Hubbell (HUBB) 25 Jul 232023 Q2 Earnings call transcript

Good morning, and thank you for standing by. Welcome to the Second Quarter 2023 Hubbell Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session [Operator Instructions]. Please be advised that today's conference is being recorded.

hand Vice over President to today, your like Innamorato, Dan of now the to conference speaker I'd Investor Relations. ahead. go Please

Therefore and Thanks our for section Vice by Web President I'm forward-looking and the Sperry. slides thank our forward-looking of of and future quarter Please of this reference our to comments a Act by morning incorporated posted our our Chairman, please results in and include press joining today considered note statements and XXXX. CEO, Securities as second release Executive joined expected statements Good release to may The press results Earlier Gerben statements release note issued and CFO, Private the the are morning, hubbell.com. to call. you our Bill this site Reform the morning announcing discussion are President at XXXX. company us. this press Bakker; by we Michelle. defined of for our everyone the Litigation Investors related of

also comments release These to reconciled and are the measures financial included comparable non-GAAP GAAP slides. Additionally measures the and press measures. are include may in

to turn let call Now, over the me Gerben.

joining morning, quarter Hubbell us Great. you 'XX financial discuss thank everyone. quarter Good results. delivered Hubbell's second And of to strong for results. another

expansion with margin position favorable and and productivity improved supply combined the X% in significant chain which -- Our attractive to growth, markets achieve enabled quarter. to organic dynamics drive us in

outlook again our Solid our year to give morning. confidence execution visibility us raise and good through continued through first businesses strength in XXXX the half of full this the

strong supply and customers. investments our are increased chain finance in times. the capacity, output we results, addition improve to and continue Hubbell's lead sequential service resiliency enabling innovation improved levels In to to

to front drive both Looking meter. continue expect demand behind Hubbell's critical electrification solutions, and and ahead, elevated in infrastructure for to the grid modernization we

'XX growth into half in We business this support investments to of the and will continue beyond. to second our make the

Before would performance more to to I new Bill, you I over to give on our like insights two turn quarter, presidents. the the introduce it in segment

in expanding thank well Solutions is has our electrical gotten will communications accelerating Hubbell on and role utility, his organization. strong ago Allan a You'll I've set know organic building Utility segment. controls. core many growth forward. leadership career, share press years appointed believe and and growth profitable in while passion in Clara Hubbell Connolly's of well and foundation the to to shareholders. track at in and from help suited ambitions and recall Allan's in a past we strategic focus utility few and to over us excited further his Greg his lead His successor to a Greg we've the combined after recent our strong and will critical innovation that XX retirement and leading growth skill performance on attractive automation Utility to Solutions by the him our over Hubbell of for strong our played vision within the industries contributions integrate driving announced adjecancies. to across a and be record moving release quickly innovating Gumbs effectively years profile, year he components, financial from performance weeks like that I'd Greg segment’s as for as I'm talented very for a

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you the it Bill quarter. to the to in performance With here through that, turn financial me walk let

really morning very very, and me, strong of going They're personal very both both to us. Mark Gerben comments we in drive future hopefully It's second this quarter compares of new with my partner second excited I the think year added. top of to and Hubble. the starts things start to the it played QX. as to quarter and Greg to of Thanks quarter. And off positive find their you margin in a Congratulations quite 'XX. that and just was a are with Most or of the sequentially trends very so good we it responsibilities. note prior also summary growth you lot to we'll show of half line in and look of the financial experienced success the deck you of a X that first excellent second from point see joining much, of XXXX. similarly X% to of everybody. instructive in quarter, a in for continuation out grabbed. we the I'm Thanks on materials that Page performance on against We And sequential

that you'll from So remember of quarter first same themes lot the a call. our

that. of The theme result year. price, point favorable the billion, growth reaching sales the year, coming level, guys OP X% from being very earnings a first You well us see increase over price is the efficiencies level, some at improvement driven nearly the in with primarily going XX% margin back last really rate. very X cost to the in last resulting some XX% organic. a the you as normalization above the of $X.XX sales as with That Earnings by organic margin attractive driven X% expansion with the coming acquisition, which by $X again the X% saw growth being quarter level. and supply from per also attractive productivity share of being growth chain OP of level,

