Hubbell told investors on its Oct. 27 earnings call that sales to data centers climbed by more than 80% in the third quarter from a year earlier, ahead of what the company had expected for the full year. Data centers now make up 15% of the Electrical Solutions segment’s sales. Chief executive Gerben Bakker also said Hubbell will start its 2027 price increases early, in November.
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The numbers explain the confidence. Third-quarter net sales rose 25% to $1,872.5 million, and the company lifted its full-year adjusted earnings guidance to $20.40 to $20.60 a share, mostly on stronger Electrical Solutions growth.
Electrical Solutions: 22% organic growth plus the NSI deal
Utility Dive’s Emma Penrod reported in her account of the call that Electrical Solutions organic sales rose 22%, and that the 2025 acquisition of NSI Industries added another 29% on top, according to the earnings slides. The company’s earnings release filed with the SEC puts segment net sales up 51% at $845 million, with adjusted operating margin of 24.8% against 20.8% a year earlier. Management attributed organic growth of more than 20% to strong datacenter markets, helped by content gains and added capacity. By that arithmetic, 15% of $845 million is about $127 million of data center sales in the quarter, though neither source states the dollar figure. Light industrial and other nonresidential demand stayed firm too. The more-than-80% figure applies to data center customers alone, and the coverage does not break out a dollar amount for them.
Across the whole company, the 25% sales gain split into 11 points of organic growth and 13 points from acquisitions. Hubbell also guided to an adjusted tax rate of 22.0% to 22.5%, about $20 million of restructuring and related investment, and free cash flow conversion near 90% of adjusted net income.
Adjusted diluted earnings per share were $5.91, up 14% from a year earlier, against $4.94 on a GAAP basis, and adjusted operating margin reached 25.5%, up 160 basis points. For all of 2026 the company now expects total sales growth of 18% to 19%, including 10% to 11% organic, and GAAP earnings of $17.30 to $17.50 a share. Bakker said orders and end-market demand stayed strong and kept building backlog in the quarter, which is the main reason management felt comfortable raising the outlook.
Capacity spending doubles to $50 million a quarter
Chief financial officer Joe Capozzoli said Hubbell is investing about $25 million per quarter in manufacturing capacity and plans to double that to $50 million per quarter in 2027, roughly $200 million for the year. Most of the new capacity is aimed at transmission, substation and data center markets. Bakker put the logic in physical terms: a company can only keep adding machines to existing buildings for so long before it runs out of room under the roof.
Doubling the spend implies management expects demand to outrun the current footprint for several years. The earnings release’s own forward-looking section lists continued datacenter strength as a risk, citing certain opposition. The quarterly 10-Q filing carries the full set of risk language.
Utility Solutions: $1.03 billion and a metering shortage
Utility Solutions reported net sales of $1.03 billion, up 8.9%, with organic growth of 5%. Grid automation fell about 4%, which Utility Dive links to slower sales of substation control houses and a temporary shortage of metering equipment. Bakker said a contract manufacturer could not source a key component from a supplier and that he expects the problem to be resolved by year-end. He described utility transmission and distribution markets as being in the early stages of an attractive multiyear investment cycle.
The two reports of the segment do not line up perfectly. Utility Dive says grid infrastructure rose 8%, while the earnings release says about 13%, and the release gives Utility Solutions an adjusted operating margin of 26.0% against 25.7% a year earlier. Both agree that grid automation slipped by roughly 4%.
Price realization and the November increases
Both segments cited favorable price realization as a driver of operating results in the earnings release, alongside volume, acquisitions, productivity and a net tariff benefit, with cost inflation and raw material costs offsetting part of the gain. Against that backdrop Hubbell plans to raise prices for 2027 starting in November, to offset cost inflation and protect margins. The call coverage gives no percentage for the increases.
Peers are reporting the same pull. Utility Dive’s reports on Schneider Electric’s record third-quarter revenue and on ABB’s 82% rise in U.S. orders describe demand running well above normal, and the earnings slides Hubbell posted are where the segment figures originate. Adjusted operating margin already rose 160 basis points to 25.5% in the quarter, so the November increases arrive while margins are expanding, not squeezed. What remains unanswered is how much of the 80% data center jump comes from volume and how much from the pricing already in the books.
This article was produced with the assistance of AI and reviewed by Morning Overview editors prior to publication.
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