there, the and managing think strong flow, items and

supported Starting seeing see sales, the in healthy think information. in we seeing markets growing but the a through range. architectural - data we’re the quarter very that by are up billing still start to can non-res, good X% X% XX% You end with

a and that. grew lot quarter, than of with year still the comps Electrical distribution. storm T&D, the But is volume facing through still strong. was last distribution through transmission tough So, the non-res stronger it

as industrial, and condition. good The healthy So, feels healthy very T&D in we're very that and light both heavy, to us. viewing

industrial. there for industrial index, got it’s You've support up production good manufacturing a

certainly and see On both oil we gas as positive. the halves side,

gas strong saw I us of is the still CapEx for the upstream quarter in the what attention builders. in rates had oil here strong The the than side to in getting still constructive. saw gas markets think for the But dynamics used revenue be repricing lately, we the oil. quarter on lot performance sure. a Obviously, for quarter, favorable, in rising we we for in is stronger But the the what resi. stock a the

profitability. price range kind and our I in quite that price here. markets dragged talk about year X% Starting components we into disaggregate of gross you switch The about increase XX%. expected minute. to X, and profit on line altogether, are but So, for simplify more basis XX.X% in the about GDP dollar's Margins points you million. to down The profit detail up see two operating the to GDP, just by XX cost, XX% efficient, end so being outgrowing in F&A backdrop. And being we'll a of to our cost want a $XXX more constructive

show On as So our efficient from Page to operating getting leveraging we're those profit. there we're together higher more X, scale. benefiting we put volume and

were per XX% the XX%. you big as you price quarter, down saw There cost, a income an side, earnings driven were commented, we're Got drivers, increase tax year. on You $X.XX. in and, what full XX% last we million, by over to to under this lower see the range. higher The Last And essentially. XX% one share The increase, two just $XXX similar gross, in in here see improvement expect year the is - be low-XXs. Dave year, rates. to the we margin

the low discrete items particularly from inside was quarter quarter. benefited the So, some and

some talk strong well two at lower start segments the business, including contributors Sales that to $XXX X, growing and performance, million. various about are quite the lines X%, our with spectrum. we'll We now, Electrical the to So a that, industrial of end gas product their up exposed and the growth, Page including segment. on of I'll saw

by piece, the more resi single-digits Our lighting to contributing grew that was business the than low that C&I. skewed

the is growing, impressed spending which and that's be growing income you to a customers. lost the resulting storm a think more transmission we million. higher offsets to that $XX quite is of utility the the XX% for year acquisition, XX% for margin on the in good nice up margins. $XXX drags in lot by most there business the you continue where on from And Texas. us, income had And comps strong. sales we're teens. from see $XX Aclara, material coming of of that cost you'll performing volume the OP, than extra X% our area we as operating to Rico news fees see good low recent shouldn't an growth, distribution improvement on volumes operating here contribute in And coming and but the from Power again, at to you organic million, see coming some of the impacted a XX points, because performance the And a side, tariffs. expand expansion Obviously, of coming from had increase. being margins with But lifts see and X% I Puerto growth tough growth storms last in and growing where our story price lighting Page they it still by segment we sign basis and to Aclara see there healthy million that X,

years drags of to still, drag and for obviously versus about has So, topic performance. margin headwind wanted just in important cost that's expected material the there see as a for been year, We Power. systems. prior very down material cost. for price to felt price talk margin continuing good but terms growth power the our We you and But

were July two quarter, starting second EPG in that from cost, during and then shared again And our so, price there at discussing essentially takeaways analysis. analysis and we

to how and use was lag show immediate derivatives offset. the between It’s model effect we and business inflation than recover model someone experience that how inflation. we first and where get So, price has when a different our a might

lag we We and illustrated have lag. that a

The quarter, with that we we price experiencing. we second cost has message realized our that share is to we third were in on And all. the that show you up the inflation caught

had inflation. lines we quarter, business predict to Tariffs different were despite that analysis, of were In our - price specifically in the cost too matched. for the excluded actually was the away rest experiencing our third that us and they still uncertain tariffs. So, then than where and lighting had lighting price given

the into done to and – overall still the we that on mission, gives better is we've this what we because impact we and now we've lighting that that picture did now, included you of think a that done shown insight we've So, performance. kind our tariffs margin hit and because

you quarter. those can quarter that had that see third drag still we catch some up the the So, from and effects two fourth in

is the all So, businesses. across our us of for price story

that we during and Some Many to the products of our net get about from of battle whole the inflation business of we're way. year. and thinking are you price of questions have And against it price. inflation lines against we're increased that price trying all time portfolio using tariffs our to multiple