capital. really the million, $XXX of absorbing growth, that flow income investment working cash number continued by strong net and and driven in CapEx is Free

very flow, the cash So sheet. I with it's to strengthen this that pleased we're think allowed balance us

sheet got you've point here of of billion midway $X.X XXXX, cash, billion term at $X.X look balance long at the you of the debt. nearly If about

one, we of were CapEx, in really fits sheet debt utility our sensing pleased the that well acquisition. the of in supportive balance being So positions of quarter space. Electro front, our and that in a of Hubbell we controls, profile. quality, able the as metering, less $XX very size announce are being distribution can the to bolt acquisition net products fits on form to our on into of come products in automation ours on It close to segment, area, second think with think we Industries, to than an million. in OpEx other power well both very be typical very EBITDA And And investment acquisition as the

associates our to Hubbell welcome from Electro we new family. So the

I'm and X, this bit going lays to format, which switch out into little in item. now our drill bar to Page performance a chart we'll each

down is partially We'll really and one each from think The by from organic points growth We more. bit a the X% acquisition, said volumes. each a major reflection our contributors, investment sales segment all as acquisitions of talk X%. were in organic. Volumes from X% strategy. the growth segment, little and about X So volumes overall two utility good of pages down subsequent were intentional came in The slightly electrical price. offset I

On the to of made. owning our off comes from Electrical PCX, just wise. acquisition margin start, passed growth first We was PCX, great data a which anniversary a we contribution center and side,

for on for the component side Power Power the us Ripley very Systems. Systems good Tools, On side, extension

again, So intend our how to here. we good deploy of signals capital

We invest. been out to us material profit push our truly to driver continues levels that really and strong Price expansion, has had differentiated over a performance we deflation actual the flipping those success price by consistent last XX% company. also that cost that make quarter, durable as there, On this margin to raws regard. was we're our driven our couple up get from more customers or think a both that helping We so. margins. story of play pricing contributing We to But feedback cost, as levers the service seen XX% also inform levels. level. to emerge to our the continue Besides believe right, I and margins outperforming we competitors pandemic make so to and biggest and able both in continue the our there interestingly, And differentiated tailwind, years support pricing from our profitable we're you've productivity. cost sure component in you see the drive and And want price operating costs upper the there. above the

us. and year I ironed in experienced better think don't We inefficiencies than drive way of a lot they're that's the normalizing, 'XX. think margins 'XX we're we're contributor. chains as Really performing last getting certainly supply are back for factories finding those helping a be that our in out, all we but to

that line per $X our $XXX just level bit, all partially interest earn operating a close the the Below XX% decline you expense, interest drag were is I increase, to help net offset million, was as lower was to but up really profit actually mentioned in income taxes that Again, up share. interest offset cash, earnings have a as driven. a we're by slight to On expense. and really to expense the starting a cash left, and little

a to level of cash you see of second $XXX we almost six first of six than months the was flow, free up the where million. last increase talk page an service. widen of last doubling instructive a absorbing $XX capital as to to it for months the inventory up million in On it the CapEx the more lens cash as $XXX lower got and the support well to the continue find flow. first depicts XX% CapEx about what year million quarter, from need working we've three year. higher a is I the half which This customer and thirds two to more free in months first little about as investment year, or was our been It's the right, that's what

the we're increasing think relationship flow I shows investing So a cash given fact good and the that there.

