Red Flags Behind Hubbell’s 2Q24 Numbers (HUBB)

Accrual cuts were a large part of the reported outperformance in the quarter

Hubbell’s (HUBB) adjusted EPS in 2Q24 of $4.37 beat by 16 cents. However, it missed on revenues by $31 million. It cut the revenue growth forecast from 3%-5% organic growth to only 3% for 2024. HUBB only raised the low-end of EPS guidance for 2024 from $16.00-$16.50 to $16.20-$16.50 or 10 cps at the midpoint. However, this comes after it beat earnings by 21 cps in 1H24 which implies a cut to 2H guidance. All of that comes after HUBB spoke about channel destocking ending and that it is enjoying price hikes from last year against falling commodity costs.

Our review of the quarter turned up several instances of cuts to accruals helping to drive sales and earnings. We believe these benefits could easily reverse in upcoming quarters introducing barriers to growth that the market may not be anticipating.

Let’s get behind the numbers…

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