Some of very those been have significant. increases

For amounts to of example, if you're exposed significant steel.

continuing is us an a to so to year-end, through is traction there's Page back blue of free a margins. think We end start year by balance highlighted the cash moderate the get in that as that continues. Dave you bars to on picture those that flow accelerate on Want can our and the XX. see exceeding. So us as price, on strength costs touch important to Dave model business this described story to driving

a higher it’s of but cash we've inventory in the most of cash over driven You well capital the where by an performance effective very levels. doubling over the flow XX% $XXX and period flow million. efficiency, the working can those see increase been notably amount, in to managing quarter, of for free year-to-date area The income, at

spending our increased CapEx we've importantly this during time. think I

fluctuation think was forms of show sacrificing We've We've I to investing going in been the of that of automation free showing achieve We to charges more caused interest a non-cash a and acquisition as you result to quite we and to our not also And taken incur think important. going are has we've amortization are way. on productivity we've taxes other us also expense invest flow. bit cash EBITDA. that you other got to quite our Page So which XX. in continued

balance ask that all sheet dynamics. on with given showing keep Maria So, But feel at we rate is comment cash the in to that front wanted those nice to you just EBITDA variety, I flow important XX% some of growing you. that to of

Maria Lee

Sure.

you to we columns, year-end. with column return just fourth to year in off of respect expect stock of structure, repatriation moving heard this our overseas March cash. and do week, XXst board to page Aclara enabled $XXX we much current And two and our total highlight So, quarter. period acquisition far increased I’m the back total prior priorities have added in complement during paying of on our million the investing Bill capital see our this outstanding. that We the the show last XXXX and high now acquisitions how this international million has cash debt repurchased typically from XXXX talk in a more We and happened time, with we broadly, in same, shares. and investing do you third back portfolio. cash The projects, We have and More $XX capital remain since strong billion XX. about, $X.X delivery to but allocation March so to Page can activity dividends, some the buying debt may generation more which expect capital seen in paid

cash, allocation Our We ended of third the strategy. which supports approximately this with held $XXX balance quarter of the States. United capital XX% was sheet outside of million

commercial about We million $XXX paper of had also outstanding.

paper Our tranches low our and million of all senior have to a facility we credit Xs. fully mid And is notes have rates in available. four the that commercial $XXX backs long-term attracted program

a healthy balance deployment our will a I hand strong With capital it capable have talk and to to sheet, to that, we Dave supporting outlook. summarize, of So, the priorities. about

Dave Nord

Thanks. Okay.

So, bit let’s just the about talk a of year. little rest this

little growth on what No prior consistently We're end-markets that continue year market seen Page to X%. versus our running of year. year-to-date. with this Overall all we've X% above our XX. bit Markets a to on change First, outlook. grow

finish us, to year. From I think we'll overall year. year, to largely of growth nice for the still, our leading the little years, a settle But might back a full sales. than the compared as little number to higher sales of range. translates Aclara XX% up to bit that we That's very a to internally, prior XX, we think sales for it a XX% Page higher an on turning finish into, performance prior growth

industry midpoint secondarily going impact other intent with of obviously, conversation headwind mentioned, see partners January. fully as becomes we're range, had for inflationary those. all of around the EPS and we’re the concern that less takes talked raising have essentially recently we $X.XX when increased channel so start think where you've As the $X.XX spent the and of quarter, the navigate that favorability with and of could price, prior. seen escalator - put probably work tariffs, set charts, we're as is our some I’ve versus quarter. or half top is $X.XX we I tariffs place, pressures in you and mentioned tax will of to mitigating talked $X.XX it which in that the about. But tariffs it, that XX% of you challenging. more We always earlier, - to tightening to and XX% scenario certainly rest pass And a tariffs as the the new the We I've the And through our the in time dialing of in cost the through to actively we've now about price along well. fourth grade, quarter Bill increases

