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Electricalmarketing 3008 Substation Gettyimages 186277789 1024
Electricalmarketing 3008 Substation Gettyimages 186277789 1024
Electricalmarketing 3008 Substation Gettyimages 186277789 1024
Electricalmarketing 3008 Substation Gettyimages 186277789 1024
Electricalmarketing 3008 Substation Gettyimages 186277789 1024

Execs Charged Up Over 2Q Results

Aug. 3, 2018
You get the sense that business conditions are pretty good right now and should remain solid for the rest of the year and into 2019.

If you read the tea leaves sprinkled throughout the comments of senior executives of publicly held electrical companies, you get the sense that business conditions are pretty good right now and should remain solid for the rest of the year and into 2019. Below are comments from executives from Eaton, Encore Wire, Generac, Grainger, Hubbell, Signify (Philips Lighting) and Schneider Electric. 

Eaton Corp. exec sees growth Electrical Systems and Services segment.  “Orders in the second quarter were up 15% over the second quarter of 2017, led by strong growth in the Americas and Asia Pacific,” said Craig Arnold, chairman & CEO. “We saw particular strength in large industrial projects and data centers. With the strong orders we have booked over the last nine months, we expect continued sales strength in the second half of the year.”

Business looking solid at Encore Wire, even with all the craziness in copper pricing. “The U.S. economy appears strong, as is construction activity,” said Daniel Jones, chairman, president & CEO. “Based on discussions with our distributor customers and their contractor customers, we believe there is a good outlook for construction projects for the next year.”

Jones also said that while the company’s top-line sales results increased significantly (due in large part to the double-digit year-over-year increase in copper prices), Encore Wire also enjoyed increases in terms of copper pounds shipped, a popular indicator of sales activity in the wire and cable industry. “Net sales dollars increased significantly, in both the quarterly and six-month comparisons of 2018 to 2017,” said Jones. “The increased top line was driven primarily by higher copper raw material prices. Unit volumes bounced back strongly in the second quarter of 2018 versus the first quarter of 2018, rising 16.5% in copper pounds shipped.”

Happy days are here again at Generac. The press release announcing the company’s 2Q 2018 results said, “As a result of the continued strong demand for both residential and commercial & industrial (C&I) products, together with the closing of the Selmec acquisition, the company is increasing its full-year 2018 sales growth guidance to approximately 13% to 14% with adjusted EBITDA margins of approximately 20%.”

Said Aaron Jagdfeld, Generac’s president and CEO, “We continue to see robust demand across all of our end markets and geographies, with particular strength coming from residential products as power outages over the last twelve months have been well above the long-term average.

“Global interest for our Commercial & Industrial mobile and stationary products has also been strong primarily driven by an increase in telecom, healthcare and other large projects, as well as the continued investment in fleet equipment by our rental account customers.  Lastly, on June 1, we closed on the acquisition of Selmec, further expanding our presence in the important Latin American backup power market.”

Multiple markets power Hubbell’s 2Q growth. “Second quarter results benefited from strong markets, higher price realization, our focus on cash flow, and the integration of Aclara,” said David Nord, chairman, president and CEO. “We delivered 5% organic sales growth in the quarter, with continued growth across all major market segments. Oil and gas, as well as both light and heavy Industrial, were notably strong.

“The Electrical Transmission & Distribution market was also a standout, driven by transmission projects and system hardening initiatives. Our Power segment also benefited from build-outs in the outside plant telecommunications market. Lighting markets were mixed, with strength in residential and flat unit volumes and continued price pressure in Commercial & Industrial.”

Signify (Philips Lighting) sees some disappointing results. “In the second quarter, profitability improved in Lamps, LED and Professional while the performance in Home remained weak. We significantly reduced our cost base and working capital, thereby structurally improving our cash generation,” said Eric Rondolat, chief executive officer. “However, given the slow start to the year and as we expect ongoing challenging market conditions, we have decided to revise our sales outlook for the year. We expect our sales growth performance to improve in the second half, but this will not be enough to deliver positive comparable sales growth for the full year.”

Grainger comes back strong in 2Q 2018. “The second quarter exceeded our expectations, with strong growth from U.S. large and medium customers, gross profit that was better than anticipated and meaningful operating expense leverage,” said DG Macpherson, chairman and CEO. “We continue to gain share across both large and medium customers and acquire medium customers amid a strong economy.

“In Canada, we are on schedule with the business turnaround. And the single channel and international businesses also improved operating performance. Based on our performance and momentum, we are raising our sales and earnings per share guidance for the year.”

Schneider Electric sees data center business growing at a double-digit clip. Jean-Pascal Tricoire, Schneider Electric’s chairman and CEO, said in a conference call on the company’s second quarter 2018 results that data centers and secure power projects such as micro-grids served by its medium-voltage business unit were  two of the fastest-growing end user market segments. “Data centers are growing big double digit, on the back of what we do in secured power. So, what we want to do here is to keep growing ourselves through partners, our distributors, our specifiers, our contractors across the world who are strong partners of Schneider.”