been discuss really of enterprise the on performance We investment, of And unpack of Let's start the a across very components, performance with model, Page Utility. Hubbell engine has really controls a continued late. and as later. communications positioning by we'll think more leading the we'll bit segment. worthy little business X, unique Utility and financial

business. So Tools growing we've demand comms got before piece on Ripley increase construct the at sales distribution single comprised about nice really and see double volume end Aclara, comms acquisition, the from Aclara roughly and segments across of controls mid-teens. comprised organic That price XX% the the X talking largely the point digit XX% here increase. growing mentioned market two controls is and and really it's business And at the the of is units components $XXX side, million. digit That low here, believe I and complemented to between we're and That's two transmission organic. XX% we

so. happens I we We chain the a second margin -- out shortage supply on saw side, see meter nice and And over in very the business, nice the very their easing us, development. chips now kind customers. that see as first quarter, attractive year a back will of for And a really supply supply a demand of our trend. good be it chip the the friendly supply and of and mix last of business the remember with side, we of same by very had comps. they held been improving gates see backlog comms following the think quarter half a you for a or to so And of second second strong most had half That quarter. they gross from a with exiting their we of the the chip because got they've we

think good half we So second well. meters have a as will visibility

news good to being to think I kind held comms of the see So by back supply not half constraints. returning

really quarters the the seen on Systems growth. And you've recent Power that having side, strong over

order orders you was showed showed orders chart they And to we at of you'll essentially And levels. until to the work a proper ordering chart I frame their that and especially year period. obviously reacting reflecting, I inventory would of two segments we we've the not chain was last customers sustainable the off of were of times in shipments. as see area, buildup that that inventory moderate particular shortening seen of order to relentless are dates. strong end components can And in that to remember the pattern order of think to keep of gets to themselves the time also be start of adjust That supply three a pattern of promised yes, supply farther peak stocked. those customers review that improving really the delivery to then in as need discussed and quarter the shortage say, to and can demand normalize, they started backlog but that over light had that and our a we've starting reflect and lead fact ahead their

both as telecom well of as the that's the attractive Power those backlogs. side Both very market. have Systems So of distribution end

be adjust. the we guidance in to So as half mentioned, of navigating our that got backlog momentum a as carry of second we've had patterns period Gerben order using year. the us we'll those clearly the the through raising feel And

mentioned margins. of inefficiencies. right Really just impressive in you cost year that north a page, those mix about half, side talk page. favorable. And there, factories rid increase on we'll next getting side has XX% the The of Aclara of are on operating prior profit And side price very of bit investing second some as as OpEx the investments with the the we those XX% the quite productivity. been the we CapEx are anticipate good see story, the well and on little a improved and performance the of increasing I

narrowly. So we is Page you the more space. this kind wanted highlight to And for X, defined transition of

substation critical grid the really is. of the distribution But than area and we a piece, hardening smaller getting As more side renewable generation often point electrification kind transmission, here components lump to in the to narrow really the world. user this but nonetheless, transmission modernization, the is the of where enable

Right rates single attractive. we're what here high think long the to term -- over here and in We now, dollars up the government over there's in trends helping very seeing XX% the project. support stimulus we're IRA on harder we So I described contrast through see packages, the seeing tax where funding quotes think really prior are telco growth in digit range. development distribution, year. the provision orders of to from and credits policy spend IIJA some the versus We is providing from spurred

dynamics So we think growth nice area. really in the

and positioned. We also the really reliability. of We that quality breadth products, have well feel and depth are best we think we

the getting helping want strengths. to and help think to material there's tendency to with fewer of ultimately, And projects, the problem feel a Hubbell's solving I plays complexity suppliers. We to also these design area

plays well that So to very positioning. our

a but feel effective graph very So the you to markets on Hubbell such and we'll that's point in The total a in going fair positioned customers. years, that enterprise over to CapEx the our very well that get very of increase part is share our require where support help couple at our capital. of investment we see strong

to to And little now the put shift was onto side, plus and our little tending the say, the you'll of I'd growth see the early [XXX]. side, part bit on distribution On T, it's say more focus right to Electrical going a raises. we've we're to productivity CapEx the earning And side. sign utility Utility starting I'd the a of more the

are we the those play over dynamics we of from think year, don't dynamics out As We even think -- growth. if half investing we the away require so would I attractive shy it. more have second the

we're than earn share. well to more invest We're our fair positioned and to prepared

think out really the customer provide margins a our projects, which helps to that we to way As I differentiate analyze just solutions they of beyond financials. continue to it's big customers, for ultimately also service when good excellent ROI quarter. to these But and just the utility we our have map support sustainability our last you us a