not at aggressive making we're sell we're to same Because in taking. going the tariffs at products, have money not a we it, certain that it. Now XX% very action at you're time,

it. So, you've And we're not I got to alone. know recover

price affects know recovery where on demand I So But price are and getting that is focused aggressively we of theme ultimately a is wildcard. that to there the going - it some pushing be to Whether is affects here we degree. a can. – and

found third in the our realized, in the - around really nature we've to cases, through. that sell prices we even requires some of And get being partners flow have that then But particularly the it to of here, with more chart, joint than it getting just headwind that, free the customer through. base our our think continue automatic. biggest situations waterfall on value some as not proposition. prices of the the lower up operation help some cash In takes and quarter some the expect from changes when helps is strength a And I update. those tax successful products, done we mentioned, and of in income. end I quality in we've that so. of tax service benefit effort. are It’s regular XX the our those getting the price Page been for And rate, levels, tariffs channel putting really lastly net The - greater column. to is

and pie the the is now and end-markets after Electrical But year. see a it's to a And again, a slice guidance to view growing of why the of point. this our this strong start moderation turn right this is least as industrial. to we has Base bigger at all early. gas has T&D don't we X% growth chart, We with which case that little we once versus X% included That's Note certainly provide X% the at at let's residential, slight bit pie now see still But obviously, oil point. market moderation this this into in So, XXXX. X% now. see Aclara earnings year. Overall, point. you

for - EPS you’ll talk year. and page, considerations about So if we we turn next the our

in it. how looking broad guidance don't until But January. framework so, we we're just annual give at a release earnings And we of

fall maybe be grow for again, in mid-single-digit a nice actions year volume commodity as going said, different, tailwind the get side come. or next already it's for commodity on price more on to the costs as we’re real the any long pushing hang solidly end-markets and tailwind range. if we've us it downward. side, with next But typically cost but that I should provide us. should implemented are As them for out to low more to a those whether And can, on nice tariff Price the with to We be shouldn't to even continue. basis turn we the year will or

on actions. And that from you continue We some are I benefiting some action. opportunity the of prior execute that with on of ongoing things put being and to the restructuring meet know our the new initiatives, Operations of Huppertz, restructuring productivity sense VP Global of as of got a had to board our Susan part

side. more to realized certainly a we'll so cost increases the the exceed Inflation, continue but labor But XX% So, and we this driving that range. year. costs next of continue than And more we through be can't and to XX% to things expect costs recent continue third try Obviously, parts able that price tariffs to to confidence be general Obviously, productivity realize. we're be more mentioned, all we normalize tariff in if lot driving in of that as work there, have have next cost onetime the year. little going to Done to a on being the increases in Typically, to other years tax, to yet that. Bill moving drive still wildcard. productivity, areas may in quarter, like for neutral into transportation with but to we better year on is up end likely some we the saw those productivity. we're benefit particularly it offset be a

year. we're of have get to continue a lot good management, a toward all to we're to reiterating in these And a to a that we've but got So, That's cost out lot there, do going GAAP next growth we of where $X.XX XXXX. said, path do. target attractive a lot with actions take, that's EPS what of give I’m earnings now. but to commitment previously laid range, not Certainly, what That's we a work a do. productivity by of done. of of lot a to we going comfortable price, lot

put I getting to so solidly think the path us our on XXXX will And objectives. XXXX results to

better. to that with environment We with just much tougher. to always not at to little hoping pricing a to We never a of and we're will acceptance, making flexibility with least the near tariff wrap having that situation, rather deal – dealing term. a results. what the provide certainly would in So, like magnitude be the would them pleased bit up, like them of but It's is easy, be everyone

questions. we our We've So, forward. in forward will stuff. the got confident this And through better them and results work look challenges welcome ability navigate to to going the

could to open Q&A. if we So, up

Operator

comes [Operator the of Instructions] Glynn. from Christopher Our first question line

