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Electrical and electronic products company Hubbell (NYSE:HUBB) missed Wall Street’s revenue expectations in Q1 CY2025, with sales falling 2.4% year on year to $1.37 billion. Its non-GAAP profit of $3.50 per share was 6% below analysts’ consensus estimates.

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Hubbell (HUBB) Q1 CY2025 Highlights:

• Revenue: $1.37 billion vs analyst estimates of $1.38 billion (2.4% year-on-year decline, 1.3% miss)

• Adjusted EPS: $3.50 vs analyst expectations of $3.72 (6% miss)

• Adjusted EBITDA: $285.7 million vs analyst estimates of $301.6 million (20.9% margin, 5.3% miss)

• Management reiterated its full-year Adjusted EPS guidance of $17.60 at the midpoint

• Operating Margin: 17.5%, up from 16.3% in the same quarter last year

• Free Cash Flow Margin: 0.8%, down from 3.7% in the same quarter last year

• Organic Revenue was flat year on year (2.3% in the same quarter last year)

• Market Capitalization: $20.58 billion

StockStory’s Take

Hubbell’s first quarter saw mixed performance as management cited mid-single-digit organic growth in its Electrical Solutions division and a modest rebound in grid infrastructure, offset by ongoing softness in grid automation and rising raw material costs. CEO Gerben Bakker pointed to strong data center demand and efficiency initiatives as positives, but also described the environment as warranting caution due to inflation and new tariffs. Bakker emphasized, “We see no net change to our prior near-term and long-term views” despite a more dynamic macroeconomic backdrop.

Looking forward, management maintained its full-year profit outlook, expressing confidence that recently implemented price increases and productivity actions will help neutralize cost inflation from tariffs and materials. CFO Bill Sperry highlighted that price realization is expected to catch up with cost headwinds by the second half of the year, while also acknowledging that the timing of offsetting reciprocal tariffs remains uncertain. The company continues to see strong order trends and believes it is positioned to benefit from long-term investment in grid modernization and electrification.

Key Insights from Management’s Remarks

The latest quarter was shaped by a combination of cost inflation, segment-specific demand trends, and ongoing supply chain and pricing dynamics. Management attributed deviations from expectations primarily to weaker grid automation and lagging cost recovery from tariffs and materials.

• Electrical Solutions outperformed: The Electrical Solutions business delivered mid-single-digit organic growth, driven by strong demand from data center projects and continued success in industrial reshoring. Margin expansion was supported by ongoing efficiency initiatives and consolidated segment strategy.

• Grid infrastructure rebounded: Grid infrastructure returned to organic growth after a period of customer inventory normalization. Management cited double-digit order growth and strong transmission and substation markets, reflecting increased utility investment in grid modernization.

• Grid automation remained soft: Grid automation sales declined by mid-teens percent due to tough comparisons with the prior year. Leadership noted that this segment is now stabilizing, with smaller projects and maintenance activity helping to establish a base level of demand.

• Tariffs and raw material inflation: Recent cost increases from tariffs and material inflation created a significant earnings headwind. Price increases have been enacted to offset these impacts, but management said the full benefit will be realized later in the year due to the timing of cost recognition under LIFO accounting.

• Order trends and customer spending plans: Management reported double-digit order growth across key markets and noted that major utility customers have raised multi-year capital plans by approximately 10%. This signals robust demand for transmission and distribution products, supporting the company’s long-term growth outlook.