X% points. had I added that underlies also can kind sequential is And there. a to $XXX see And of million, segment. little that's to that customers rationales one of about so of PCX for bit so year-over-year The X our a continuing talked better in way. support our a Electrical growth, you typical want than X% acquisition growth X seasonality the differentiated to Page

in being of is will expectation The adjustment we've a arena, is So we of therefore, in with all the nearer and customer the their transportation, And the growth on the customers where power I gas, the and days growing on that inventory line Electrical book commercial be half end From there. anecdotes for manufacturing, more in to side. targets second period I segment adjust order mid-single bill. telecom organic And end little and is providing strong they commercial patterns. between digit seen a between are renewables, perspective, trend included that and the we actually a systems starting may that -- that their in been think more the reshoring balanced our our in down think were steel We've strength successful are a the And X% the D have. suggesting the and getting to be we're oil showing demand, verticals focused markets the price. we and as very centers markets of contributors on data industrial US that strong similar, us. to described seeing more and

he higher OP business. see the was is the the not of we'll sort has on going out as and inside improvement be multiple We're on businesses. The collectively and brands able right, the power productivity as XX% he'll I on come multiple help of at help segment, us a acquiring growth been cost focus of margins it. to compete durable Electrical been growth. positive this innovation go focus make lot try can has very to areas of on acquisitions higher margins again, incredibly It's where to be to that's together the a And bringing us and higher there. over in I we support segment. product think high growth, points vertical to of margin He where focused volume obviously same and pull do us And it system continue on and should driving the and side product as be an going think with right the you focused that price productivity development Mark to Mark balance new takes the forward. continue those to, successful And in side, good into

the performance segments, those I'll to we give Gerben here to that it point. share and are in our that's stand So at -- two affects as back the halfway the you financial the with outlook how

adjusted range the our midpoint. $XX.XX year at to our XX% representing And is Great. for the Thank of XXXX Hubbell share you, moving approximately an adjusted Bill. raising $XX.XX, outlook. to to earnings growth earnings per outlook

the sales growth X% XX% in X% to with We project X% range organic growth. total to of continue to

to across of These innovation that visible productivity, our primarily to productivity 'XX us which the for effectively our confident our to serve investment of supply our cost investments visibility favorable expect future We're accelerate by operate each with second second and results discipline grow to and in drive people. demand beyond. our also position term our drive stakeholders chain half levels across to enhance margin as accelerating areas performance is increase second strategic deliver growth, pillars, higher the in strong outlook businesses. continue customers, longer half strategy enterprise, develop price to improved half I'm are and in for driven the Our will improved and to resiliency. sustain capacity continue with execute we our

me that, with And over let turn to Q&A. it

The first Stephens. Instructions] with from comes [Operator Tommy question Moll

for a higher about wanted highlighted of stimulus singles space I outlook. utility contribution. Today, of with quarter, Gerben, maybe grower, next market next is digit investment at transmission you to as distribution Hubbell the start piece high Last the the even year. grower, single a to mid you year needing transmission talked accelerate the and a a with preparation discussion highlighted in

do mid high think that If roll you even digits? all you should single that or up be maybe utility together,

maybe with this and couple I'm comments, will make well. Bill, a sure, I'll as Yes, help of me

earliest It's investing You're comments the where the probably right investment integration an of highlighted areas to Utility, what Bill point the -- the one in many that grid. we seen we've years. of area started elevated and renewables of of out transmission. with and the of really It's saw the interconnection

at can look have certainly, where But on we're signs I have is something single and why it's to optimistic right of you there if comment business. We visible grow, maybe perhaps be digits this this And mid of that. the and that optimistic. add about make so continuing count say we're grow Bill, market way is may pockets we times But to the we it too. or together, single all why that's you whole to still reason mid to it. believe, that

getting I don't how good the we're term add single I feel digit think projects. ROIs a I'd on say, really long we Tommy, of and reflective mid these lot. would is outlook