Your open. line is

Christopher Glynn

pressures you increases hits the called seemingly lighting industry tandem among price price cooperation? dynamic the of pricing announced C&I again. out So, are the but in in of do the the you broader road this in price in broad pressures expect here There existing guys increases announced much How majors. rubber the terms

Dave Nord

I positive. having not to to starting discipline. we're reflective just in think broader for, And think of increases and been things starting we're up Chris, as to seen benefits margin. sell first, a seen the I have industry as seen to certainly pressures that. in been that's the would we've I where And the to I elements, it's we've some We’ve some I more think more that in turn point. price we've you've I I think lessened going a And that certainly, say realize starting it to It’s - disciplined, mentioned, stick not pockets give going think Well, pockets. able broader that and price of actually

some that's signs. sign It's still we've going positive early, So, seen I think forward. I a positive hope but

Christopher Glynn

gathering line electrical down probably year-over-year. and then implied all fourth your be fourth a And that I'm the little your we column triangulate, to bit at kind guidance, for of margins penal quarter there's look quarter as would obviously items but

in kind fourth that you why your cost the price be the might of best year of if relationship have quarter. wondering Just

Maria Lee

Sure, yes.

be on the I margins. you're to So, there pressure potentially electrical that think could right identify some

I the material think it price will have headwind. less of

some on dynamics, that I However, freight, things labor, you Dave the mentioned nature. cost know, of think some inflation of

expect to due higher We to a trends. bit that those be

drag. the would benefit that we that would So, from material be get offsetting price lower

Christopher Glynn

labor Slide of Is XX? bars and the part on not freight

Maria Lee

of No. it. They’re outside

So the price. are specifically commodities bars so material cost, and

And cost so cost - our the side increases increases the that what would into that or we that go bucket stuff. and and inflation productivity freight have cost wage

Christopher Glynn

And XXXX we to then Aclara, for with driven, otherwise your should ownership? organic more how for so orders year good of starting think incremental and bridge year, EBIT it's margin really your about project another you if into the two get the Aclara? for would strong characterize mix profile how pipeline profile support Or

Bill Sperry

Yes.

think in smart first grid is ownership the in year products of high seen far I suite is of our so and what service we've Aclara demand.

grid part answering question. - We've the is for it margins help that January, right in I more very be as Our there your that. question we our the seen during is good a explicit demand product think improved so now, the again, the growth very see But good think very, important think Dave XXXX. we're about we'll ownership. first very kind within that customers said, guidance need And your I is it's as of us give in and that should pleased smart to I of

Operator

of Kwas. line the Rich Our comes question from next

open. line is Your

Rich Kwas

a us assuming take basis? on price then XX%, explicit in just going impact. the to multiple $X.XX QX And you quarterly in goes But January to you’re it set Can negative So, impact is on then of rate tariffs? that level then rate the QX. an some as get the we X, guys if

with maybe - this still as there's net-net, the the think do QX we impact? mean, rate. about in trying the curve we increase how we I model in to are So, the behind how

Maria Lee

had being And so, in about, and of a if we $X.XX each QX just and QX. List up, net back we headwind X talked or of nickel X

but larger we with other it number cost the and still So, offset that, is and price that's gross initiatives. true, productivity than

So, is that quarter, the that's X contemplates, XX% January fourth bumps it what List get current you increase which up When that's the you dime and another now List XX% year. in for tariff. and for to guide the cost add where that is a of the X, When as X. of result in will next that X,

XX%. the is So, up for $X.XX a

year So, cost it on List X. would next based be a higher

impact obviously, in also, of X the and this have X that have didn't wrap half the You'd List around first we of year.

So, to I think now. start going point, would I see after after it in to your productivity the going we'll we're measures price, expect that putting But the easier now. on will up year. compares be a of already benefits. we're a to get the starting that go are step mitigate that so place, tariffs we as through the We're But QX bit there in we

Rich Kwas

so obviously. know it’s you mean, go into there our pretty what's X/X, on explicit the that effect to knowledge with I going

push way it, start matching be think you able seem Is to it? be But mean, about there’s mean, I knows right? pretty sometime the a it during know right? - I that So, concern quickly to QX, their everybody able would around demand like you’d with right impact. to should So, QX, up, within price about I

Bill Sperry

important to it. about That's the think mean, that There's right question. no to a big way I it's it's number. recognize

I've don't to be all as be can if of up. to insignificant. cost. not can get want We're what normal to the all of so in through is. for new market. in hasn't a bit academic and That’s point we all not don't Trying hopeful been. it’s been that And you always the still up, that do saying, XX% moderation, math end because to-date, as back we pricing, with increases. and a catch there's And of even increases to when off little in at particularly coming up modest you're a that but content, want the you've working when big surprised. very years material be XX%, are all with of product X% low XX% inflation but sudden some we going relative been And And We it's coming there's to it playing we

So, that's an element important so.

