The quarterly financial reports coming in over the past two weeks from publicly owned electrical manufacturers, distributors and contractors offer some insight into the growth expectations some key players have for the rest of 2024 and into 2025.
Construction expectations are steady-to-sluggish and not spectacular outside of the data center, semiconductor and EV and EV battery segments, and those market expectations are shaping the feedback gleaned from several industry executives who recently reported financial results for their companies. Let’s take a look at some of these reports.
Hubbell
Hubbell anticipates full year 2024 total sales growth of +7% to +8% and organic net sales growth of approximately +3%, as compared to full year 2023. Gerben Bakker, chairman, president and CEO, said, “Second quarter performance was highlighted by strong organic growth and margin expansion in our Electrical Solutions segment. Robust project activity drove strong sales growth in data centers and renewables as our vertical market strategy continues to gain traction and differentiate Hubbell with our customers.
“In Utility Solutions, sales growth was driven by acquisitions, as well as strong growth in transmission/substation infrastructure and grid automation. Utility distribution markets continued to be impacted by customer inventory normalization, and telecom markets were weak. Utility T&D end customer demand remains strong.
“As grid modernization and electrification drive investment in utility and electrical infrastructure, Hubbell is uniquely positioned to continue achieving differentiated, sustainable outperformance for our customers and shareholders. We are raising our full year 2024 outlook and are confident in our ability to continue delivering on our commitments.”
Eaton. The company published some of the strongest 2Q 2024 revenue results. According to the press release, “Sales for the Electrical Americas segment were a record $2.9 billion, up +13% from the second quarter of 2023, driven entirely by organic sales growth. Operating profits were a record $859 million, up +28% over the second quarter of 2023.
“The twelve-month rolling average of orders in the second quarter was up +11% organically. Backlog at the end of June remained at record levels, up +29% organically over June 2023.”
Legrand
The company reported growth in the low single-digit range for the quarter, but is very bullish about growth in the data center market and the potential of several acquisitions in that area. Benoît Coquart, Legrand’s CEO, said, “In the United States (35.6% of Group revenue), sales rose +1% in the first six months of the year, including a steep +7.9% rise in the second quarter alone. This solid performance in the second quarter was driven by marked growth in the data center segment and an increase in non-residential applications.”
Rockwell Automation
Fiscal 2024 third quarter sales were $2,051 million, down -8.4%. Blake Moret, chairman and CEO, reported additional project delays this quarter on the demand side, with customers citing weaker consumer demand, high interest rates, and policy uncertainty around tax, tariffs and stimulus incentives as the main drivers for deferring their investment plans. Although Moret saw progress on inventory de-stocking at its distributors and machine builders in the most recent quarter, low-single-digit sequential growth in orders was lower than expected.
Atkore. In the electrical segment, net sales decreased by $99.7 million, or -14.1%, to $606 million for the three months ended June 28, 2024. Total company net sales decreased by $96.8 million or -10.5% to $822.4 million for the three months ended June 28, 2024. Bill Waltz, Atkore president and CEO, said, “The third quarter proved to be more challenging than we initially anticipated due to a limited increase in demand from the summer construction season and an overall soft pricing environment across most of our Electrical Business. We anticipate these trends to continue into the fourth quarter and next year, and we’ve updated our expectations and outlooks accordingly.”
Wesco. The company’s 2Q 2024 revenues were below the executive team’s expectations, according to said John Engel, chairman, president and CEO. “Our second quarter results were somewhat below our expectations for a low single-digit decline in reported sales against a continued mixed and multi-speed economic environment,” said Engel in the press release. “Results improved as we moved through the quarter with a return to organic sales growth in June along with sequential margin expansion. We continued to benefit from the increase in AI-driven data center growth, with sales in our Wesco Data Center Solutions business up double-digits. This was more than offset by a significant slowdown in purchases by our utility customers.
“While we remain confident in the long-term growth of our Utility and Broadband Solutions business, the customer destocking and delay of capital projects clearly impacted our results in the quarter.”
“We expect the mixed economic environment and customer purchasing delays in utility and broadband to continue through the second half of 2024. Quoting, bid activity levels and our backlog remain healthy, supporting our view for sales growth in the second half against an easier year-over-year comparable, but at a more modest rate than our previous outlook. As a result, we are reducing our full-year outlook and now expect organic sales growth of -1.5% to 0.5% versus prior year.”
Quanta Services
Revenues in the second quarter of 2024 were $5.6 billion compared to revenues of $5.1 billion in 2Q 2023. Duke Austin, president and CEO, said the company’s first half of the year is a good start, with second quarter results reflecting another quarter of double-digit growth in revenue.
Austin said the continued demand for Quanta’s services is driven by its customers’ multi-year programs to build the renewable generation and power grid infrastructure necessary to support North America’s energy transition, load growth, security and reliability, and he was excited about the additional customers services that will be part of the Cupertino Electric acquisition.
Emcor
The company is increasing its full-year 2024 revenue guidance range to $14.5 billion to $15 billion, from the prior guidance range of $14 billion to $14.5 billion.
Anthony Guzzi, the company’s chairman, president, said EMCOR’s Electrical Construction segment posted record revenues, with growth of +18% on both a quarterly and year-to-date basis and achieved a record second quarter operating margin, earning over 11% in both the quarter and year-to-date periods.