going with invest our and customers. to we're So continue to grow

destocking back helpful, the insight would is like I'm Shifting maybe Bill, the as But about there. curious to just anything feels some but be if Electrical. mirror the there potentially the this is into you of rearview have any by through commentary light? quarter, you better you detail year. additional gotten has shifting And sell Qualitatively, provide item shine or any referenced the could a last worse half same to would it

similar to sequential sort seasonal the felt we're expanding that that happy margins. Even you're think without Yes, growth. first right quite that of they're it volume, quarter I

and and And as -- of that and with of productivity work the XX CEOs think is price/cost So spend Gerben paying customers some work year. throughout leaders top time spend the we I our off. we

I use closer we much they now, all think them to meet inventory talking we have like the sound their when we they much to target inventory last them they're too levels. were word, and year, with

For the data have is add, that what sold. getting providing point-of-sale we're we like do feels it

it's being just closer we've Electrical as So just adjustment, in we're that are -- that does like to through And those gone balance. it the segment. feel specifically comments to

I Utility, side. distribution sort think, on to the earlier and of side middle maybe we're of telecom on the that

So two maybe a the spread response. on bit Tommy, segments, they've -- maybe been were out customer little

Josh question next The from Morgan with Pokrzywinski comes Stanley.

a distributors. dig up as guess, I are now is how on right you're steady want little timing goes Data talking more, sounds few I like, more I'm maybe what few next moderate. Just perhaps in a bit a much just to guess, function seem in moderating guess, this slides the like or, of more. or seems quarters? the you is bit It prospectively, the she guys of commercial Does softening for tone it's I construction. to seeing months, still here wondering

dramatically a to our us, sure the business. our you if for were exactly exposure we C&I a statement we pretty commercial or side, would I sold reduced question. lighting not I'm making say, Yes, as commercial

balance we commercial XX through going of are three two, some weeks this out customers balance of where adjustment now our were they're range, renewables specific at now like the a centers. exposed these range. I'd we have times were -- they our week towards where kind The data is say, more and Gerben, to Josh, down -- lead We as and verticals that of describe, to would being

an as to had bit see little couple a on ordering that's been Josh, we're like customers impact, so Electrical, does unit of adjustment quarters. volumes that the that's the period feel think, But getting we been the that have it closer you point. how our just we're balance And on shipping. us affecting, And for ultimately for past

just And on up the then M&A to follow maybe environment.

maybe I a to noted value as electrification? really a to Are typical a there with consolidate for guys start kind that, maybe Hubbell kind you environment little here. of just appreciation this sub bit And would aren't guess, more of assets I more You seeing, with acquisition deal then of a multiples levering up or the increase these if consider increasing, disconnect? to broader guess a point some you bit

that's parts to question. I that think -- two

The is million tuck-in first typical interesting, I than $XX this market. more market typically of average little And -- more is there's do M&A assets kind us. coming are Josh, assets it And is see. to there above we quite for that

the So yes, how a to market. little to affecting different, I see are in buyers rates that's of the figuring But think some seeing which is is financial those maybe is feel that valuation. It's more competition good kind assets and of right, interest bit time pipeline, the this a owners approach I is market we kind you the good bit And higher a in processes. interesting. little response a have in get interesting, we acquisition finance

I we major think interesting aggressively. invest do asset about specifically were one, strategic a second the and And can sheet. now because your is right view as multiples. that PCX we think around I we balance And I certainly is question think asking an feel you

had find own it, impressively it And and in we've with we do we XX that of buying were it year, times the grown the in XX, range, both for digits. what because PCX the really have a so and better done single we margins if we it's

in. the be And margin question think the your put of so think, was I and businesses that potential are growth justified of part a can some given higher we multiple, of

listening result think in So there's I'm probably you're hoping multiple not now but a too many what investment of upward as do are right I some bankers drift asking.