Rich Kwas

seem earlier within I I And air. mean, is power have more XXX each mean, electrical But on is on of as you would segments, impact to impacted. tariffs? from think then to it strictly know I way just the about a there the like the segments relates in

Dave Nord

I right. and you're think the way -

had I Power a on indirect using where impact they're lot think Rich, very of heavily XXX, steel. an

Power As will hardware basic X think List about the impacts impact receptacles Systems. residential I from us and on the some there's on But biggest you on plugs lighting. also parts and think be of

So it'll affect other areas as well.

Rich Kwas

legacy Power. is still behind on that. to Power? guide fourth I Legacy And on positive. time you a relates the bit that on like – understand then get within your quarter cost then the in last get the first and one cost there, seems quarter, you're It we getting that the latest Is What's to within by parity because price price curve this

Dave Nord

Yes.

So price get to continue continue have inflation. to Legacy and Power, you're right. they They

it very the So they're impressively from they're down squeezing it. progressing way behind it's squeezing, being

And so, up. be little still we're behind. the as being we probably But starting just to able end bit year, a they’ll next catch year

Operator

Tusa. Our comes next from the question of Steve line

Your open. line is

Steve Tusa

tariffs? what that the and kind commentary we've on guidance XXXX of kind is seen The less these mean, free flow just much there, from relevant now given of I cash

Dave Nord

with I’m mean challenging the relevant that by more it’s certainly sure what not you - tariffs. less

a It pre-tariffs. I year certainly than still we earlier when have objective will spoke there. our in different path think that’s and be a work get to the to path

in it's one environment. going get still the cards? And be the will there. mean about pricing wildcard a how So, the does certainly question to entire It's that we're

that offset not as obviously exist productivity the there. We’re to we're more paths working develop in likes. and to sourcing changing I shortfall any including and strategies other said, alone will price But

wouldn't I say mind relevant objectives. – our So, and still in it's our in it’s

Bill Sperry

price catching right? just I benefit tariffs, around, out, having it in it's So, flattens different ways, price wraps it the even get once for as up. Steve comes of the you're think get though as you that to that you then

comes we're it at as how So, looking say. not That’s would smoothly, I in it.

Steve Tusa

one. other then And one

have through, was the by of on being harsh sure the can taken downturn in has this your your market I'm seems what on I of Just too little try back or the that And investors whether guys a harsh mean, It and just not hazardous issues tariffs I thing every guys just in operating or like came with the the have just macro process you business. blindsided visibility kind a that's and improve of coming the and kind dashboard. front? the it Or am communications step that seems you and your are more and stuff see oil that certain stock it whether and any like dashboard has at kind of you the that? time stuff. or looked kind

Bill Sperry

think you're to Well, we don't that did. talking did rest I any stocks the were exposed about, oil I same surprise. But if the market, I’d oil of say think than we had see the think of other the downturn better the degree I

up. or I think trying transparent we've be you to and this as we takes for so catch way with how about to the managed it quarter been price it tariffs we've

that think stuff. we those So, seeing are processes that

- with that we've of taken reacted reacting we feel restructuring are oil I to the of about big the good a kind that. cost out And plan. we think million $XXX downturn We

got the lighting Some that. And take of stabilized. of margin used restructuring out cost challenges now to much we've that where business to expanding and is the point, it more Steve, business to

you now And Dave as the first communicate I normal, all. well. and so managing new quarter. think inflation we you in think, is tariffs, since, We've been that price And was We're trying tracking to that with I the we're agree saying. doing with

