Hubbell Inc. (NYSE: HUBB) reported Q4 EPS of $1.91, $0.06 better than the analyst estimate of $1.85. Revenue for the quarter came in at $1.1 billion versus the consensus estimate of $1.15 billion.

HUBBELL REPORTS 2019 FOURTH QUARTER ANDFULL YEAR RESULTS

• Q4 diluted EPS of $1.85; adjusted diluted EPS of $1.91(1)
  • Includes restructuring and related investment ($0.26)
• Q4 net sales decreased 4% (organic -3%, net M&A -1%)
• Full Year 2019 diluted EPS of $7.31; adjusted diluted EPS of $8.12 (1)
  • Includes restructuring and related investment ($0.51)
• Full Year 2019 free cash flow of $498 million (3)
• FY20 diluted EPS expected range of $7.50-$7.80; adjusted diluted EPS of $8.50-$8.80 (1)
  • Includes restructuring and related investment (~$0.40)

"Hubbell delivered another solid quarter of operating performance," said David G. Nord, Chairman and Chief Executive Officer. "The Company essentially achieved our target to deliver $500 million of free cash flow by 2020 a year earlier than previously committed, driven by effective working capital management. We also continue to deploy this cash to attractive bolt-on acquisitions, two of which closed in December. Cantega Technologies is a provider of asset protection solutions to the power grid, an attractive market niche with strong growth and margin characteristics. Connector Products is a designer and manufacturer of electrical connectors and accessories, with high margins and a strong track record of growth, providing a strong complement to our Burndy brand."

Mr. Nord continued, "End market trends were mixed overall. Our utility facing markets remain strong, with ongoing strength in T&D components more than offsetting the impact of difficult prior year comparisons at Aclara. Electrical segment end markets were softer, driven by weakness in C&I lighting, along with continued softening in industrial and oil markets."

"We continued to be proactive by accelerating our investment in restructuring actions over and above our full year guidance, which we expect to generate significant cost savings in 2020 and beyond. We also remained effective in driving price and productivity to offset inflationary headwinds as price/cost continued to be a positive contributor to another quarter of adjusted operating margin expansion."

Mr. Nord concluded, "Hubbell's fourth quarter and full year results reflect continued execution in an uncertain environment. We remain cautious on near-term volume expectations, but with aggressive cost actions already underway and continued opportunity for operational improvement ahead of us, we are confident in our ability to drive consistent and differentiated performance. Our high quality portfolio of electrical and utility solutions with strong brand value and best in class reliability positions us well for long-term success."

GUIDANCE:

Hubbell Inc. sees FY2020 EPS of $8.50-$8.80, versus the consensus of $8.68.

SUMMARY & OUTLOOK

• For the full year 2020, Hubbell anticipates end markets will grow approximately 1 - 3%. The Company expects 3 - 4% growth in electrical T&D markets, 1 - 2% in non-residential markets, (2) - 2% in industrial markets, 2 - 4% in residential markets, (2) - 2% in oil markets and 1 - 3% in gas distribution markets. Sales growth from previously completed acquisitions is expected to fully offset the impact of divestitures.
• Hubbell anticipates 2020 adjusted diluted earnings per share (“Adjusted EPS”) in the range of $8.50 to $8.80(1) and GAAP diluted earnings per share expectations in the range of $7.50 to $7.80. Adjusted EPS excludes amortization of acquisition-related intangible assets, which the Company expects to be approximately $1.00 for the full year(1). The Company believes Adjusted EPS is a useful measure of underlying financial performance in light of our acquisition strategy.
• The earnings per share and adjusted earnings per share ranges are based on an adjusted tax rate of ~23% and include approximately $0.40 of anticipated restructuring and related investment. The ranges also incorporate the impact of a previously completed divestiture and previously completed acquisitions, the net of which is expected to be a modest tailwind to 2020 adjusted EPS. The Company expects free cash flow to be ~110% of adjusted net income in 2020. (1,3)

For earnings history and earnings-related data on Hubbell Inc. (HUBB) click here.