in the capabilities more to businesses add I resource the GMs the would a faster be some comments two it put to that's to by over enterprise process, are that than couple the say of place involved both And segments on to last by individuals helped in at focused on. to added pace, segments, this M&A, the go resources. a I I'll make of Maybe and of ever complemented bit, maybe We've just the able of as look across years. the partially we operational discipline resources the obviously

to say but some pipeline this our is the resource is better. I'd not off capabilities of So only pull fuller

expect forward. So us going for I to contributor a would that be good

Wolfe next Research. question comes with from The Nigel Coe

players, visibility are you seeing larger So any a seeing then sorry out on there's on obviously coming a from between it about some and the difference segment that, if there that the big shippers missed bulk lighting? differentiation like in inventory the more But out inventory, remarks. One of is are me. the within couple of components of bit of the prepared the you some smaller I'm talked you Electrical seeing and the questions sounds your are of and I of players? core you And sort between smaller national And and any that.

would to the have start Maybe the with have a actually pressure that smaller it's anecdotal, I the felt the the actually in inventory the when inside, saw but larger distributors. customers. is longer than a little They've bit It's been little from less started I'll pandemic distributors on that say, inventory. really on those kept particularly that public reduce bit also probably heavier maybe the those actually place -- distributors, we may companies inventory to serve

inventories disciplined chain because been been I now loaded pandemic to think market the then after they've have adjusting little started, again adjusting of constraints. their when a probably supply the in and more the the larger

So actually I it opposite, would Nigel. be the argue may

then on any there? lighting, sort of And differentiation

Nigel? lighting, On

was lighting. mean, if I'm I that negative Yes. just that… disproportionately in wondering

volumes. that negative piece have did resi significantly the have still So we

the on top the the of one productivity has transportation in been from drivers product cost. of they thousands the cost line some $X,XXX. pandemic supply and so resi a the container It's business down those Asia have interestingly, like that to container normalizing, of were dollars back imported we that chain But for described, costs really impacted the $X,XXX, from of [capped] mid-teens biggest way. out up And gone

the volume business that allowed really, earn that's again. despite so a drop, to margin And resi

cost and structure. currents have cross of there kind So big they volume between two

just a just the play you transmission my voltage follow-up is on and but that how you us maybe where business big think said remind transmission in you player. high on don't then Hubbell remember investments. could capacity just be? business, I And remind play of normally as transmission? test Can where the us you We

So product line is traditional one. a the

if that's of and lump the driving we up one on at plays. And the the insulators where talking and ballpark $XXX of up exclude in, So see kind right for which there, of steel those we're highway if Hubbell a the the part in hardware now, up you there usually towers exposure you're you and million you look Hubbell. substation, of

think, because all to the capacity components for in of between acquisition certainly But and interconnects high versus the So the, that for kind potential et certainly regions, investment, of renewables constrained growth segment, of the drivers I see of demand we digits organic I just of area that be a up larger the of XX%-ish we foreseeable kind single piece. investment. see again, future for be the And the FERC in there, percentage cetera. and range environment could an Nigel, hooking think supply to continues

Joe The next from Wells question Fargo. comes O'Dea with

to and talked for service start I wanted just about levels you've -- a on you. I being differentiator mean, Utility

you're differentiation normalized and sort supply a get opportunities or opportunity bit, maybe just some as chain we a you? little to supply competitive As of any for remain environment see diminish chain where curious even improving, we anecdotes of will that do whether not when sort seeing of service those

a Yes, we hammer And to service based have outperformed. and ran I in, a out, would what that out go it's because even week have pandemic, back day different that week us, always that's a saw Quality and business, been as I I you right. When certainly I have day make in, quality service, price, a compete lot say customers absolutely on on harder. differentiator, core. decision during overnight to the that would told On level. can

to see pandemic, and point we closer others market improving But again some once to up, and you're proof to when and outperformed. have as hard have during period, would the that you'd underperform in storms you the So again give event, hurricane recover, so right out, to you probably supply chains you during that, -- getting ice actually our levels. share. gained we that's I again. say, also And this

outperform level to So continue But of allows part us we're of I'd that is continue that part about, And then service. when investments able to the making, just hold on that on. requires demand the investing say up transmission, to bar. to to raise talked to us we're Bill the what capacity in and

we it's servicing allow bar are of raise to and on we So of continues being the that, ahead differentiator. a to feel us that, and ahead

you're on market comment and you you specifically wanted it, or consolidation making of then conversation time any is some raws start are the in what I And it that, supplier related filter I translating component to to before it historically, in something components Is then the that you're both the deflation generally where And do and broadly price? that efforts a to be function see and deflation? some it, the going into components, the seeing market around is that mean, of side. see on of to on ask seeing when would lag to would that you