And so enough. guys is transparent feel hopefully the communication you

Dave Nord

add - against price. Or being matter as can so is be better as there And evaluating of so the that on continually trying the something transparent one to our that’s trying minimize we things well and not mean, against and that's as as true market understood? think be constantly things And own I can we reaction are I performance as sure evaluate we’re surprises I to communication. operations that avoided. our always looking we the we're understanding, or a that make the that. obviously, we’re to Steve, certainly, would

us, say, it's managing wasn’t comes always and that of it But stuff ball it’s that hope any know those that can we it that, and hard if crystal your that my to because something entire surprised we up we challenge what we you yet, us. that and we’ve than on else's we're input only things put on oil working know. surprises market, gas, the on has we there's the not mentioned, at and… conscious and anybody welcome And very better unique get out constantly tariffs. we're Bill working in say. better to of and the any As that's And do But better it's things and

Steve Tusa

which stock well off on year confusion they price and just calibrating of half appropriately. kind as the there guess, of of I around down cost the first where levels, CapEx coming people weren't are were some this went dramatically

the than the a So, of the The perhaps construct. oil lot But But more just Thanks I'll that. it's to thing. just volatile gas kind its it's to your related fair at point and and than for totally little color. be. specific more a stock volatility be seems it just for it has portfolio leave

Operator

from comes Jeffrey question line next Our of the Sprague.

is line Your open.

Jeffrey Sprague

at might like I headwinds, of kind of kind of here? disposal But of sense question some very market, don't that to a you more you've opportunity mentioned the the might your joining large swiftly I on kind much want want quite of take healthy got Susan expect seem rapid kind environment expect in should more is it in why clear do where a have these more isn't issues would we some move talking footprint greater or firm, an you it to we to shouldn't and know about? you some on of other rapidly. urgency this of Huppertz move seize what even productivity and she's It why to

Dave Nord

a and to always mean, is. continue execute expect. It's sure market right. level And comes the the I it the absolutely to effectively we you're provide to of that comment, they ability Right. fair to service that can to make there back

a case, always the time, been is hasn't and misstep know, us that for and you've Jeff, more As term. long long you meaningful followed that and the of price

presumably want in her can around make to she’s later. heard in make that's we are these with that's So, of things. than what doubt that disciplined things. to we identifying and sooner you that But no discussions your things we that those one We're that do sure just the rallying that there's sure

Jeffrey Sprague

in then, back there color little does was about bit that tariffs, a severe And impact thought. were additional that that sound Perhaps don’t thinking. you there more X there lighting just the actually List it on is particular, to you List like first know ever than I any for maybe there than dime than you’re bigger explicit impact provide you Is a us? X. could the

Dave Nord

X impact talked only that No. I third in talking List when were we just and fourth X. the really nickel about think we quarter, and the about

just now is dime the of So that. quantification the

think, the chain, business, industry is for basically the I regulating importantly with right. supply structured similar

disadvantages So or to there's terms advantages tariffs. competitive of due not in costing

so underlying And that same saying industry to the popping part will But things I while new think all. of up react Jeff, we the there's at believe we're way. not

Jeffrey Sprague

then just And finally me. for

slowdown QX. what to QX? a It’s about Are some unclear business parts you you're Just your in little on in picture. me where… saying expecting And demand measurable the of some

Dave Nord

No measurable.

increases any demand we a volatility order that. indications create advance that - bit underlying pockets seen weakness advance price tariffs in activity haven't seen for potential year. the little But any seen - at of will of of next some is of point. haven't or any in of this in that's think thing I We've we

Jeffrey Sprague

not or would jammed advance order How you old let with to tariffs. price something planning take months you’re that? people get when going to are six you’re I on assume in going

Dave Nord

that I basis through have and that’s blankets put a that’s increases mean, in are on with - sometimes on common annual minimal we because thing catalog. on even the - place, No. Jeff, price that fairly mechanisms an

not No, to around gates going there's that. allow So, we're that.

Operator

from Joseph Osha. comes the of line question next Our

is line Your open.

