Hubbell Inc (NYSE:HUBB) shares are soaring Tuesday following its better-than-expected fourth-quarter FY23 results.
The company reported net sales of $1.35 billion, beating the consensus of $1.32 billion.
Utility Solutions segment net sales increased 13% Y/Y to $811 million, with Utility T&D Components rising around 4% Y/Y and Utility Communications and Controls growing 48% Y/Y.
Electrical Solutions segment net sales increased 6% to $534 million in the quarter.
Gross profit increased to $456.2 million from $366.8 million a year ago. Adjusted operating margin expanded 340 basis points to 19.4% in the quarter.
Adjusted EPS of $3.69 topped the consensus of $3.57.
During the quarter, Hubbell acquired Northern Star Holdings, Inc., commercially known as Systems Control, a substation control and relay panels manufacturer, for about $1.1 billion through cash and the proceeds from a $600 million term loan.
Also, the company inked a definitive agreement to sell its Residential Lighting business to Kingswood Capital Management for $131 million.
At the end of December 2023, cash and cash equivalents stood at $348.7 million.
Outlook: For FY24, the company expects FY24 Adjusted EPS of $16.00-$16.50 (vs. $16.42 estimate), sales growth of 8%-10% Y/Y vs. consensus of $5.8 billion and organic net sales growth of 3%-5% Y/Y.
Gerben Bakker, Chairman, President and CEO stated, “Fourth quarter results reflect double-digit sales growth, along with significant margin expansion and operating profit growth. Price realization remains strong, supported by leading service levels, and year-over-year volumes were positive in the quarter.”
Price Action: HUBB shares are up 4.33% at $346.97 on the last check Tuesday.