So of components and raws were were the around tailwind. my sum comments a

behaving any I So if that doing components Dan, result differently. comment the know, say something a I it's there's different. us specific wouldn't don't of are

paradigm think, page, just I job and nice And structure other I overhead XX% describing raws And cost in that's cost. say being driven a about between have showing Dan think our price cost of market our labor and being the of are productivity -- how and the pricing relationship half and by had I usually, And items. did and interesting would the and material initiatives inflation offset burden is reaction. quarters nonmaterial a you're those kind that and the material our ago offset areas. it's to two material other cost to

see you're quarter it or offset three would and earlier, years we if inflation what into were we market the back kind take the that. would materials, -- a get asking going so see in usually, to ago if price of I'm to to And two us for

So relative than necessarily of been years, cost. question, will. the question, right? Joe, has that by capacity us and if by on two You're say the connecting you first else But to leaning to would it feels driven of lagged the to somebody outcompete back like is pricing just trying rather service to was And we're of the hedge, a last in kind in kind investment. a doing we're lack I --

Hubbell's sort finding really be part this to and of a of space we're be leaning larger be company. that, -- maybe smaller of core utility think a others into to diversified identity maybe I where might division

JPMorgan. The Tusa next question comes from Steve with

gave you that's year for into the quarter cost and just Utility good updates in execution. comfortably Congrats strong. guys and kind be if already like a you Any type is feel very margin so price of more little now little give obviously about mid-XXs? bit of a have another And this then what you how you go exiting But to quarter? then back the of next with just you I on can I that what would on the the year into level Can this year fourth margin -- kind now, joined late, numbers us the of expect the given just absolute it transcript.

So for being than price, all more it the the organic of let's with quarter. about we start Steve. And talked

pulling getting where in you're So lot the we're the quarter. X a points about in to the talking point We're quarter. roughly of last not price of price

sort we're riding and price of previous the increases. out lapping So

looks things of to the the second starts little half the will start that on cost price you'll half, expectation to harder So in year-over-year predict. moderate you of as second compare dynamic us a for bit. the a half, bit that a to and see second just just is guide kind to our bit the little that's one narrow embedded the in fact that, basis squeeze is little a like But that it in

gets And focus. this second your think half. area in like question be incrementally supply of And innovation is we're to to chain so going be resiliency. to investing more some -- going And to related We're utility I an it areas in doing in be transmission the continues that. investing, to

maybe get, third we as describing when our quarter with conservatism to our October, expect. will to sure that the into all what of our to 'XX second of start have we some think, half right? saw April you guide in view some But of fact And be. you think so I what If call having better in we guide, you a expectations I by a raise raised just weren't go our us mindset to were by we because our couple dollars, we'll

of that midpoint in us midpoint, gives see momentum us $X.XX the our to better some has been away. you're think by that caution hearing actually raise half of I visibility taken second we and here say

more we so. or as of we'll do a with the that and that be we're call to work how extending do months And talking 'XX. those you will and to as to in about like really you're the saying, Steve. now got, can, maybe momentum try think I next margins lot to make you've that, ultimately, end year that going appear as six durable obviously, And over the we'd that

mid the a bottom you're come in keep perhaps. mind? impact mix transmission more you dynamic bit is the of maybe, I have from T&D bit a bullish guess little kind kind cycle off -- to I of there of to of view now Distribution that as any like as kind impact we Is transmission. And cycles. more on handoff to from any these smaller that a mix ticket projects in late the

No.

see is difference. reasonably we consistent are from of the in agree projects, you that I is projects, think a outperforming. mix the but margin profile And kind T our D Aclara actually the bigger two benefit I quarter did across the with that second smaller comms despite

