Hubbell Raises 2026 Outlook as Q3 Sales Rise 25%

Hubbell Incorporated (NYSE: HUBB) raised its 2026 sales and adjusted earnings outlook after third-quarter revenue increased 25%, supported by double-digit organic growth and acquisitions. Electrical Solutions led the quarter with 22% organic growth, while adjusted operating margin for the company expanded despite inflation, higher raw-material costs and continued capacity investment.

For the three months ended September 30, net sales rose to $1.87 billion from $1.50 billion a year earlier. Organic sales increased 11.3%, while acquisitions contributed 13.2 percentage points of growth.

Adjusted operating income climbed 33% to $476.8 million, and adjusted operating margin widened 160 basis points to 25.5%. On a GAAP basis, operating income increased 24% to $408.7 million, while operating margin declined 20 basis points to 21.8%.

Adjusted diluted earnings per share rose 14% to $5.91, reflecting higher operating profit and a lower share count, partly offset by increased interest expense and a higher tax rate. GAAP diluted EPS increased 4% to $4.94. Free cash flow advanced 10% to $280.4 million, as higher capital spending and working-capital timing limited the increase.

Electrical Solutions drives growth

Hubbell Electrical Solutions generated third-quarter sales of $844.7 million, up 51% year over year. Organic sales increased 22%, while acquisitions added 29%, including the contribution from NSI Industries.

Datacenter sales grew more than 80% organically, supported by market demand, added capacity, new products and increased content. Light industrial and non-residential markets were also strong, while heavy industrial demand remained soft. Hubbell said NSI’s performance and integration were ahead of its initial expectations.

The segment’s adjusted operating income increased 80% to $209.5 million, with adjusted margin expanding 400 basis points to 24.8%. Volume growth, acquisition contributions, pricing, productivity and a net tariff benefit supported profitability, while inflation and higher raw-material costs remained offsets.

Utility Solutions invests against order and backlog growth

Hubbell Utility Solutions reported sales of $1.03 billion, 9% above the prior-year period. Organic growth was 4.9%, and acquisitions contributed 3.8 percentage points.

Grid Infrastructure sales totaled $808 million and increased 8% organically. Distribution, transmission and substation markets benefited from project activity tied to load growth and grid hardening and resiliency investment. Management also reported broad-based order strength and continued backlog expansion, prompting additional capacity investment in higher-growth areas.

Grid Automation sales were $220 million and declined 4% organically. Temporary component availability constraints affecting meters reduced third-quarter sales by about $15 million. Hubbell said the issue had been fully resolved and expects recovery in the fourth quarter. Protection and controls sales increased at a double-digit rate, led by substation switching.

Utility Solutions adjusted operating income rose 10% to $267.3 million, and adjusted margin increased 30 basis points to 26.0%. Volume, acquisitions, pricing, productivity and a net tariff benefit were partly offset by cost inflation, higher raw-material expenses and investment spending.

2026 outlook raised on stronger sales expectations

Hubbell now expects full-year sales growth of 18% to 19%, compared with its previous range of 16% to 18%. The organic growth forecast increased to 10% to 11% from 9% to 11%, while the expected acquisition contribution rose to 7.5% from 7%.

The company increased its Electrical Solutions organic growth forecast to 17% to 18% but reduced its Utility Solutions forecast to 6% to 7%. Hubbell expects a full-year adjusted operating margin of 23.0% to 23.2%, compared with the prior 23.1% to 23.4% range, as stronger volumes are balanced by incremental inflation, pricing and productivity effects, and continued investment in service and capacity.

Adjusted EPS is now projected at $20.40 to $20.60, up from the previous $20.25 to $20.55 range and representing expected growth of 12% to 13%. The company retained its forecast for free cash flow of about 90% of adjusted net income. Capital expenditures are expected to total $175 million to $190 million, primarily supporting capacity expansion in transmission, substations and datacenters.

Backlog supports 2027 growth expectations

Management described the setup for organic growth in 2027 as attractive. Utility Solutions built more than $500 million of backlog during the first nine months of 2026, with large transmission and substation projects visible in both backlog and the project pipeline. Hubbell expects grid hardening, resiliency spending and load growth to support the business, while meters and advanced metering infrastructure, telecommunications and gas distribution are expected to post modest growth.

Electrical Solutions added more than $100 million of backlog over the same period. Management anticipates strong datacenter growth, supported by new products and content gains, as well as continued strength in light industrial, electric transmission and distribution, and renewable-energy markets. It expects modest growth in non-residential and heavy industrial markets.

The outlook remains subject to risks including tariff changes and the timing of potential tariff refunds, inflation, raw-material and energy costs, supply-chain availability, foreign-exchange movements and the company’s ability to maintain pricing and productivity gains. Hubbell also identified continued softness in heavy industrial and residential markets, acquisition integration risk, and uncertainty around the durability of datacenter demand.

At September 30, total debt stood at $5.12 billion, compared with $2.33 billion at the end of 2025. Net debt was $4.66 billion, representing 51% of total capital, up from 28% at year-end. The company’s forward outlook also depends on planned capacity additions and the successful integration of acquired businesses, including NSI Industries, Ventev, Nicor and DMC Power.