Joseph Osha

just have discreets that's the you and want very curious a talk on question Jeff asked very, on and business. how components about I little business your might passive about been did I'm lighting bit on had to my chain. supply also tight. impacting which Aclara And

Dave Nord

manage think relationships Yes. components with observed I I supply we've that tightness, ordering mean, trying been our of our the to and accordingly. we've chain in

lead times But see you Joe. something potentially affecting So, can it and whatnot, we're that I that think it's navigating.

Joseph Osha

that maybe loosens there's ability feel and to some you Are air expedite paying freight additional at find some there and Do forth? margin to you to so up? if this that point there

Dave Nord

there I the out that constraint said, a in is there as margin you're But extra is chain I'm not to Yes, it's there. that - sure that. comes - right that’s supply from point that

Joseph Osha

Thank final it and of the question very, does you. tight? have Okay. be there that seen part you to of any loosening And signs very or continue just

Dave Nord

Yes, navigating. we're and part I think of just it’s of what persisting the backdrop

Operator

the line Our Pokrzywinski. of from comes next question Josh

open. is line Your

Josh Pokrzywinski

of you is front Just on kind on the a approach market. of scale I the what we've large the you and distributor think of because channel where question now seen both inventory distributor? have restock right kind for sense depending and of that of kind Dave, typical evidence how your seen on destocking what is

Dave Nord

I think pretty overall, balanced. they're they're

been I have think lean. running they

downs. that and occurring lower up But loading closely ups their might I had They've right. prices. You’re be as monitoring we any mentioned before, are at

monitoring. a that - early I year. mean, big any that's there one of but examples seen rundown I we're think we're haven't certainly in We the that were

it's I'd restocking seen, there what was balanced I pretty midyear. say some we've now. right think from

Josh Pokrzywinski

pre-buy be just in be clear, your element that to no upside. there's of If kind were would volume happen, guidance? XQ And to that

Dave Nord

nothing that. - There's that, to I'm obviously that’s it. upside they’re correct. not certainly there, more did meaningfully be but we occur would because won't That's - expecting we not volume pre-buy manage If - anticipate, it would in look and that's we that than where

Josh Pokrzywinski

to that broadly, be time. zero-sum game in size your be today, tariff in to point tariff we you over pie business future that stand been being could a you the today? escalate of the That’s have kind X tariff some this of total could what that it of tariffs at what a plus relative if So future you able further? And more helpful. for Understanding kind percentage not where eligible on is List the is then might be

Dave Nord

not We've plus, Josh. to quantify attempted X List

Josh Pokrzywinski

through currently bigger or you today? term, guess maybe you're breadbox it it bigger smaller going than I think what to put than like is a in

Dave Nord

Yes. the how get policy it's impossible change for of mean, minds I to in going us forward. could

that. to think and, manage confident Steve in asking, of kind ability as is what's for to we us what put I in prepared front feel of was be our

moving of and on supply favorable spending lot chain an in time the lever. getting to we're that’s awful lever. which more There's around locations, doing, whether productivity we're price So country

to you're that attack relentlessly we're talking quantify to going So tried what haven't we whatever but, about. we - bigger get. if And the no, inflation

Josh Pokrzywinski

some here. one And seems then last to upside me. just show It continues Aclara like one for

more a It You the about bit talked record doesn’t price and like bit force stickier seem an there raw material September. little be business. as quite that? little opportunity heavier Is on maybe a to

not you're there a to challenges that as pass-through obviously, in stronger in portfolio price front, elsewhere but demand room the just So, of on is at offset the maybe environment, some Aclara?

Dave Nord

off longer-term of that I business pipeline point mean, of very out their think to demand a you're be grid lumpier is smart and Their tends strong. the I thing. products right good built for to That's contracts. kind

be a implications. lever talking tends the out And quarters' than next bit so, little you're offsetting what is price to about which rather more

the you're offset it. it probably as discussing that So, a doesn't way - work I'd say price

Maria Lee

Yes.

available I Dan Steve, day. will and be So, all

So, follow-up just Thanks questions, any today. joining reach us out. for - if

Dave Nord

time the look getting feedbacks. Thanks. your Appreciate to forward and

Operator

concludes participation. you This conference today's call. Thank for your

may now You disconnect.

Hubbell (HUBB) 23 Oct 182018 Q3 Earnings call transcript