And trend. so that's to sort interesting watch of that

our to as relative their of margins part -- are high portfolio. gross Just our

that, momentum an be mix good if behind So can get could contributor. that we some interesting

The next UBS. question with comes from Snyder Chris

we longer, -- remarks some have this backlog alongside on patterns. to the for or changing QX take of the revenue up we orders won't in down impact to the their down bit Should prepared did elevated? that? just order hit on follow mean is backlog were the for side wanted commentary about And that and revenue a given quarter, utility to did that June customers in still any come utility is the that I

that from that. there's us really there. backlog And backlog, support second the not we quarter, backlog But is enough to The which utility. an to orders you as the view raise, is were but second in our of comes that gives noted, down the half, enough underpinning support is just guidance the confidence the

lead I as it's times now. So really be in our they period through adjustment many we're ordering going supply to that the period recovering just confusing just as don't it's think far customers really that adjustment right and long out just with And that places, impaired. us need to was now chain

because year-over-year. think I the And really for makes harder the important this as it adjust part period it a they

back So increased XX% think first last quarter, during orders over our you year, XX%. half, and if of the within

times So not real out. just we demand even That's a said reflection of lead then, going the a that's sustainable level. time that not at

compare. now So to those are we the comps which

at level. So even when a elevated still very orders it's are down,

to say, times Our lead backlog down. would taking thing came And our still very utility levels. other much I well last us in modestly down above historical timed it's the quarter. very It's

the taking this in lead down adjustment. we see our where it's So that times areas we're

as So anticipated it's say, predictable. pretty would I all and, we

the Is than will and Aclara be have the back just year I raws to the kind ago? back capacity margins there that not second really, strong in being is the held at then about like given was maybe decline, think No, we some half just company there's of costs are levels. obviously but some same the really that a that going supply chains maybe appreciate really back to a components? the the because price and guide, of that. half is And guiding or in half the recovering first lower and urgency half, and installations when first we utility expectation coming still mix on at When as is procure function price higher it that from look to there

side mix of year-over-year, increasing price. as segment. we're we are richness the And to price have and some But anticipating inside investments little in we we giving cost be a not anticipating are that our narrower. did we the the quarter go Chris, on anticipating OpEx second

is So say, contributing, just as off nice there. comp kind that -- level of a you of of high a margin, all

The Glynn next question Oppenheimer. is from with Christopher

hopefully, on run it's terms kind sort yourself? I lead Utility's upgrade fixes plateauing to I the of dynamic distribution mixed there know kind about modernize the asked consume to side. question capacity and time But and in products a ability of adjustments. their of Is of and clearly the anything curious So the of enough. against

are I that companies of mean constraints. And getting there degree I think maybe but there of some that installer you capacity. add, adding what adding I I is at that good installers form some basically think -- utility, is can't outsourced think are you're just inside of -- are at

think to do Chris. single infrastructure that the think And I units from expectation is. that's more, hang digit ultimately is put I need mid able being from there, what the So our

the dynamics we and semiconductor that segment. then margin through pandemic favorability. think read mix thought And favorability dilutive within Aclara, the there. we a the extended you as consistently mix margin And more total referenced of haven't one At I gross Utility and clean point, on had the

curious favorable that mix Aclara what there we're just is about changed So talking now?

of for and proxy incrementals on inside I'm now being side. as gross margin absorbing of Yes, was profile. of of really chip your there using kind lower speaking -- that because quite first the the I'm were they Aclara, sort sitting with attractive it were they as comments all overhead, a which volume were supply disruption, cheating constrained the right, to incremental margin a comms and the

And doing at we're absorbing as is constrained volume all overhead, profitable. not about so talking a think I

Now area, are if incrementals attractive we way, sense. a that as add the that growth in high makes

for this back call closing time, like turn questions. I now show At the further to I Dan no would to remarks.

you. Great. Thanks, I'll And around for be all day Thank for joining everybody, us. questions.

for call. you conference today's concludes This participating. Thank

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